Medpace Holdings Inc (MEDP)

Short-term

Turnover ratios

1. Receivables Turnover:
- Receivables turnover measures how efficiently a company is collecting its accounts receivable during a specific period.
- Medpace Holdings Inc's receivables turnover has been on an increasing trend over the past five years, indicating a more efficient collection of receivables from customers.
- A higher receivables turnover ratio signifies that the company is collecting its outstanding payments faster, which can improve cash flow and reduce the risk of bad debts.

2. Payables Turnover:
- Payables turnover ratio reflects how efficiently a company is managing its accounts payable by paying its suppliers.
- Medpace Holdings Inc's payables turnover has also shown an increasing trend over the five-year period, suggesting that the company is taking longer to pay its suppliers.
- A higher payables turnover ratio may indicate that the company is taking advantage of favorable credit terms or efficiently managing its working capital.

3. Inventory Turnover:
- Unfortunately, the data for inventory turnover is not provided, making it difficult to analyze Medpace Holdings Inc's efficiency in managing its inventory levels and sales.
- Inventory turnover ratio measures how quickly a company sells its inventory and replenishes it, and a higher ratio usually indicates efficient inventory management.
- Without this data, it is challenging to assess how effectively Medpace Holdings Inc is utilizing its inventory to generate sales.

4. Working Capital Turnover:
- Working capital turnover ratio shows how effectively a company is using its working capital to generate sales revenue.
- Medpace Holdings Inc's working capital turnover has been present only for the past three years, with a notable decrease from 27.61 in 2020 to 8.54 in 2021.
- This decrease could suggest a decline in the efficiency of using working capital to generate sales, which may warrant further investigation to identify the underlying reasons for this change.

In conclusion, based on the activity ratios provided, Medpace Holdings Inc has shown improvements in receivables and payables turnover ratios over the past five years, indicating more efficient management of accounts receivable and accounts payable. However, the lack of data for inventory turnover and the notable decrease in working capital turnover raise some concerns that would require a deeper analysis to understand the company's overall operational efficiency and cash flow management.

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Average number of days

Days of sales outstanding (DSO) measures how long it takes for the company to collect cash from its credit sales. A lower DSO indicates a faster collection of receivables, which is favorable as it indicates efficient management of accounts receivable. Medpace Holdings Inc has shown improvement in its DSO over the past five years, decreasing from 65.99 days in 2019 to 57.75 days in 2023.

Number of days of payables measures how long the company takes to pay its suppliers. A higher number of days of payables suggests that the company takes longer to pay its bills, which can be beneficial as it allows the company to hold onto cash longer. Medpace Holdings Inc has shown a decreasing trend in its payables period over the years, from 13.29 days in 2019 to 8.54 days in 2023, indicating a quicker payment cycle.

Days of inventory on hand (DOH) is not provided for Medpace Holdings Inc in the table. DOH measures how long it takes for a company to sell its inventory. A lower DOH indicates efficient inventory management, as it shows that the company is selling its products quickly. Without data for DOH, a comprehensive analysis of Medpace Holdings Inc's inventory management efficiency cannot be conducted.

Overall, based on the available data, Medpace Holdings Inc has improved its collection of receivables and payment to suppliers over the past five years, reflecting positive trends in managing its working capital effectively.

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Long-term

The fixed asset turnover ratio measures how efficiently a company utilizes its fixed assets to generate revenue. A higher fixed asset turnover ratio signifies that the company is generating more revenue per dollar of fixed assets.

From the data provided, we can see that Medpace Holdings Inc has generally shown an increasing trend in its fixed asset turnover ratio over the past five years, with a significant spike in 2019 followed by fluctuations in subsequent years but overall remaining at relatively high levels compared to previous years. In 2023, the fixed asset turnover ratio reached 15.64, indicating that the company generated $15.64 in revenue for every $1 of fixed assets owned.

On the other hand, the total asset turnover ratio reflects how efficiently a company uses its total assets to generate sales. A higher total asset turnover ratio suggests that the company is efficient in generating revenue from its total asset base.

Looking at the total asset turnover ratio for Medpace Holdings Inc, we can observe an increasing trend over the five-year period. The ratio has consistently improved, reaching 1.14 in 2023, which indicates that the company generated $1.14 in revenue for every $1 of total assets held.

Overall, both the fixed asset turnover ratio and total asset turnover ratio for Medpace Holdings Inc show positive trends, indicating improved efficiency in utilizing both fixed and total assets to generate revenue over the past five years. This suggests that the company has been effective in managing its asset base to drive sales growth and improve operational performance.