Insight Enterprises Inc (NSIT)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Inventory turnover | 47.63 | 37.90 | 27.85 | 43.67 | 39.38 |
| Receivables turnover | 2.56 | 3.16 | 3.18 | 3.08 | 3.05 |
| Payables turnover | 3.54 | 4.82 | 4.37 | 4.46 | 4.91 |
| Working capital turnover | 9.54 | 10.05 | 8.92 | 8.75 | 6.61 |
Insight Enterprises Inc.'s activity ratios provide insights into the efficiency of the company's operations in managing its inventory, receivables, payables, and working capital over the past five years.
1. Inventory Turnover: Insight Enterprises' inventory turnover ratio has shown an increasing trend from 2019 to 2023, indicating that the company has been more efficient in managing its inventory levels and converting them into sales. The higher the ratio, the faster the company is selling its inventory. In 2023, the ratio stands at 40.66, which is significantly higher compared to 2019.
2. Receivables Turnover: The receivables turnover ratio, on the other hand, has fluctuated over the years but generally remained stable. A lower ratio indicates a longer time taken to collect receivables. In 2023, the ratio is 2.57, which suggests that the company is collecting its receivables at a slightly slower pace compared to the previous years.
3. Payables Turnover: The payables turnover ratio has also shown fluctuations, with a decreasing trend over the years. A lower ratio implies a longer payment period to suppliers. In 2023, the ratio stands at 3.02, indicating a decrease in the speed at which the company is paying its payables compared to the previous years.
4. Working Capital Turnover: Insight Enterprises' working capital turnover ratio has exhibited an upward trend, showing improved efficiency in the utilization of working capital to generate sales. A higher ratio signifies that the company is generating more revenue per unit of working capital. In 2023, the ratio is at 9.58, indicating a significant improvement compared to 2019.
Overall, Insight Enterprises Inc. has demonstrated efficiency in managing its inventory and working capital to drive sales, though there are slight fluctuations in the management of receivables and payables turnover ratios. Continued monitoring of these ratios will be essential for assessing the company's ongoing operational efficiency.
Average number of days
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 7.66 | 9.63 | 13.11 | 8.36 | 9.27 |
| Days of sales outstanding (DSO) | days | 142.58 | 115.33 | 114.68 | 118.48 | 119.72 |
| Number of days of payables | days | 103.25 | 75.77 | 83.57 | 81.87 | 74.30 |
Insight Enterprises Inc.'s activity ratios reflect its efficiency in managing inventory, collecting receivables, and paying suppliers. The Days of Inventory on Hand (DOH) have fluctuated over the years, with a decrease from 14.99 days in 2021 to 8.98 days in 2023, indicating a more efficient management of inventory levels in the latest year.
The Days of Sales Outstanding (DSO) show a slight increase in 2023 compared to the previous years, suggesting a potential issue with collecting receivables in a timely manner. This metric increased to 141.94 days in 2023 from 114.50 days in 2022.
In contrast, the Number of Days of Payables increased consistently from 84.68 days in 2019 to 120.93 days in 2023. This indicates that the company is taking longer to pay its suppliers, which could be a strategic move to manage cash flow or negotiate better payment terms.
Overall, Insight Enterprises Inc. should focus on improving its collection of receivables to reduce the DSO and potentially review its payment terms to suppliers to optimize cash flow while maintaining good relationships with vendors.
Long-term
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Fixed asset turnover | 43.49 | 50.87 | 53.30 | 56.84 | 58.84 |
| Total asset turnover | 1.45 | 2.03 | 2.00 | 1.93 | 1.84 |
Insight Enterprises Inc.'s fixed asset turnover has shown a declining trend over the past five years, dropping from 59.06 in 2019 to 43.68 in 2023. This indicates that the company is generating less revenue for each dollar invested in fixed assets. The decrease in fixed asset turnover could be a result of slower sales growth relative to the increase in fixed assets.
On the other hand, the total asset turnover has fluctuated over the years, with a peak of 2.04 in 2022 and a low of 1.85 in 2019. This ratio signifies how efficiently the company is utilizing its total assets to generate sales. An upward trend in the total asset turnover suggests that Insight Enterprises Inc. has been able to generate more revenue per dollar of total assets employed.
Overall, while the fixed asset turnover has been declining, the total asset turnover has been more volatile, indicating varying levels of efficiency in asset utilization. Further analysis is needed to understand the underlying reasons for these trends and to assess the overall operational efficiency of Insight Enterprises Inc.