IAC Inc. (IAC)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|
| Inventory turnover | — | — | 118.69 | 2,570.13 |
| Receivables turnover | 8.13 | 8.61 | 5.34 | 10.22 |
| Payables turnover | 41.89 | 41.81 | 17.94 | 8.84 |
| Working capital turnover | 3.38 | 3.53 | 2.18 | 0.82 |
Activity ratios provide insight into how efficiently a company is managing its resources. Let's analyze IAC Inc.'s activity ratios based on the provided data:
1. Inventory turnover:
Inventory turnover indicates how many times a company sells and replaces its inventory during a period. IAC Inc. does not have data for inventory turnover for 2023 and 2022. However, there was a significant decrease in inventory turnover from 2021 to 2020, which may indicate either an increase in the average inventory level or a slowdown in sales velocity.
2. Receivables turnover:
Receivables turnover measures how efficiently a company collects on its credit sales. A higher ratio indicates that the company is collecting its receivables more quickly. The trend for IAC Inc. shows a slight decrease in receivables turnover from 2022 to 2023. However, the turnover remains relatively stable over the period, suggesting consistent collection efficiency.
3. Payables turnover:
Payables turnover reflects how quickly a company pays its suppliers. An increasing trend in payables turnover can indicate that the company is taking longer to pay its suppliers. IAC Inc. experienced an increasing trend in payables turnover from 2020 to 2023, signaling a possible extension in payment terms with suppliers.
4. Working capital turnover:
Working capital turnover measures the efficiency of a company in generating sales revenue based on its working capital. A higher turnover ratio indicates better utilization of working capital. IAC Inc.'s working capital turnover has been increasing steadily from 2020 to 2023, indicating improved efficiency in converting working capital into sales.
Overall, the analysis of IAC Inc.'s activity ratios suggests that the company has been managing its inventory, receivables, payables, and working capital efficiently. The trends in these ratios provide valuable insights into the company's operational performance and its ability to optimize resources effectively.
Average number of days
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | — | — | 3.08 | 0.14 |
| Days of sales outstanding (DSO) | days | 44.87 | 42.38 | 68.39 | 35.71 |
| Number of days of payables | days | 8.71 | 8.73 | 20.35 | 41.29 |
Based on the activity ratios provided for IAC Inc., we observe the following trends:
1. Days of Inventory on Hand (DOH):
- In 2021, the company held inventory for approximately 3.08 days, indicating a relatively efficient management of inventory.
- However, in 2020, the DOH dropped significantly to 0.14 days, suggesting a substantial improvement in inventory turnover efficiency, potentially due to better inventory management practices.
2. Days of Sales Outstanding (DSO):
- The DSO reflects the average number of days it takes for the company to collect payments from its customers.
- In 2023, the DSO increased to 44.87 days from 42.38 days in 2022, indicating a slight slowdown in collecting receivables.
- The DSO significantly decreased in 2020 to 35.71 days before increasing in the subsequent years, which could indicate a shift in the company's credit policies or changes in customer payment behaviors.
3. Number of Days of Payables:
- The days of payables metric represents the average number of days the company takes to pay its suppliers.
- The company consistently managed its payables efficiently, with a relatively low number of days to settle payables over the years.
- Notably, there was a significant decrease in the number of days of payables from 2020 to 2021, suggesting a potential shift towards quicker payment cycles.
Overall, the activities ratios suggest that IAC Inc. has been relatively effective in managing its inventory, but there have been fluctuations in the collection of receivables and payment of payables over the years. These trends may indicate changes in the company's working capital management strategies and operational efficiency.
Long-term
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|
| Fixed asset turnover | 9.59 | 10.25 | 6.48 | 10.06 |
| Total asset turnover | 0.42 | 0.50 | 0.30 | 0.30 |
The fixed asset turnover ratio for IAC Inc. has been fluctuating over the past four years, ranging from a low of 6.48 in 2021 to a high of 10.25 in 2022. This ratio measures how efficiently the company is generating revenue from its investment in fixed assets, such as property, plant, and equipment. A higher fixed asset turnover ratio indicates that the company is effectively utilizing its fixed assets to generate sales.
On the other hand, the total asset turnover ratio for IAC Inc. has remained relatively low and stable around 0.30 over the same period. This ratio evaluates how well the company is utilizing all its assets to generate sales. A total asset turnover ratio of less than 1 suggests that the company is not efficiently leveraging its assets to generate revenue.
Overall, while IAC Inc. has shown fluctuations in its fixed asset turnover ratio, indicating varying levels of efficiency in utilizing its fixed assets to generate revenue, the company's total asset turnover ratio has remained consistently low, signaling potential inefficiencies in leveraging its total assets for sales generation. Management should focus on improving asset utilization efficiency to enhance overall business performance.