Inspire Medical Systems Inc (INSP)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Inventory turnover | 8.23 | 16.27 | 32.70 | 13.76 | 17.25 |
| Receivables turnover | 8.63 | 6.95 | 6.63 | 6.77 | 4.52 |
| Payables turnover | 17.04 | 14.20 | 14.48 | 20.33 | 20.29 |
| Working capital turnover | 1.48 | 1.21 | 0.87 | 1.02 | 0.46 |
Inspire Medical Systems Inc's inventory turnover ratio indicates the number of times the company's inventory is sold and replaced within a given period. The trend shows a decrease from 17.25 in 2020 to 8.23 in 2024, implying a decline in the efficiency of managing inventory.
The receivables turnover ratio measures how efficiently the company collects outstanding receivables. Inspire Medical Systems' ratio has been steadily improving from 4.52 in 2020 to 8.63 in 2024, suggesting the company is collecting receivables more rapidly over the years.
The payables turnover ratio reflects how quickly the company pays its suppliers. The trend for Inspire Medical Systems shows fluctuations but remains relatively stable, hovering around 20.0 in 2020 and 17.0 in 2024, indicating consistent payment practices.
The working capital turnover ratio measures how effectively the company utilizes its working capital to generate revenue. Inspire Medical Systems Inc's ratio has been increasing over the years, indicating a more efficient utilization of working capital to generate sales, with a ratio of 1.48 in 2024.
In summary, while there are some fluctuations in activity ratios, Inspire Medical Systems Inc has shown improvements in the management of receivables and working capital turnover, suggesting enhanced operational efficiency in these areas. However, the decline in inventory turnover may require attention to optimize inventory management strategies.
Average number of days
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 44.36 | 22.43 | 11.16 | 26.53 | 21.15 |
| Days of sales outstanding (DSO) | days | 42.31 | 52.51 | 55.02 | 53.94 | 80.70 |
| Number of days of payables | days | 21.42 | 25.71 | 25.21 | 17.96 | 17.99 |
Based on the provided data for Inspire Medical Systems Inc, we can analyze the company's activity ratios, specifically 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):
- As of December 31, 2020, the company had 21.15 days worth of inventory on hand.
- The DOH increased to 26.53 days by December 31, 2021, indicating a potential build-up in inventory.
- Interestingly, by December 31, 2022, the DOH significantly dropped to 11.16 days, which may suggest efficient management of inventory levels.
- However, the DOH increased again to 22.43 days by December 31, 2023, and further rose to 44.36 days by December 31, 2024, possibly indicating inventory management challenges and potential inefficiencies.
2. Days of Sales Outstanding (DSO):
- On December 31, 2020, the company had a DSO of 80.70 days, suggesting a relatively long period for collecting receivables.
- The DSO improved to 53.94 days by December 31, 2021, indicating the company's ability to collect receivables more efficiently.
- Subsequently, the DSO remained relatively stable around 55 days for 2022 and 2023 before decreasing to 42.31 days by December 31, 2024, signaling a further improvement in collecting receivables.
3. Number of Days of Payables:
- The company had 17.99 days of payables outstanding on December 31, 2020, which is a relatively short period, indicating efficient payment practices.
- The number of days of payables remained consistent at around 17-18 days for 2021 and 2022.
- By December 31, 2023, the days of payables increased to 25.71 days, suggesting the company may have started taking longer to pay its outstanding obligations.
- However, by December 31, 2024, the days of payables decreased to 21.42 days, indicating a potential reversal of the previous trend towards longer payment periods.
Overall, analyzing these activity ratios provides insights into how effectively Inspire Medical Systems Inc manages its inventory, collects its receivables, and pays its obligations, which are crucial factors in assessing the company's operational efficiency and working capital management.
Long-term
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Fixed asset turnover | 11.16 | 15.63 | 23.55 | 27.25 | 21.35 |
| Total asset turnover | 0.99 | 0.92 | 0.72 | 0.78 | 0.40 |
Long-term activity ratios provide insights into how efficiently a company is utilizing its assets to generate revenue.
1. Fixed Asset Turnover:
- The fixed asset turnover ratio for Inspire Medical Systems Inc has fluctuated over the years. It increased from 21.35 in 2020 to 27.25 in 2021, indicating that the company generated $27.25 in sales for every dollar invested in fixed assets in 2021.
- However, the ratio declined to 23.55 in 2022, 15.63 in 2023, and further to 11.16 in 2024. The decreasing trend suggests that the company's efficiency in utilizing fixed assets to generate revenue has declined significantly over the years.
2. Total Asset Turnover:
- The total asset turnover ratio for Inspire Medical Systems Inc has shown an improving trend from 0.40 in 2020 to 0.99 in 2024. This indicates that the company has become more efficient in generating sales with its total assets over the years.
- The increase in this ratio signifies that the company is generating more revenue per dollar of total assets employed, reflecting improved efficiency in asset utilization.
Overall, while the total asset turnover ratio has improved steadily, the fixed asset turnover ratio has shown a declining trend. This indicates that Inspire Medical Systems Inc may need to review its fixed asset management and utilization strategies to enhance efficiency and profitability.