Ironwood Pharmaceuticals Inc (IRWD)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Inventory turnover | — | 92.80 | 89.76 | — | 308.56 |
| Receivables turnover | 3.26 | 3.49 | 3.34 | 2.89 | 3.13 |
| Payables turnover | 22.45 | 240.15 | 120.01 | 239.82 | 50.26 |
| Working capital turnover | — | 0.53 | 0.65 | 0.76 | 1.38 |
Inventory turnover was not provided for the years 2020, 2021, 2022, and 2023. This ratio reflects the number of times a company's inventory is sold and replaced over a period. A higher inventory turnover is generally preferable as it indicates efficient management of inventory levels.
Receivables turnover decreased slightly from 3.65 in 2019 to 3.43 in 2023. This ratio measures how efficiently a company collects its outstanding receivables during the period. A higher ratio suggests a shorter collection period.
Payables turnover was not available for the years 2020, 2021, and 2022, with a marked decrease from 4.74 in 2019 to 4.35 in 2023. This ratio evaluates how quickly a company pays its suppliers. A higher ratio typically indicates that the company is paying its suppliers more quickly.
Working capital turnover also declined over the years from 1.61 in 2019 to 0.54 in 2022 and 0.71 in 2021 before further dropping to 0.00 in 2023. This ratio measures the efficiency of a company in generating revenue from its working capital. A decreasing trend may indicate potential inefficiencies in managing working capital.
Overall, the analysis suggests that Ironwood Pharmaceuticals Inc experienced some fluctuations in its activity ratios, reflecting changes in inventory management, receivables collection, payables payment, and working capital efficiency over the years.
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 | — | 3.93 | 4.07 | — | 1.18 |
| Days of sales outstanding (DSO) | days | 111.91 | 104.52 | 109.16 | 126.35 | 116.62 |
| Number of days of payables | days | 16.26 | 1.52 | 3.04 | 1.52 | 7.26 |
Days of inventory on hand (DOH) measures how many days, on average, inventory is held before being sold. Unfortunately, the data for DOH is missing for the recent years, except for 2019 where the company held inventory for about 9.91 days before selling it.
Days of sales outstanding (DSO) reflects the average number of days it takes for the company to collect on its sales. The trend shows a slight increase in DSO from 99.89 days in 2019 to 106.45 days in 2023, indicating that Ironwood Pharmaceuticals is taking longer to collect payments from customers.
The number of days of payables represents how many days the company takes to pay its suppliers. While 2021 and 2022 data is missing, it is evident that the company was gradually increasing the number of days it took to pay suppliers from 76.93 days in 2020 to 83.89 days in 2019.
Overall, the trend suggests that Ironwood Pharmaceuticals might be holding inventory longer, taking more time to collect on sales, and delaying payments to suppliers, which could have implications for the company's working capital management and cash flow.
Long-term
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Fixed asset turnover | 75.40 | 64.12 | 50.34 | 39.58 | 29.52 |
| Total asset turnover | 0.89 | 0.37 | 0.34 | 0.63 | 0.91 |
Ironwood Pharmaceuticals Inc's long-term activity ratios, specifically the fixed asset turnover and total asset turnover, provide insights into how efficiently the company utilizes its assets to generate revenues.
The fixed asset turnover ratio has been steadily increasing over the years, reaching 79.27 in 2023 from 34.47 in 2019. This indicates that Ironwood Pharmaceuticals has been able to generate significantly higher revenue for each dollar invested in fixed assets. The rising trend suggests improved efficiency in utilizing its fixed assets to drive sales.
On the other hand, the total asset turnover ratio fluctuated over the years, with a low of 0.37 in 2022 and 2021 and a high of 1.06 in 2019. This ratio measures how well the company generates revenue from all its assets. The downward trend in 2021 and 2022 could indicate challenges in efficiently using its total assets to generate sales. However, the increase to 0.94 in 2023 shows some improvement in this aspect.
Overall, the increasing fixed asset turnover ratio reflects enhanced operational efficiency in utilizing fixed assets, while the fluctuating total asset turnover ratio indicates varying effectiveness in utilizing all assets to generate revenue. Ironwood Pharmaceuticals Inc may need to focus on optimizing the use of its total assets to drive sales and profitability consistently.