NeoGenomics Inc (NEO)

Short-term

Turnover ratios

Neogenomics Inc.'s activity ratios show the efficiency of the company in managing its assets and liabilities to drive revenue generation. The inventory turnover ratio has been steadily increasing over the past five years, indicating that the company is selling its inventory more frequently each year. This suggests effective inventory management and potentially quicker conversion of inventory to sales.

The receivables turnover ratio has also been relatively stable, indicating that the company is collecting its receivables at a consistent rate each year. This implies that Neogenomics Inc. has efficient credit policies and a timely collection process for its sales.

The payables turnover ratio has shown an upward trend, suggesting that the company is taking less time to pay its suppliers over the years. This may indicate strong vendor relationships and negotiating power, enabling the company to manage its payable obligations efficiently.

The working capital turnover ratio has fluctuated over the years, but the general trend shows a decrease. A declining working capital turnover ratio may indicate a decrease in the efficiency of utilizing working capital to generate revenue. This could be due to changes in operating cycles or the management of working capital components such as inventory and receivables.

Overall, Neogenomics Inc.'s activity ratios reflect a mixed picture of efficiency in managing its assets and liabilities to drive revenue. The company's inventory and payables turnover ratios suggest improvements in operational efficiency, while the stability in receivables turnover indicates consistency in the collection of receivables. However, the fluctuation in the working capital turnover ratio could warrant further investigation into the company's working capital management practices.

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Average number of days

Activity ratios provide insight into how efficiently a company manages its assets and liabilities to generate sales. Let's analyze the activity ratios of Neogenomics Inc. over the past five years.

1. Days of Inventory on Hand (DOH):
- Neogenomics Inc.'s DOH has shown a fluctuating trend over the past five years, ranging from a low of 24.80 days in 2019 to a high of 41.68 days in 2020.
- Lower DOH indicates the company is efficiently managing its inventory levels, allowing for quicker turnover of goods.
- The decrease in DOH from 2020 to 2021 and subsequent improvements in 2022 and 2023 suggest better inventory management practices.

2. Days of Sales Outstanding (DSO):
- Neogenomics Inc.'s DSO has also varied over the years, with a range of 80.96 days to 87.74 days.
- A lower DSO is favorable as it signifies faster collection of receivables, leading to improved cash flows.
- The decrease in DSO from 2020 to 2021 followed by a slight increase in 2022 and 2023 may indicate changes in the company's credit policies or ability to collect receivables.

3. Number of Days of Payables:
- Neogenomics Inc.'s days of payables have generally been lower compared to inventory and sales outstanding days, ranging from 21.39 days to 35.24 days.
- Longer payable days suggest the company is taking more time to pay its suppliers, which can positively impact working capital.
- The fluctuations in payables days over the years may reflect changes in the company's vendor payment terms or purchase patterns.

Overall, the analysis of Neogenomics Inc.'s activity ratios indicates improvements in inventory management and stable collections practices. However, the company may need to monitor its payables days to ensure optimal utilization of working capital.

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Long-term

Neogenomics Inc. has shown a trend of improving fixed asset turnover over the past five years, indicating the company's ability to generate sales from its fixed assets efficiently. The ratio has increased steadily from 4.42 in 2021 to 6.43 in 2023, reaching its highest point during this period. This suggests that the company has been successful in utilizing its fixed assets to drive revenue growth.

In contrast, the total asset turnover for Neogenomics Inc. has fluctuated over the same period. While the ratio was at its highest in 2019 at 0.58, it dropped significantly in 2020 to 0.45 before further decreasing to 0.35 in 2023. This declining trend may indicate inefficiencies in utilizing the company's total assets to generate revenue.

Overall, Neogenomics Inc. has shown strength in its ability to generate sales from fixed assets, but it may need to focus on improving the efficiency of utilizing its total assets to enhance overall performance and profitability.