Inari Medical Inc (NARI)

Short-term

Turnover ratios

Inventory turnover for Inari Medical Inc has been relatively consistent over the last four years, ranging from 1.18 to 1.38. This indicates that the company is managing its inventory efficiently, with an average of around 1.30 times per year.

Receivables turnover has shown steady improvement from 4.99 in 2020 to 7.04 in 2023. This suggests that the company is collecting its accounts receivable more quickly, which is positive for its cash flow and liquidity.

Payables turnover has fluctuated over the years but has generally been around 4-6 times per year. This indicates that Inari Medical Inc is paying its suppliers in a timely manner and managing its trade payables effectively.

Working capital turnover has shown significant improvement over the years, increasing from 0.73 in 2020 to 3.10 in 2023. This indicates that the company is generating more revenue relative to its working capital, which is a positive sign of operational efficiency.

Overall, the activity ratios suggest that Inari Medical Inc is effectively managing its inventory, receivables, payables, and working capital, which can contribute to its overall financial health and performance.

---

Average number of days

Inari Medical Inc's activity ratios provide insight into how efficiently the company manages its inventory, accounts receivable, and accounts payable.

1. Days of Inventory on Hand (DOH):
- In 2023, Inari Medical had 265.09 days of inventory on hand, a slight improvement from 2022 (267.20 days).
- The decreasing trend in DOH indicates that the company is managing its inventory more effectively by turning over its stock more quickly.

2. Days of Sales Outstanding (DSO):
- In 2023, Inari Medical had 51.85 days of sales outstanding, a decrease from the previous year (55.79 days).
- The declining DSO suggests that the company is collecting its accounts receivable faster, which is a positive sign of efficient credit management.

3. Number of Days of Payables:
- In 2023, Inari Medical had 65.36 days of payables, an increase from the prior year (62.81 days).
- The increase in the number of days of payables may imply that the company is taking longer to pay its suppliers, potentially improving its cash flow position.

Overall, the activity ratios indicate that Inari Medical Inc is effectively managing its inventory, accounts receivable, and accounts payable, which can lead to improved working capital management and overall operational efficiency.

---

Long-term

In analyzing Inari Medical Inc's long-term activity ratios, we first look at the fixed asset turnover ratio, which measures the efficiency of the company in utilizing its fixed assets to generate sales. The trend shows consistent improvement over the four-year period, with a notable increase from 16.82 in 2021 to 23.59 in 2023. This indicates that the company is generating more revenue for each dollar invested in fixed assets, reflecting improved operational efficiency and increased productivity.

Next, we consider the total asset turnover ratio, which evaluates how effectively the company is using all its assets to generate revenue. Although the ratio fluctuates slightly from year to year, the general trend shows a gradual decline from 0.89 in 2021 to 0.73 in 2023. A lower total asset turnover ratio may suggest that the company is becoming less efficient in utilizing its total assets to generate sales.

Overall, while the fixed asset turnover ratio demonstrates a positive trend, indicating improved efficiency in utilizing fixed assets, the declining trend in the total asset turnover ratio raises concerns about the company's overall asset management efficiency. It may be beneficial for Inari Medical Inc to further assess and optimize its asset utilization strategies to enhance overall operational performance and profitability in the long term.