Intuitive Surgical Inc (ISRG)

Activity ratios

Short-term

Turnover ratios

	Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Inventory turnover	3.28	3.59	4.25	5.53	4.59
Receivables turnover	7.31	6.74	6.95	7.63	7.04
Payables turnover	25.20	23.20	25.81	26.78	33.86
Working capital turnover	1.67	1.22	1.36	1.27	0.80

Intuitive Surgical Inc's inventory turnover has shown a generally increasing trend over the years, from 4.59 in 2020 to 3.28 in 2024, indicating that the company is selling its inventory more efficiently. However, the latest figure of 3.28 suggests a slight decrease in inventory turnover efficiency compared to previous years.

Regarding receivables turnover, the company's performance has been relatively stable, fluctuating within a narrow range between 6.74 and 7.63 over the five-year period. This signifies that Intuitive Surgical Inc is collecting its receivables at a consistent pace.

In terms of payables turnover, there has been a downward trend from 33.86 in 2020 to 25.20 in 2024. A decreasing payables turnover ratio could indicate that the company is taking longer to settle its payables, which may impact cash flow management.

The working capital turnover ratio has been on an upward trajectory, increasing from 0.80 in 2020 to 1.67 in 2024. This implies that Intuitive Surgical Inc has been using its working capital more efficiently to generate sales revenues, reflecting positively on its liquidity management and operational effectiveness.

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	111.36	101.75	85.93	66.03	79.45
Days of sales outstanding (DSO)	days	49.91	54.16	52.51	47.85	51.83
Number of days of payables	days	14.48	15.73	14.14	13.63	10.78

Intuitive Surgical Inc's days of inventory on hand (DOH) have shown fluctuating trends over the years, starting at 79.45 days in 2020, decreasing to 66.03 days in 2021, then increasing to 85.93 days in 2022, and reaching 111.36 days by the end of 2024. This indicates that the company held inventory for a longer period in recent years, potentially tying up more capital in inventory.

On the other hand, the days of sales outstanding (DSO) have generally exhibited a downward trend, starting at 51.83 days in 2020 and decreasing to 47.85 days in 2021, before fluctuating slightly between 2022 and 2024. This suggests that Intuitive Surgical has been efficient in collecting receivables from its customers, which is a positive indicator of its liquidity and effectiveness in managing its accounts receivable.

The number of days of payables has shown a consistent increasing trend, going from 10.78 days in 2020 to 14.48 days in 2024. This indicates that the company is taking a longer time to pay its suppliers, which can be beneficial in managing cash flow and working capital.

Overall, the analysis of Intuitive Surgical Inc's activity ratios reveals a mixed bag of trends, with inventory management needing attention due to an increasing DOH, strong efficiency in accounts receivable collection as shown by decreasing DSO, and a deliberate strategy of stretching out payables over a longer period to optimize cash flow.

Long-term

	Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Fixed asset turnover	1.93	2.15	2.76	3.18	2.88
Total asset turnover	0.48	0.49	0.50	0.44	0.41

Intuitive Surgical Inc's fixed asset turnover has shown fluctuations over the past five years. It increased from 2.88 in 2020 to 3.18 in 2021, indicating that the company generated $3.18 in revenue for each dollar invested in fixed assets. However, the ratio then decreased to 2.76 in 2022, 2.15 in 2023, and further to 1.93 in 2024, suggesting a decreasing efficiency in generating revenue from fixed assets over time.

In contrast, the total asset turnover ratio, which measures how efficiently a company utilizes all its assets to generate revenue, has shown a generally increasing trend. It rose from 0.41 in 2020 to 0.44 in 2021, 0.50 in 2022, and then stabilized around 0.49 in 2023 and 0.48 in 2024. This indicates that the company generated more revenue relative to its total assets over the years.

Overall, while the fixed asset turnover ratio has been decreasing, suggesting a potential inefficiency in utilizing fixed assets, the total asset turnover ratio has shown improvement, indicating better efficiency in utilizing all of the company's assets to generate revenue.