Liquidity Services Inc (LQDT)
Activity ratios
Short-term
Turnover ratios
| Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | Sep 30, 2019 | |
|---|---|---|---|---|---|
| Inventory turnover | 20.13 | 16.68 | 14.19 | 29.00 | 30.26 |
| Receivables turnover | 40.46 | 23.78 | 43.99 | 38.92 | 34.01 |
| Payables turnover | 5.72 | 4.64 | 4.36 | 7.40 | 11.75 |
| Working capital turnover | 12.43 | 46.04 | 11.38 | 10.23 | 10.80 |
Liquidity Services Inc's activity ratios provide insight into the efficiency of the company's operations and management of its working capital.
The inventory turnover has generally shown an increasing trend over the past five years, indicating that the company is efficiently managing its inventory levels. The higher turnover indicates that the company is selling inventory more frequently, which can be positive for cash flow and reducing holding costs.
The receivables turnover has fluctuated over the years but has shown an overall increasing trend. This indicates that the company is collecting its receivables more quickly, which can improve cash flow and reduce the risk of bad debts.
In contrast, the payables turnover has fluctuated with no consistent trend over the years. The lower turnover in recent years may suggest that the company is taking longer to pay its suppliers, which could potentially strain supplier relationships and impact cash flow management.
The working capital turnover has also fluctuated over the years, with a significant decrease in 2022. This ratio measures how effectively the company is using its working capital to generate sales. The decrease in 2022 may indicate a change in the company's working capital management or sales performance.
Overall, the company's activity ratios suggest a mixed picture in terms of its efficiency in managing inventory, receivables, payables, and working capital. It may be important for the company to further analyze these ratios to identify opportunities for improvement in its operational and working capital management strategies.
Average number of days
| Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | Sep 30, 2019 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 18.14 | 21.88 | 25.72 | 12.59 | 12.06 |
| Days of sales outstanding (DSO) | days | 9.02 | 15.35 | 8.30 | 9.38 | 10.73 |
| Number of days of payables | days | 63.82 | 78.67 | 83.77 | 49.29 | 31.07 |
Days of inventory on hand (DOH) measures how many days it takes for a company to sell its inventory. A lower DOH indicates that the company is selling its inventory more quickly. Liquidity Services Inc's DOH has been fluctuating over the past five years, with a decrease from 42.26 days in 2021 to 28.51 days in 2023, indicating an improvement in inventory turnover efficiency.
Days of sales outstanding (DSO) measures how long it takes for a company to collect its accounts receivable. A lower DSO indicates that the company is collecting its receivables more quickly. Liquidity Services Inc's DSO has also fluctuated, with an increase from 8.31 days in 2021 to 15.37 days in 2022, and then a decrease to 9.11 days in 2023. This suggests some volatility in the company's ability to collect revenues from its customers.
Number of days of payables indicates how long it takes for a company to pay its suppliers. A higher number of days indicates that the company is taking longer to pay its suppliers. Liquidity Services Inc's days of payables have been volatile as well, with an increase from 83.47 days in 2020 to 128.33 days in 2022, then a decrease to 100.31 days in 2023. This suggests variability in the company's payment practices.
In summary, Liquidity Services Inc's activity ratios show fluctuations over the past five years, indicating variability in its inventory turnover, accounts receivable collection, and accounts payable management. It is important for the company to monitor and manage these ratios to ensure efficient working capital management and operational effectiveness.
Long-term
| Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | Sep 30, 2019 | |
|---|---|---|---|---|---|
| Fixed asset turnover | 18.51 | 14.69 | 14.63 | 11.61 | 12.10 |
| Total asset turnover | 1.10 | 0.97 | 1.01 | 1.05 | 1.22 |
The long-term activity ratios of Liquidity Services Inc, as indicated by the fixed asset turnover and total asset turnover, provide valuable insights into the company's efficiency in utilizing its assets to generate revenue.
The fixed asset turnover, which measures the company's ability to generate sales from its investment in fixed assets, has shown a consistent upward trend over the past five years. This indicates that the company has improved its efficiency in generating revenue from its long-term investments in property, plant, and equipment.
On the other hand, the total asset turnover, which reflects the company's ability to generate sales from all of its assets, has fluctuated over the same period. Although it experienced some variability, the overall trend indicates a moderate decline in the efficiency of generating sales from total assets.
In summary, the company has demonstrated a strong improvement in generating sales from its fixed assets, while the overall efficiency in generating revenue from all assets has shown some variability. It is important for the company to closely monitor and manage its asset turnover ratios to ensure optimal utilization of its assets for revenue generation.