ServiceNow Inc (NOW)

Activity ratios

Short-term

Turnover ratios

	Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019
Inventory turnover	4.17	4.36	4.30	4.19	4.26	—	—	—	4.46	4.69	4.55	4.41	4.31	4.53	4.52	4.55	4.55	4.76	4.67	4.60
Receivables turnover	4.41	7.26	7.33	6.87	4.20	7.70	7.74	7.59	4.24	7.13	6.62	7.49	4.48	6.69	6.26	6.04	4.14	5.98	5.98	6.65
Payables turnover	15.25	26.38	10.08	7.20	5.74	7.86	5.59	8.57	15.19	19.64	11.83	9.75	29.03	17.86	10.12	11.27	15.03	12.17	10.81	17.21
Working capital turnover	21.77	19.04	9.59	7.83	11.16	6.63	11.21	10.61	21.75	11.15	16.31	5.62	5.76	3.73	8.10	43.83	46.68	30.81	13.86	10.15

ServiceNow Inc's activity ratios provide insight into the efficiency of the company's operation and management of its assets and liabilities.

Firstly, looking at the receivables turnover, it shows a generally consistent trend, with a slight dip in the last quarter of 2023. This indicates that the company is collecting its accounts receivable at a relatively steady pace, reflecting efficient credit and collection policies.

In terms of payables turnover, there is some fluctuation in the ratios, with a notable increase in the second quarter of 2023. This suggests that the company is taking longer to pay its suppliers, which could indicate a potential strain on relationships or a deliberate strategy to manage cash flow.

The working capital turnover ratio exhibits variations as well, with a substantial increase in the last two quarters of 2023. This may indicate that the company has been able to generate more sales relative to its working capital, signaling efficient use of its resources to generate revenue.

However, the lack of data for the inventory turnover ratio makes it difficult to assess how efficiently the company is managing its inventory.

Overall, ServiceNow Inc's activity ratios indicate effective management of receivables and a potential opportunity to optimize payables and working capital management. However, a more comprehensive analysis could be conducted with additional data and industry comparisons.

Average number of days

		Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019
Days of inventory on hand (DOH)	days	87.59	83.63	84.90	87.14	85.62	—	—	—	81.80	77.82	80.31	82.75	84.66	80.54	80.72	80.14	80.26	76.67	78.12	79.33
Days of sales outstanding (DSO)	days	82.84	50.31	49.76	53.13	86.90	47.37	47.17	48.07	86.06	51.21	55.13	48.71	81.53	54.58	58.34	60.41	88.11	61.07	61.01	54.92
Number of days of payables	days	23.94	13.84	36.20	50.68	63.58	46.46	65.27	42.61	24.03	18.58	30.86	37.43	12.57	20.44	36.08	32.39	24.28	29.99	33.76	21.21

Days of inventory on hand (DOH) is not available in the provided data, so we will focus on the Days of Sales Outstanding (DSO) and Number of Days of Payables.

The Days of Sales Outstanding (DSO) measures how long it takes for a company to collect revenue after a sale. It has shown some fluctuation over the past eight quarters, ranging from a low of 64.77 days in September 2022 to a high of 105.49 days in December 2022. The DSO decreased to 68.27 days in September 2023 from 105.49 days in December 2022, indicating an improvement in the collection of receivables.

The Number of Days of Payables represents how long it takes for a company to pay its suppliers. It also exhibited variability during the same period, with a low of 13.84 days in September 2023 and a high of 65.22 days in June 2022. The significant decrease in days of payables from 63.58 days in December 2022 to 13.84 days in September 2023 indicates a more efficient utilization of trade credit.

It is important to note that the trend for these activity ratios should be analyzed in conjunction with the company's industry and other financial metrics to gain a comprehensive understanding of ServiceNow Inc's operating efficiency and liquidity management.

Long-term

	Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019
Fixed asset turnover	6.61	7.07	6.98	6.82	6.88	7.57	7.53	7.84	7.70	7.47	7.06	6.97	6.85	7.48	7.23	7.89	7.39	8.04	8.27	8.01
Total asset turnover	0.52	0.56	0.54	0.56	0.54	0.62	0.59	0.57	0.55	0.58	0.56	0.55	0.52	0.55	0.61	0.60	0.57	0.68	0.65	0.64

ServiceNow Inc's long-term activity ratios provide insight into how efficiently the company uses its long-term assets to generate sales. The fixed asset turnover ratio, which measures the efficiency of the company's use of fixed assets in generating revenue, has shown consistent performance over the past eight quarters, ranging between 6.61 and 7.84. This indicates that the company has been successful in generating sales using its fixed assets, with a slight fluctuation in the efficiency over time.

Furthermore, the total asset turnover ratio, which indicates the company's ability to generate sales from its total assets, has also exhibited relative stability over the same period, with values ranging between 0.52 and 0.62. This suggests that the company has been able to effectively utilize its total assets to generate sales, with a modest variation in the efficiency levels.

Overall, ServiceNow Inc's long-term activity ratios reflect consistent and reasonable efficiency in utilizing both fixed and total assets to generate revenue over the analyzed period. However, the management should continuously monitor these ratios to ensure that the efficiency of asset utilization remains optimal and aligns with the company's strategic objectives.