Iridium Communications Inc (IRDM)

Short-term

Turnover ratios

Activity ratios provide insight into how effectively a company manages its assets and liabilities to generate sales. Let's analyze the activity ratios of Iridium Communications Inc based on the provided data:

1. Inventory Turnover: This ratio indicates how efficiently the company manages its inventory. Iridium Communications Inc's inventory turnover has been fluctuating over the past eight quarters, ranging from a low of 2.47 to a high of 6.10. The trend shows an overall improvement in inventory management over time.

2. Receivables Turnover: This ratio reflects how quickly the company collects its accounts receivable. Iridium Communications Inc's receivables turnover has been relatively steady, with fluctuations between 7.53 and 8.82 over the same period. The company maintains a consistent collection process for its receivables.

3. Payables Turnover: This ratio measures how efficiently the company pays its suppliers. Iridium Communications Inc's payables turnover has shown significant variability, with a wide range from 6.38 to 15.68. Higher payables turnover ratios indicate a quicker payment cycle, while lower ratios suggest delayed payments to suppliers.

4. Working Capital Turnover: This ratio evaluates the efficiency of the company in utilizing its working capital to generate sales. Iridium Communications Inc's working capital turnover has generally improved over the quarters, indicating a more effective use of working capital to support its operations and generate revenue.

In conclusion, Iridium Communications Inc shows mixed performance in its activity ratios, with improvements in inventory and working capital turnover, while payables turnover has been more erratic. The company's consistent receivables turnover indicates stable collection practices. Each ratio provides valuable insights into the company's operational efficiency and management of its assets and liabilities.

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Average number of days

Days of Inventory on Hand (DOH) for Iridium Communications Inc have shown a fluctuating trend over the quarters, ranging from 147.76 days in Q4 2023 to 61.86 days in Q1 2023. This indicates that the company has been managing its inventory levels differently each quarter, possibly due to changes in demand or supply chain efficiency.

Days of Sales Outstanding (DSO) have also varied, with the highest DSO of 48.45 days in Q1 2023 and the lowest of 41.41 days in Q2 2022. This metric reflects the average number of days it takes for the company to collect its accounts receivable, and a lower DSO is generally more favorable as it indicates quicker cash conversion.

The Number of Days of Payables has shown a similar fluctuating pattern, with Q3 2023 having the lowest value of 23.27 days and Q2 2022 having the highest at 57.19 days. A lower number of days of payables suggests that the company is taking longer to pay its suppliers, which could be indicative of strained liquidity or a deliberate strategy to manage cash flow.

Overall, it seems that Iridium Communications Inc has been actively managing its working capital components, albeit with varying degrees of success each quarter. Further analysis would be beneficial to understand the underlying reasons for these fluctuations and to assess the efficiency of the company's working capital management strategies.

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Long-term

The fixed asset turnover ratio for Iridium Communications Inc has been relatively stable over the past eight quarters, ranging between 0.25 and 0.36. This ratio indicates that the company generated approximately $0.25 to $0.36 in net sales for every dollar invested in fixed assets during the period. A higher fixed asset turnover ratio is generally preferred as it suggests that the company is effectively utilizing its long-term assets to generate revenues.

On the other hand, the total asset turnover ratio has also shown consistency over the same period, fluctuating between 0.21 and 0.30. This ratio reflects the company's ability to generate sales in relation to its total assets. A total asset turnover ratio of 0.21 to 0.30 implies that Iridium Communications Inc generated around $0.21 to $0.30 in sales for every dollar of total assets it possesses.

Overall, both the fixed asset turnover and total asset turnover ratios demonstrate that Iridium Communications Inc has been efficient in utilizing its assets to generate revenues. However, it is important for the company to continue monitoring and managing these ratios to ensure sustained operational efficiency and profitability in the long term.