Myriad Genetics Inc (MYGN)

Short-term

Turnover ratios

The activity ratios of Myriad Genetics, Inc. provide insights into the efficiency of the company's operations in managing its inventory, receivables, payables, and working capital.

1. Inventory Turnover: The inventory turnover ratio has remained relatively stable over the past five years, ranging from 10.05 to 12.92, with a significant increase in 2021. This indicates that the company is able to sell through its inventory efficiently, with products being replaced approximately 10 to 13 times during the year. A higher ratio suggests effective inventory management and an optimized supply chain.

2. Receivables Turnover: Myriad Genetics has maintained a consistent receivables turnover ratio between 6.14 and 8.99 over the past five years. This indicates that the company collects its accounts receivable approximately 6 to 9 times during the year, showing effective credit and collection policies. A higher ratio signifies a faster conversion of credit sales into cash, reflecting positively on the company's liquidity.

3. Payables Turnover: The payables turnover ratio for Myriad Genetics has shown fluctuations, with values ranging from 6.04 to 9.16 over the five-year period. A higher ratio indicates that the company is paying its suppliers more frequently, which could be beneficial in terms of maintaining good relationships with vendors. It also suggests efficient management of trade credit terms.

4. Working Capital Turnover: The working capital turnover ratio, reflecting the efficiency of working capital utilization to generate sales, has varied between 2.46 and 4.94 over the five-year period. A higher ratio signifies that the company is generating more revenue per dollar of working capital, indicating efficient utilization of resources. Myriad Genetics' ability to generate sales relative to its working capital has improved over the years, indicating enhanced operational efficiency.

Overall, the analysis of these activity ratios for Myriad Genetics, Inc. highlights the company's strong operational efficiency in managing inventory, receivables, payables, and working capital. Consistent or improving ratios suggest effective management practices that contribute to the company's overall financial health and sustainability.

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Average number of days

The activity ratios of Myriad Genetics, Inc. provide insight into how efficiently the company manages its inventory, collects receivables, and pays its suppliers.

1. Days of Inventory on Hand (DOH):
- The trend in the DOH ratio shows fluctuations over the years, with a peak at 36.32 days in 2022 and a low of 28.26 days in 2021. In general, the company has been able to effectively manage its inventory levels, maintaining an average of around 34 days in recent years. A lower DOH signifies quicker inventory turnover, which can be indicative of efficient inventory management.

2. Days of Sales Outstanding (DSO):
- The DSO ratio indicates the average number of days it takes for the company to collect its accounts receivable. The trend shows variability, with DSO ranging from 40.58 days in 2020 to 59.44 days in 2019. A lower DSO is favorable as it implies faster collection of receivables, enhancing cash flow and liquidity.

3. Number of Days of Payables:
- The days of payables ratios reveal the average number of days it takes for the company to pay its suppliers. Myriad Genetics, Inc. has shown fluctuations in this ratio, with a peak of 60.47 days in 2019 and a low of 39.87 days in 2023. A higher number of days of payables may indicate that the company is taking longer to pay its suppliers, potentially reflecting favorable credit terms or financial distress.

In summary, Myriad Genetics, Inc. has exhibited varying efficiency in managing its inventory, receivables, and payables over the years. The company's ability to maintain optimal levels of these ratios can impact its working capital management and overall financial health. Further analysis and comparison with industry benchmarks may provide additional insights into the company's operational performance.

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Long-term

The fixed asset turnover ratio for Myriad Genetics, Inc. has demonstrated a declining trend over the years, declining from 15.88 in 2021 to 6.33 in 2023. This could indicate that the company is generating less revenue from its fixed assets over time, which may be a concern as it suggests a decrease in efficiency in utilizing these assets to generate sales.

On the other hand, the total asset turnover ratio has fluctuated within a relatively narrow range, ranging from 0.45 in June 2020 to 0.66 in December 2023. This ratio measures how efficiently the company is using its total assets to generate revenue. While the ratio has varied, it has generally remained below 1, which could suggest that the company may have excess assets compared to its revenue generation.

Overall, the company's long-term activity ratios indicate a need for closer monitoring of asset utilization and efficiency in generating revenue from both fixed and total assets. The decreasing trend in fixed asset turnover and consistently low total asset turnover may necessitate a review of the company's asset management strategies to improve efficiency and optimize asset utilization for revenue generation.