Inspire Medical Systems Inc (INSP)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Inventory turnover | 16.27 | 32.70 | 13.76 | 17.25 | 2.34 |
| Receivables turnover | 6.95 | 6.63 | 6.77 | 4.52 | 6.25 |
| Payables turnover | 14.20 | 14.48 | 20.33 | 20.29 | 3.06 |
| Working capital turnover | 1.21 | 0.87 | 1.02 | 0.46 | 0.53 |
Inventory turnover measures how efficiently the company manages its inventory by showing how many times it sells and replaces its average inventory during a period. Inspire Medical Systems Inc's inventory turnover has shown variations over the years, with a significant increase in 2022 before declining in 2023. This could indicate changes in the company's inventory management practices or sales trends.
Receivables turnover ratio reveals how quickly the company collects its accounts receivable. Inspire Medical Systems Inc's receivables turnover has been relatively stable over the years, indicating a consistent approach to managing its outstanding receivables.
Payables turnover ratio reflects how quickly the company pays its suppliers. The trend for Inspire Medical Systems Inc's payables turnover shows a varying pattern, with a notable increase in 2021 before stabilizing in 2022 and 2023. This could suggest changes in the company's payment terms or its relationship with suppliers.
Working capital turnover measures how efficiently the company utilizes its working capital to generate sales. Inspire Medical Systems Inc's working capital turnover has shown an improving trend over the years, indicating the company's ability to generate more sales with the same amount of working capital. This could signify improved operational efficiency and financial management.
Overall, the analysis of Inspire Medical Systems Inc's activity ratios suggests varying trends in inventory management, accounts receivable collection, supplier payment practices, and working capital efficiency over the years. These ratios provide valuable insights into the company's operational performance and efficiency in managing its resources.
Average number of days
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 22.43 | 11.16 | 26.53 | 21.15 | 156.08 |
| Days of sales outstanding (DSO) | days | 52.51 | 55.02 | 53.94 | 80.70 | 58.41 |
| Number of days of payables | days | 25.71 | 25.21 | 17.96 | 17.99 | 119.29 |
Activity ratios provide insights into how efficiently a company manages its assets and liabilities to generate revenue. Let's analyze the activity ratios of Inspire Medical Systems Inc based on the provided data.
1. Days of Inventory on Hand (DOH):
- The trend of DOH shows fluctuations over the years, with a significant decrease from 2019 to 2020 followed by fluctuations.
- The company managed to reduce the days of inventory on hand by half from 2019 to 2020, which indicates better inventory management.
- However, the DOH increased in 2021 and decreased again in 2022, suggesting some variability in inventory management practices.
2. Days of Sales Outstanding (DSO):
- DSO shows fluctuation over the years, with a spike in 2020 followed by fluctuations in subsequent years.
- The increase in DSO from 2020 indicates longer collection periods, which may raise concerns about the company's credit policies or the quality of customers.
- The company managed to reduce DSO in 2023, which is a positive sign of improved accounts receivable management.
3. Number of Days of Payables:
- The trend of the number of days of payables shows a steady decrease over the years, indicating the company is taking longer to pay its suppliers.
- The decrease in payables days from 2019 to 2020 is significant, suggesting that the company may have been managing cash flow more effectively during that period.
- The number of days of payables has stabilized in recent years, indicating a consistent approach to managing payables.
Overall, while Inspire Medical Systems Inc has shown improvement in managing inventory and payables, there are opportunities for further optimization in managing sales outstanding to enhance operational efficiency and cash flow. Maintaining a balance between these activity ratios is crucial for ensuring the company's liquidity and profitability in the long run.
Long-term
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Fixed asset turnover | 15.63 | 23.55 | 27.25 | 21.35 | 26.95 |
| Total asset turnover | 0.92 | 0.72 | 0.78 | 0.40 | 0.45 |
Inspire Medical Systems Inc's long-term activity ratios paint a picture of how efficiently the company is utilizing its assets to generate sales over the past five years. The fixed asset turnover ratio has been fluctuating but generally showing a high level of efficiency in utilizing its fixed assets to generate sales. In particular, the ratios for 2021 and 2019 were notably high at 27.25 and 26.95, respectively.
On the other hand, the total asset turnover ratio indicates how effectively the company is using all of its assets to generate sales. The trend for this ratio has shown an improvement over the years, with a significant increase from 2019 to 2021. This improvement suggests that the company has been more efficient in generating sales relative to its total assets in recent years.
Overall, the fixed asset turnover ratios suggest that Inspire Medical Systems Inc has been effective in generating sales using its fixed assets, while the increasing trend in total asset turnover ratios indicates an improvement in the company's overall efficiency in utilizing all of its assets to generate sales over the years.