Stride Inc (LRN)

Short-term

Turnover ratios

The analysis of Stride Inc.'s activity ratios over the specified periods reveals varying trends in operational efficiency and asset management.

Inventory Turnover:
The inventory turnover ratio demonstrates considerable fluctuation throughout the observed period. Notably, it peaks at 62.41 times on December 31, 2024, indicating highly efficient inventory management during that time, with inventory being converted into sales approximately 62 times annually. Prior to this peak, the ratio experienced periods of decline, such as a low of 25.24 on June 30, 2021, suggesting slower inventory movement. The overall pattern reveals periods of rapid turnover interspersed with slower phases, reflecting changing inventory policies, product mix, or market conditions.

Receivables Turnover:
This ratio generally stayed within a moderate range, with some upward movement over time. It reached a maximum of 4.32 on June 30, 2024, implying an improvement in collections or credit management. Conversely, the lowest value recorded was 2.75 on September 30, 2020, indicating less efficient receivables collection at that time. The relatively stable pattern suggests consistent efforts in receivables management, with incremental improvements noted in certain quarters.

Payables Turnover:
The payables turnover ratio exhibits significant variability, with notable peaks and troughs. For example, it peaked at 43.63 on December 31, 2024, signifying that Stride Inc. paid its suppliers more frequently relative to its accounts payable balance, potentially indicating better cash flow management. On the other hand, low points such as 8.42 on September 30, 2020, suggest periods of slower payments. Fluctuations in this ratio reflect changing payment policies, cash management strategies, or supplier relationships over the periods reviewed.

Working Capital Turnover:
This ratio remains relatively stable but exhibits a declining trend over time. It declined from 2.03 on September 30, 2020, to approximately 1.81 by June 30, 2025. The decreasing figure indicates that the company is generating less sales per unit of working capital, which could signal diminishing efficiency in using short-term assets and liabilities to support sales growth or changes in working capital management strategies.

Overall, the activity ratios point toward strategic management adjustments over the periods, with marked improvements of inventory turnover and payables management around late 2024, while receivables turnover remains relatively steady. The declining working capital turnover suggests increasing pressure on the company's ability to efficiently utilize its short-term resources in supporting sales activities.

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Average number of days

The provided data on Stride Inc.’s activity ratios reveals trends and fluctuations over multiple periods, specifically in the areas of inventory management, receivables collection, and payables payment practices.

Inventory Turnover (Days of Inventory on Hand):
The days of inventory on hand exhibit considerable variation, indicating shifts in inventory turnover efficiency. In the initial period (September 2020), inventory was held for approximately 11.31 days, increasing slightly to 12.23 days by the end of 2020. A notable decrease occurred in the subsequent period (March 2021) to about 11.33 days. The peak in inventory holding times was observed on June 30, 2021, with 14.46 days, signaling a slowdown in inventory turnover, possibly due to inventory accumulation or slower sales. Subsequently, there was a marked improvement, with inventory days decreasing to as low as 7.16 days by March 2023, suggesting heightened efficiency in inventory management. However, some cyclical increases occurred, notably in June 2023, reaching 11.26 days, and September 2023, at 6.60 days. The most recent data points (December 2023 to June 2025) suggest a consistent reduction, stabilizing around 5.61 days in December 2024 before rising slightly to 9.38 days in June 2025. Overall, the trend indicates periods of inventory optimization interspersed with some fluctuations.

Receivables Collection (Days of Sales Outstanding - DSO):
DSO figures demonstrate variability in receivables collection efficiency. Starting at 132.65 days in September 2020, the metric improved over time to approximately 109.59 days by March 2021, and further down to 87.71 days by June 2021, indicating a period of strengthened collection efforts. However, fluctuations resumed, with DSO rising again to over 121 days in September 2021 and peaking at 121.44 days in September 2023. Although some periods show modest reduction, such as 84.58 days in June 2024, DSO generally remains elevated, suggesting ongoing challenges or longer collection cycles. This indicates that receivables collection efficiency has experienced periods of improvement but continues to be somewhat extended, particularly in the recent periods, reflecting potential credit policy factors or customer payment behaviors.

Payables Management (Number of Days of Payables):
The days of payables show significant inconsistency. In the earliest period (September 2020), payments were deferred for approximately 43.33 days, but this decreased sharply to roughly 16.78 days by December 2020, indicating faster payment cycles. From late 2020 into 2021, the payable days mostly ranged between 11.76 and 22.64 days, suggesting a relatively stable or slightly faster payment approach. Notably, in September 2023, the payable days increased again to 22.65 days, perhaps reflecting strategic payments or vendor negotiations. The most recent data show a decline again to approximately 8.37 days in December 2023, with slight fluctuations afterward, settling around 10.98 days in June 2025. These variations suggest a tendency to manage payables efficiently, sometimes paying vendors quickly and other times extending payments, possibly for cash flow optimization.

Summary of Activity Ratios:
Overall, Stride Inc. has demonstrated an ability to optimize inventory holdings over the observed periods, reducing inventory days significantly by the end of 2024. Receivables collection remains relatively prolonged, with DSO values consistently above 80 days, indicating room for improvement in cash collection processes. Payables management shows flexibility, often aligning pay cycle durations with strategic financial planning, balancing supplier relationships, and cash flow needs. These activity ratios collectively reflect the company's efforts to balance operational efficiency with liquidity considerations, marked by periods of improvement and adjustment in response to internal strategies or external economic conditions.

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Long-term

The analysis of Stride Inc's long-term activity ratios reveals insightful trends concerning the company's asset utilization efficiency over the observed period.

The Fixed Asset Turnover ratio demonstrates significant variability, indicating fluctuating efficiency in the utilization of fixed assets to generate sales. Initially, the ratio hovered around 16.46 on September 30, 2020, and exhibited minor fluctuations through 2020 and early 2021, maintaining values mostly between approximately 16 and 17. A notable decline occurred during the second quarter of 2021, with the ratio dropping to 9.22 and remaining near that level through the third quarter, signaling a potential decrease in fixed asset efficiency or increased asset base relative to sales.

Subsequently, a marked recovery and upward trend can be observed starting in the third quarter of 2021, when the ratio increased substantially to 24.11. This upward trajectory accelerated into 2022, peaking at 35.11 on June 30, 2023. Despite some fluctuations, notably a decrease to 15.06 by September 2023, the ratio recovered slightly to 16.46 by the end of 2024, approaching the initial levels observed in late 2020. The high points reflect periods of more efficient asset utilization, potentially linked to strategic asset management or operational improvements.

In contrast, the Total Asset Turnover ratio shows a more stable and steadily increasing trend over the same period. Beginning at 0.82 on September 30, 2020, it gradually rose to 1.09 by December 31, 2023, indicating enhanced overall efficiency in generating sales from the total asset base. The ratio maintained relatively consistent levels throughout 2022 and 2023, with minor fluctuations, suggesting operational stability.

Overall, while the total asset turnover indicates steady efficiency improvements over time, the fixed asset turnover exhibits more pronounced volatility, with periods of significant inefficiency possibly attributable to asset expansion, reorganization, or operational adjustments. The oscillations in fixed asset efficiency contrast with the more stable trend observed in overall asset utilization, providing a nuanced view of Stride Inc's long-term operational dynamics.