Incyte Corporation (INCY)

Short-term

Turnover ratios

Activity ratios provide valuable insights into how efficiently a company is managing its assets and liabilities. Let's analyze the activity ratios of Incyte Corp. based on the provided data.

1. Inventory Turnover:
Incyte Corp.'s inventory turnover has fluctuated over the past eight quarters, ranging from 3.25 to 6.65. A higher inventory turnover ratio indicates that the company is efficiently managing its inventory levels and selling its products quickly. The recent quarter's inventory turnover of 4.05 suggests that the company is turning over its inventory approximately four times during the period, which is relatively stable compared to previous quarters.

2. Receivables Turnover:
The receivables turnover ratio measures how quickly a company collects its accounts receivable. Incyte Corp.'s receivables turnover has remained relatively consistent, ranging from 4.86 to 5.56 over the past eight quarters. The recent quarter's turnover of 4.97 implies that the company collects its receivables approximately five times during the period.

3. Payables Turnover:
The payables turnover ratio reflects how quickly a company is paying its suppliers or vendors. Incyte Corp.'s payables turnover has varied significantly, with a low of 0.75 and a high of 3.98 over the past eight quarters. A higher payables turnover ratio suggests that the company is paying its suppliers more quickly. The recent quarter's payables turnover of 2.33 indicates that the company is paying its payables approximately 2.33 times during the period, showing a reasonable payment efficiency.

4. Working Capital Turnover:
The working capital turnover ratio measures how effectively a company is utilizing its working capital to generate revenue. Incyte Corp.'s working capital turnover has shown a slight decreasing trend over the past eight quarters, from 1.30 to 1.09. The recent quarter's turnover of 1.09 suggests that the company is generating revenue slightly less efficiently using its working capital compared to previous quarters.

In conclusion, Incyte Corp. has shown varying levels of efficiency in managing its inventory, receivables, payables, and working capital over the past eight quarters. Monitoring these activity ratios can help investors and stakeholders assess the company's operational performance and financial health.

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Average number of days

To analyze Incyte Corp.'s activity ratios, we will focus on the Days of Inventory on Hand (DOH), Days of Sales Outstanding (DSO), and Number of Days of Payables.

1. Days of Inventory on Hand (DOH):
- The trend in DOH shows a fluctuating pattern over the past eight quarters, ranging from 54.91 days to 112.40 days.
- In the latest quarter (Q4 2023), the company had 90.14 days of inventory on hand, indicating a moderate level compared to previous quarters.
- A higher DOH suggests slower inventory turnover, which may lead to increased holding costs and the risk of obsolescence.

2. Days of Sales Outstanding (DSO):
- DSO fluctuated between 65.61 days and 75.07 days over the last eight quarters.
- In Q4 2023, DSO was 73.44 days, indicating that it took the company approximately 73 days to collect its receivables on average.
- A higher DSO suggests slower collection of receivables, which may impact the company's cash flow and liquidity.

3. Number of Days of Payables:
- The trend in the number of days of payables also shows significant variability, ranging from 91.80 days to 489.40 days.
- In Q4 2023, the company had 156.89 days of payables, indicating the time it takes to settle its payables on average.
- A higher number of days of payables may indicate that the company is taking longer to pay its suppliers, which could affect relationships or signal financial distress.

Overall, analyzing these activity ratios provides insights into Incyte Corp.'s inventory management, receivables collection efficiency, and payment practices. It is essential for the company to manage these ratios effectively to optimize working capital, cash flow, and operational efficiency.

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Long-term

Incyte Corp.'s fixed asset turnover ratio has been relatively stable over the past eight quarters, ranging between 4.43 and 4.92. This indicates that the company generates approximately $4.43 to $4.92 in revenue for every dollar invested in fixed assets.

On the other hand, the total asset turnover ratio has shown a declining trend, decreasing from 0.62 in Q1 2022 to 0.54 in Q4 2023. This suggests that the company's ability to generate sales from its total assets has weakened over time, falling from $0.62 to $0.54 in revenue generated per dollar of total assets.

Overall, while Incyte Corp. has been effectively utilizing its fixed assets to generate revenue consistently, its total asset turnover has been gradually declining, which may indicate inefficiencies in utilizing its total asset base to generate sales. Further analysis and comparison with industry peers are recommended to better understand the company's performance in this regard.