Stride Inc (LRN)

Short-term

Turnover ratios

The activity ratios for Stride Inc. from June 30, 2021, to June 30, 2025, reflect a consistent trend of increasing efficiency in inventory and payables management, accompanied by relatively stable receivables turnover and a declining working capital turnover.

Inventory Turnover: The ratio increased steadily from 25.24 in 2021 to 38.90 in 2025. This indicates an improvement in inventory management, with the company converting its inventory into sales more frequently over time. Such an increase suggests enhanced inventory control practices, reduced holding periods, and a potentially more efficient supply chain.

Receivables Turnover: The receivables turnover ratio remained relatively stable, with minor fluctuations—starting at 4.16 in 2021, slightly decreasing to 3.96 in 2023, then rising marginally to 4.30 in 2025. These figures suggest that the company's collections of accounts receivable have been consistent, indicating stable credit policies and effective receivables management during this period.

Payables Turnover: There is a clear upward trend, rising from 16.12 in 2021 to 33.24 in 2025. This indicates that the company is paying its suppliers more frequently or efficiently, possibly taking advantage of favorable credit terms or improving payment processes. The increasing payables turnover can suggest better management of payable obligations and possibly improved relationships with suppliers.

Working Capital Turnover: The ratio decreased from 2.79 in 2021 to 1.81 in 2025. This decline indicates that the company is generating less sales revenue per unit of working capital over time. It may reflect a more conservative approach to working capital utilization, or a strategic shift to support longer-term growth initiatives, which could temporarily reduce efficiency ratios.

Overall, the activity ratios demonstrate that Stride Inc. has enhanced its inventory and payables management efficiency over the observed period. While receivables management has remained stable, the declining working capital turnover suggests a potential shift in operational focus or a strategic pause in leveraging working capital for growth. This combination of trends signifies a company improving operational efficiency in inventory and payables but exercising caution or adjusting the utilization of working capital in its broader operational strategy.

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Average number of days

The analysis of Stride Inc’s activity ratios over the period from June 30, 2021, to June 30, 2025, reveals noteworthy trends in inventory management, receivables collection, and payables practices.

Days of Inventory on Hand (DOH): The data indicates a consistent decline in inventory holding periods, decreasing from 14.46 days in 2021 to 9.38 days in 2025. This trend suggests an improvement in inventory turnover, potentially due to enhanced supply chain efficiencies, better forecasting, or a strategic reduction in inventory levels. The reduction in DOH may contribute to improved cash flow and reduced inventory carrying costs.

Days of Sales Outstanding (DSO): Over the same period, DSO has exhibited fluctuations, starting at 87.71 days in 2021, rising slightly to 92.12 days in 2023, then decreasing to approximately 84.92 days by 2025. The increase during 2022 and 2023 indicates a period of extended receivables collection, which could reflect more lenient credit policies or slower customer payments. The subsequent decrease toward 2024 and 2025 suggests efforts to improve receivables management, leading to a more efficient collection cycle and potentially faster realization of cash from sales.

Number of Days of Payables: The period also shows a trend toward quicker settlement of payables, with the days of payables decreasing from 22.64 days in 2021 to 10.98 days in 2025. This acceleration implies that the company is paying its suppliers more promptly, which could be driven by improved liquidity, stronger supplier relationships, or strategic payment policies. Prompt payments may enhance supplier trust and could potentially lead to better credit terms or discounts.

Overall, the activity ratios reflect a strategic movement toward leaner inventory levels, more efficient receivables collection, and timely payables management. These adjustments suggest an emphasis on enhancing operational efficiency and liquidity position. The reduction in inventory on hand lowers working capital requirements, while more rapid receivables and payables cycles indicate effective cash flow management. Such trends are generally favorable, demonstrating a move toward optimized working capital management, although they must be balanced to maintain supplier relationships and customer satisfaction.

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Long-term

The analysis of Stride Inc.'s long-term activity ratios reveals notable trends over the period from June 30, 2021, to June 30, 2024, with data for 2025 absent.

The fixed asset turnover ratio experienced significant fluctuations between 2021 and 2024. Specifically, it increased markedly from 9.22 in 2021 to a peak of 27.41 in 2022, indicating a substantial improvement in the efficiency with which the company utilized its fixed assets to generate sales. This elevated ratio persisted into 2023, reaching 35.11, suggesting continued effective deployment or utilization of fixed assets within that period. However, in 2024, the ratio declined to 19.36, signaling a potential decrease in asset efficiency or a change in asset base, possibly due to expansion, capital investments, or operational adjustments. The data for 2025 is not available, precluding further analysis for that year.

In contrast, the total asset turnover ratio shows a relatively stable and modest upward trend over the same period. Starting at 0.97 in 2021, it incrementally increased to 1.03 in 2022, then slightly to 1.04 in 2023, reaching 1.06 in 2024. This suggests a consistent, albeit gradual, improvement in the company's overall efficiency in generating sales from its total assets. The ratio nearing and surpassing 1.0 implies the company is generating nearly or more than one dollar of sales for each dollar of assets employed, reflecting efficient asset management with minimal fluctuations over these years.

Overall, the data indicates that Stride Inc. experienced a sharp enhancement in fixed asset efficiency between 2021 and 2023, followed by a decline in 2024. Meanwhile, the broader measure of total asset efficiency remained stable and improved slightly, emphasizing steady management of overall assets. The divergence between the fixed asset turnover and total asset turnover ratios could be attributed to varying asset utilization strategies or changes in the composition and deployment of assets within the company's operations.