Intuit Inc (INTU)

Short-term

Turnover ratios

Intuit Inc.’s activity ratios over the analyzed period reveal significant insights into its operational efficiency and asset management practices.

Inventory Turnover:
The company historically exhibits minimal or no meaningful inventory turnover data from October 2020 through October 2022, suggesting that inventory holdings are either negligible or not material to the company's operations during this period. Starting from January 2023, there is a notable increase in inventory turnover, reaching approximately 7.64 in January 2023 and maintaining around 7.48 to 7.81 through July 2023. However, a sharp decline occurs by October 2023, with the ratio dropping to approximately 1.28, and further decreasing to 0.98 by January 2024. This dramatic reduction indicates a potential change in inventory management, a reduction in inventory levels, or a shift in business operations that may have impacted inventory holdings or reporting.

Receivables Turnover:
Receivables turnover ratios fluctuate considerably over the period. Initially, there is a high ratio of 61.23 in October 2020, indicating rapid collection of receivables at that time. However, this number declines sharply to 12.49 in January 2021, then fluctuates between approximately 7.13 and 19.76 throughout 2021 and 2022. A notable decrease occurs again by January 2024, with a ratio of 7.35, indicating a slowdown in receivable collections. Conversely, during mid-2023, the ratio improves, reaching 14.09 in October 2023, suggestive of improved receivables management. The variations may reflect changes in credit policies, customer base, or collection efficiency.

Payables Turnover:
The payables turnover demonstrates moderate fluctuation, with initial ratios around 5.25 in October 2020 declining to approximately 2.31 by January 2022. Post-2022, the ratio generally trends upwards, reaching around 5.12 in October 2023, indicative of more frequent payments to suppliers or creditors. The reversal suggests improved payment practices or changes in payment terms, aligning with operational cycles or liquidity management strategies.

Working Capital Turnover:
This ratio exhibits substantial variability, with low values in the earlier part of the period, such as 1.74 in October 2020 and 1.74 in October 2020, and spiking to 21.87 in January 2022. The high peaks in early 2022 suggest an aggressive utilization of working capital or efficient asset deployment during that time. Throughout 2022 and 2023, the ratio generally remains elevated, indicating efficient use of working capital. After October 2023, the ratios decline gradually, reaching around 4.22 in April 2025, which may reflect a more conservative working capital policy or shifts in operational scale.

Summary:
Overall, Intuit Inc.’s activity ratios portray a company that experienced periods of operational efficiency, especially in receivables management and working capital utilization, notably around 2022 and 2023. The sharp decline in inventory turnover at the beginning of 2024 suggests a strategic reduction or liquidation of inventory, potentially due to shifting business models or inventory practices. Fluctuations in receivables and payables ratios imply ongoing adjustments in credit and payment policies, possibly influenced by broader economic factors or internal strategic decisions. The variations across these ratios highlight the dynamic nature of Intuit’s operational practices and resource management during the analyzed timeframe.

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Average number of days

The activity ratios presented for Intuit Inc. over various periods reflect insights into the company’s operational efficiency, specifically regarding inventory management, receivables collection, and payables management.

Days of Inventory on Hand (DOH):
Data for DOH is largely unavailable until the latest periods, where significant increases are observed. As of October 31, 2023, DOH measures approximately 285.60 days, escalating sharply to 373.93 days by January 31, 2024. This dramatic rise indicates a substantial accumulation of inventory relative to sales, suggesting potential inefficiencies or disruptions in inventory turnover. The absence of earlier data limits trend analysis, but the recent spike may reflect strategic changes, operational shifts, or challenges in inventory liquidation.

Days of Sales Outstanding (DSO):
The DSO figures reveal variability across the periods. Earlier data shows a relatively short collection period, with a low of 5.96 days on October 31, 2020, and modest fluctuations thereafter. Notably, DSO increased significantly starting January 31, 2021, reaching 51.16 days by January 31, 2023, with an occasional reduction such as 25.91 days on October 31, 2023. However, a stark anomaly occurs in the early 2025 periods, with DSO soaring to 123.68 days in January 2025 and further to 145.16 days in April 2025, indicating prolonged collection cycles and potential receivables management challenges. The recent reduction to around 38.44 days in July 2025 signifies some normalization but remains elevated compared to earlier years.

Number of Days of Payables:
This ratio exhibits considerable fluctuation over time. The earliest measurement on October 31, 2020, indicates an average of 69.52 days payable, which peaked at 157.83 days in January 2022. An evident decreasing trend follows, reaching approximately 65.24 days by October 31, 2024. The shorter payables period in recent periods suggests an effort to accelerate payments to suppliers or improved cash management, though some variability persists. As of January 2025, the payables period slightly increases again to 101.57 days.

Overall Trends and Implications:
The recent data reveals a pattern of extended inventory holding periods and deteriorated receivables collection times, especially the significant jump in DSO in early 2025. These shifts could indicate operational strain, changes in credit or sales policies, or strategic inventory accumulation. The reduction in payables days signals a possible effort to optimize working capital or respond to supplier negotiations.

In summary, the activity ratios suggest that while earlier periods demonstrated efficient receivables collection and manageable inventory levels, recent periods exhibit signs of operational challenges, notably in inventory management and accounts receivable turnover. These trends warrant further investigation into underlying causes and potential impacts on the company’s liquidity and overall operational health.

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See also:

Intuit Inc Short-term (Operating) Activity Ratios (Quarterly Data)

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Long-term

The analysis of Intuit Inc.’s long-term activity ratios based on the provided data reveals insights into the company's asset utilization efficiency over the observed periods.

Starting with the Fixed Asset Turnover ratio, which measures how efficiently fixed assets generate sales, the data indicates fluctuations throughout the periods. The ratio began at 10.55 on October 31, 2020, experienced a decline to 9.74 by January 31, 2021, followed by a slight rebound to 11.24 on April 30, 2021. A subsequent decrease was observed in July 2021 to 8.30, with marginal increases thereafter, reaching 8.64 in October 2021, and gradually improving to 8.99 by January 2022. A notable increase occurred on April 30, 2022, reaching 15.00, indicating higher asset efficiency during that period, which sustained in subsequent quarters close to that level, with 14.83 on July 31, 2023. The ratio data is unavailable beyond October 2023.

This pattern suggests periods of asset utilization optimization, particularly around April 2022, possibly reflecting strategic investments or operational efficiencies.

Regarding the Total Asset Turnover ratio, which assesses the overall efficiency of asset use to generate sales, the figures present a different trend. The ratio started at 0.81 on October 31, 2020, but then declined to 0.53 by January 31, 2021, and showed slight increases through the opening months of 2021, ultimately rising to a peak of 0.69 on October 31, 2021. Thereafter, the ratio generally stabilized at lower levels, fluctuating between approximately 0.43 and 0.52, indicating relatively consistent but modest asset efficiency. Notably, the ratio shows a gradual upward trend reaching 0.54 in January 2025, reflecting a slight improvement in overall asset utilization over the period.

In sum, Intuit's fixed asset turnover shows considerable variability, with notable peaks around April 2022, potentially indicating periods of operational realignment or asset optimization. The total asset turnover ratio, while more stable, suggests a steady, modest efficiency in using total assets to generate revenue, with a slight positive trend toward the later periods. These ratios collectively portray a company that has experienced fluctuations in asset utilization efficiency but is maintaining a generally consistent level of overall asset productivity over time.

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See also:

Intuit Inc Long-term (Investment) Activity Ratios (Quarterly Data)