Kyndryl Holdings Inc (KD)

Short-term

Turnover ratios

Based on the provided data, we can analyze Kyndryl Holdings Inc's activity ratios as follows:

1. Inventory Turnover:
- The inventory turnover ratio reflects Kyndryl's efficiency in managing its inventory. The trend shows a consistent improvement from 12.46 in 2021 to 13.40 in 2023 before a slight decline to 12.19 in 2024.
- Generally, a higher turnover ratio indicates that the company is selling its inventory more frequently, which is a positive indicator of efficient inventory management.

2. Receivables Turnover:
- The receivables turnover ratio measures how effectively Kyndryl collects outstanding receivables. The ratio declined from 13.40 in 2021 to 8.19 in 2022 but improved in the following years.
- A lower turnover ratio may suggest delays in collecting payments from customers, impacting cash flow. However, the increasing trend after 2022 is favorable for Kyndryl.

3. Payables Turnover:
- The payables turnover ratio gauges how long Kyndryl takes to pay its suppliers. The trend shows a decrease from 18.65 in 2021 to 8.17 in 2023 before a slight increase in 2024.
- A lower payables turnover ratio may indicate that the company is taking longer to settle its payables, which can affect relationships with suppliers or cash flow management.

4. Working Capital Turnover:
- The working capital turnover ratio indicates how efficiently Kyndryl uses its working capital to generate sales revenue. The significant increase from "—" to 14.13 in 2022 and further to 179.22 in 2023 suggests a substantial improvement in utilizing working capital efficiently.
- A higher working capital turnover ratio implies that Kyndryl is generating more sales revenue using its available working capital, indicating effective management of capital resources.

In conclusion, Kyndryl's activity ratios demonstrate varying levels of efficiency in managing inventory, collecting receivables, paying payables, and utilizing working capital. The trends seen in these ratios can provide insights into the company's operational effectiveness and financial performance over the years.

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Average number of days

Activity ratios provide insights into how efficiently a company manages its assets and operations. By examining Kyndryl Holdings Inc's activity ratios, we can assess the effectiveness of its inventory management, accounts receivable collection, and accounts payable policies.

1. Days of Inventory on Hand (DOH):
- DOH represents the average number of days it takes for Kyndryl Holdings Inc to sell its inventory. A decreasing trend in DOH, from 29.30 days in 2021 to 27.24 days in 2023, suggests that the company is managing its inventory more efficiently. However, there was a slight increase to 29.94 days in 2024 before data for 2025 was unavailable. An ideal DOH varies by industry but generally lower is better as it indicates faster turnover of inventory.

2. Days of Sales Outstanding (DSO):
- DSO reflects the average number of days it takes for Kyndryl Holdings Inc to collect its accounts receivable. The significant increase in DSO from 27.24 days in 2021 to 44.59 days in 2022 raises concerns as it implies a potential issue with timely collection of sales. There was a decrease to 32.65 days in 2023 and a slight increase to 36.36 days in 2024. Monitoring DSO is crucial as a lower DSO indicates faster collection of receivables, which improves cash flow.

3. Number of Days of Payables:
- This ratio represents the average number of days Kyndryl Holdings Inc takes to pay its suppliers. The increase in the number of days of payables from 19.57 days in 2021 to 44.66 days in 2023 may indicate a shift towards extending payment terms. However, this trend reversed slightly to 38.97 days in 2024. A higher number of days of payables could imply better cash flow management but could also strain supplier relationships if not managed effectively.

In conclusion, analyzing Kyndryl Holdings Inc's activity ratios provides valuable insights into its operational efficiency and financial health. Monitoring these ratios over time can help identify trends and potential areas for improvement in the company's working capital management.

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Long-term

The long-term activity ratios of Kyndryl Holdings Inc provide insights into the company's efficiency in utilizing its assets over time.

1. Fixed Asset Turnover: This ratio measures how efficiently the company generates revenue from its fixed assets. An increase in the fixed asset turnover ratio over the years, from 3.78 in March 31, 2021, to 4.36 in March 31, 2022, and further to 4.55 in March 31, 2023, indicates that Kyndryl has been able to generate more revenue per dollar invested in fixed assets. However, the data is not available for March 31, 2024, and March 31, 2025, limiting the ability to assess the trend in recent years. Typically, a higher fixed asset turnover ratio suggests better asset utilization efficiency.

2. Total Asset Turnover: This ratio reflects how efficiently the company generates sales from all its assets. The total asset turnover ratio decreased from 1.73 in March 31, 2021, to 1.41 in March 31, 2022, and then increased slightly to 1.49 in March 31, 2023, and further to 1.52 in March 31, 2024. Unfortunately, the data for March 31, 2025, is not available, which impairs a complete analysis. A declining total asset turnover ratio could indicate that Kyndryl may not be effectively using its total assets to generate revenue, while an increasing ratio could suggest an improved efficiency in asset utilization.

In conclusion, based on the available data, Kyndryl Holdings Inc has shown an improvement in the efficiency of generating revenue from its fixed assets over the years. However, the trend in total asset turnover is more mixed, with a decline followed by a slight recovery. It is essential for the company to focus on optimizing its asset utilization to ensure sustainable growth and profitability.