Insperity Inc (NSP)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Inventory turnover | — | — | 4.55 | 3.90 | 3.57 |
| Receivables turnover | 7.94 | 9.31 | 9.51 | 9.67 | 10.90 |
| Payables turnover | 35.30 | 27.69 | 36.21 | 35.40 | 32.04 |
| Working capital turnover | 42.46 | 40.62 | 37.38 | 42.70 | 24.83 |
Insperity Inc's activity ratios indicate how efficiently the company manages its assets and liabilities to generate sales.
1. Inventory Turnover: The inventory turnover ratio measures the number of times inventory is sold and replaced over a period. Insperity Inc's inventory turnover has been increasing steadily from 3.57 in 2020 to 4.55 in 2022, indicating that the company is managing its inventory more efficiently. However, data for 2023 and 2024 is not available for a complete trend analysis.
2. Receivables Turnover: The receivables turnover ratio reflects how quickly the company collects payments from customers. Insperity Inc's receivables turnover decreased from 10.90 in 2020 to 7.94 in 2024. This decline may suggest potential issues with collecting payments promptly or changes in the company's credit policies.
3. Payables Turnover: The payables turnover ratio shows how fast the company pays its suppliers. Insperity Inc's payables turnover improved from 32.04 in 2020 to 35.30 in 2024, indicating that the company is managing its payables more effectively, likely negotiating better credit terms with suppliers.
4. Working Capital Turnover: The working capital turnover ratio indicates how efficiently working capital is utilized to generate sales. Insperity Inc's working capital turnover fluctuated over the years, showing an increase from 24.83 in 2020 to 42.46 in 2024. This suggests an improvement in the company's ability to generate sales relative to the capital invested in its operations.
In conclusion, while Insperity Inc has shown improvements in managing its inventory and payables turnover, there are concerns regarding the decline in receivables turnover. The working capital turnover ratio has shown improvement, indicating better utilization of resources. Overall, the company should continue to focus on optimizing its working capital management and monitoring its receivables collection efficiency to sustain its operational efficiency.
Average number of days
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | — | — | 80.16 | 93.61 | 102.27 |
| Days of sales outstanding (DSO) | days | 45.98 | 39.22 | 38.37 | 37.73 | 33.50 |
| Number of days of payables | days | 10.34 | 13.18 | 10.08 | 10.31 | 11.39 |
Insperity Inc's activity ratios provide insights into the efficiency of the company's operations.
1. Days of Inventory on Hand (DOH): The trend in Insperity Inc's DOH shows a decreasing pattern from 102.27 days in December 2020 to 80.16 days in December 2022. A lower DOH value indicates that the company is managing its inventory efficiently, which may lead to cost savings and improved cash flow. However, the absence of data for 2023 and 2024 hinders a complete analysis of inventory management.
2. Days of Sales Outstanding (DSO): The DSO for Insperity Inc has been increasing over the years, from 33.50 days in December 2020 to 45.98 days in December 2024. A higher DSO suggests that the company is taking longer to collect payments from its customers, which could potentially lead to cash flow challenges. Insperity Inc may need to review its credit policies or collections processes to improve this ratio.
3. Number of Days of Payables: Insperity Inc has shown varying numbers of days of payables, with a decrease from 11.39 days in December 2020 to 10.08 days in December 2022, followed by a slight increase to 10.34 days in December 2024. A lower number of days of payables indicates that the company is paying its suppliers more quickly. While this may be beneficial for maintaining good relationships with suppliers, it could also impact liquidity if not managed effectively.
Overall, Insperity Inc's activity ratios suggest that the company may be efficiently managing its inventory but facing challenges in collecting receivables promptly. It is essential for the company to strike a balance between managing inventory levels, collecting payments from customers, and handling payables to optimize its working capital and overall financial performance.
Long-term
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Fixed asset turnover | 34.28 | 32.79 | 29.62 | 23.56 | 19.79 |
| Total asset turnover | 2.53 | 3.05 | 2.91 | 2.83 | 2.70 |
Insperity Inc's long-term activity ratios provide insight into how efficiently the company is utilizing its assets to generate revenue over time.
1. Fixed Asset Turnover:
- The fixed asset turnover ratio measures how effectively a company is generating revenue from its investments in fixed assets such as property, plant, and equipment.
- Insperity Inc's fixed asset turnover has been consistently increasing from 19.79 in 2020 to 34.28 in 2024. This indicates that the company is generating more revenue per dollar invested in fixed assets over the years, reflecting improved efficiency in utilizing its long-term assets.
2. Total Asset Turnover:
- The total asset turnover ratio evaluates the company's ability to generate sales from all its assets, including both fixed and current assets.
- Insperity Inc's total asset turnover ratio has shown some fluctuations but overall an increasing trend from 2.70 in 2020 to 3.05 in 2023, before dropping to 2.53 in 2024. This suggests that the company has been effectively using its assets to generate sales, but the decline in 2024 may indicate a need to reassess asset utilization strategies.
In conclusion, the analysis of Insperity Inc's long-term activity ratios reveals a positive trend in efficiently utilizing fixed assets to generate revenue over time, while the total asset turnover ratio has shown fluctuations but generally indicates effective asset utilization, albeit with a slight drop in 2024. This analysis highlights the company's ability to generate sales from its investments in both fixed and current assets.