Grand Canyon Education Inc (LOPE)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Inventory turnover | — | — | — | — | — |
| Receivables turnover | 12.36 | 11.96 | 10.63 | 11.94 | 13.17 |
| Payables turnover | 10.00 | 14.40 | 12.50 | 9.39 | 13.03 |
| Working capital turnover | 3.34 | 4.00 | 5.25 | 1.54 | 3.91 |
The activity ratios of Grand Canyon Education Inc indicate the efficiency with which the company is managing its resources and operations.
1. Receivables Turnover:
- The receivables turnover ratio measures how efficiently the company is collecting payments from its customers.
- The trend shows a slight decrease from 13.17 in 2020 to 12.36 in 2024, indicating that the company took slightly longer to collect payments in 2024 compared to 2020. However, the ratio remained relatively stable over the years, highlighting consistent performance in managing accounts receivable.
2. Payables Turnover:
- The payables turnover ratio assesses how quickly the company pays its suppliers for goods and services.
- The ratio fluctuated over the years, with a significant decrease from 13.03 in 2020 to 9.39 in 2021, followed by fluctuations in subsequent years. The company improved its payables turnover in 2023, indicating more efficient management of trade payables.
3. Working Capital Turnover:
- The working capital turnover ratio evaluates how effectively the company is utilizing its working capital to generate revenue.
- The ratio increased from 3.91 in 2020 to 5.25 in 2022, suggesting an improvement in the company's efficiency in utilizing its working capital. However, there was a slight decline in 2024 compared to 2022, indicating a marginal decrease in efficiency in generating revenue from working capital.
Overall, despite some fluctuations, Grand Canyon Education Inc maintained a reasonable level of efficiency in its activity ratios, demonstrating effective management of its resources and operations over the years.
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 | — | — | — | — | — |
| Days of sales outstanding (DSO) | days | 29.52 | 30.51 | 34.35 | 30.56 | 27.72 |
| Number of days of payables | days | 36.51 | 25.36 | 29.21 | 38.89 | 28.01 |
The activity ratios provide insights into how efficiently Grand Canyon Education Inc manages its operations.
1. Days of Inventory on Hand (DOH):
- The data provided does not include information on the days of inventory on hand for Grand Canyon Education Inc. This ratio typically indicates the number of days it takes for the company to sell its inventory, which is essential for assessing inventory management efficiency.
2. Days of Sales Outstanding (DSO):
- The Days of Sales Outstanding measure indicates the average number of days it takes for the company to collect payments after making a sale.
- From 2020 to 2024, the DSO has fluctuated, with the lowest value of 27.72 days in 2020 and the highest value of 34.35 days in 2022.
- The increasing trend from 2020 to 2022 may suggest delays in receiving payments, impacting the company's cash flow.
3. Number of Days of Payables:
- The Number of Days of Payables ratio represents the number of days it takes for the company to pay its suppliers.
- Grand Canyon Education Inc's payables days have varied over the years, with the lowest value of 25.36 days in 2023 and the highest value of 38.89 days in 2021.
- A lower number of days of payables indicates faster payment to suppliers, while a higher number may suggest better working capital management.
In conclusion:
- The company needs to focus on managing its accounts receivable efficiently to reduce the DSO and enhance cash flow.
- Monitoring inventory levels and implementing inventory control measures could help improve working capital management.
- Maintaining an optimal balance between accounts payables and receivables is crucial for sustaining healthy cash flow and operational efficiency over time.
Long-term
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Fixed asset turnover | 5.84 | 5.66 | 6.18 | 6.60 | 6.53 |
| Total asset turnover | 1.01 | 1.03 | 1.09 | 0.73 | 0.46 |
The Fixed Asset Turnover ratio measures how efficiently a company is utilizing its fixed assets to generate revenue. In the case of Grand Canyon Education Inc, the trend shows a consistent performance from 2020 to 2023, with slight fluctuations. The ratio increased from 6.53 in 2020 to 6.60 in 2021, indicating a slight improvement in the company's ability to generate revenue from its fixed assets. However, there was a decrease in the ratio to 5.66 in 2023, which suggests a potential decline in efficiency in utilizing fixed assets to generate revenue. The ratio then slightly increased to 5.84 in 2024, indicating some recovery in asset utilization.
On the other hand, the Total Asset Turnover ratio reflects how efficiently a company is utilizing all its assets to generate revenue. Grand Canyon Education Inc showed a significant improvement in this ratio from 2020 to 2023, with a sharp increase from 0.46 in 2020 to 1.09 in 2022, indicating a substantial improvement in the company's overall asset utilization efficiency. However, there was a slight drop in the ratio to 1.03 in 2023 and further to 1.01 in 2024, suggesting a slight decline in the company's ability to generate revenue from its total assets effectively.
Overall, Grand Canyon Education Inc's long-term activity ratios exhibit some fluctuations in asset turnover efficiency over the years, with varying trends in both Fixed Asset Turnover and Total Asset Turnover ratios. These fluctuations may indicate changes in the company's operational efficiency and asset utilization strategies over the years. Further analysis and comparison with industry benchmarks may provide more insights into the company's performance in this aspect.