Grand Canyon Education Inc (LOPE)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Inventory turnover | — | — | — | — | 651.45 |
| Receivables turnover | 11.96 | 10.63 | 11.94 | 13.17 | 14.97 |
| Payables turnover | 14.40 | 12.50 | 9.39 | 13.03 | 13.17 |
| Working capital turnover | 4.00 | 5.25 | 1.54 | 3.91 | 6.78 |
Inventory turnover data is missing from the table provided, but focusing on the other activity ratios for Grand Canyon Education Inc, we can see the following trends:
1. Receivables Turnover: This ratio measures how efficiently the company collects its accounts receivable over a period. The increasing trend from 2019 to 2021 indicates that the company was able to collect its receivables more quickly during this period. The slight dip in 2022 and 2023 may suggest a slight slowdown in collecting receivables. Overall, the company seems to have a healthy receivables turnover ratio, indicating effective management of accounts receivable.
2. Payables Turnover: Payables turnover ratio reflects how efficiently the company is managing its accounts payables. The significant increase from 2020 to 2021 suggests that the company was paying its suppliers more quickly in 2021. The data shows that payables turnover increased steadily from 2019 to 2021 before dropping slightly in 2022 and 2023. This may indicate changes in the company's payment terms or supplier relationships.
3. Working Capital Turnover: This ratio measures how efficiently the company is utilizing its working capital to generate sales. The declining trend in working capital turnover from 2019 to 2021 could suggest that the company was less efficient in utilizing its working capital to generate sales during this period. The increase in 2022 followed by a slight decrease in 2023 may indicate fluctuations in working capital efficiency.
In conclusion, Grand Canyon Education Inc's receivables turnover shows consistency and effectiveness in collecting receivables. The payables turnover reflects changes in payment practices or supplier relationships. The working capital turnover suggests some fluctuations in efficiency in utilizing working capital.
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 | — | — | — | — | 0.56 |
| Days of sales outstanding (DSO) | days | 30.51 | 34.35 | 30.56 | 27.72 | 24.37 |
| Number of days of payables | days | 25.36 | 29.21 | 38.89 | 28.01 | 27.71 |
Days of inventory on hand is not provided in the table, but we can analyze Days of Sales Outstanding (DSO) and Number of days of payables for Grand Canyon Education Inc.
1. Days of Sales Outstanding (DSO):
- DSO measures how long it takes for a company to collect payment after making a sale.
- A lower DSO indicates that the company is collecting payments more quickly, which is generally favorable as it accelerates cash flows.
- Grand Canyon Education Inc's DSO has fluctuated over the years, ranging from 26.31 days in 2019 to 32.12 days in 2022.
2. Number of days of payables:
- This ratio represents the average number of days a company takes to pay its suppliers.
- A higher number of days of payables may indicate that the company is taking longer to settle its obligations, which can signify potential cash flow management strategies.
- Grand Canyon Education Inc's number of days of payables has shown variability, decreasing from 67.17 days in 2021 to 41.66 days in 2023.
Overall, it appears that Grand Canyon Education Inc has been improving its collection efficiency (DSO) and managing its payables effectively over the years, which can have implications for cash flow management and working capital efficiency. These trends suggest a proactive approach in optimizing cash conversion cycles and financial performance.
Long-term
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Fixed asset turnover | 5.66 | 6.18 | 6.60 | 6.53 | 6.41 |
| Total asset turnover | 1.03 | 1.09 | 0.73 | 0.46 | 0.45 |
The long-term activity ratios of Grand Canyon Education Inc, specifically the fixed asset turnover and total asset turnover, provide insight into how efficiently the company is utilizing its assets to generate revenue.
1. Fixed Asset Turnover:
The fixed asset turnover ratio measures how effectively the company is using its fixed assets to generate sales. With a decreasing trend from 6.50 in 2019 to 5.66 in 2023, the company's fixed asset turnover has shown a decline over the years. This indicates that Grand Canyon Education Inc is generating less revenue per dollar of fixed assets invested, which may imply less efficient utilization of its fixed assets for revenue generation.
2. Total Asset Turnover:
The total asset turnover ratio reflects the company's ability to generate revenue in relation to its total assets. Grand Canyon Education Inc's total asset turnover has demonstrated fluctuations, with a sharp increase from 0.46 in 2019 to 1.09 in 2022, followed by a decrease to 1.03 in 2023. A total asset turnover ratio above 1 indicates that the company is generating more in sales than the value of its total assets. Therefore, the company has been able to efficiently utilize its total assets to generate revenue, albeit with some variability in performance over the years.
In conclusion, while Grand Canyon Education Inc has shown efficiency in utilizing its total assets to generate revenue, there has been a decline in the efficiency of utilizing its fixed assets for revenue generation. It is essential for the company to closely monitor these ratios and potentially assess its fixed asset management strategies to improve overall operational efficiency.