Insperity Inc (NSP)

Short-term

Turnover ratios

Inventory Turnover Ratio:

- The inventory turnover ratio measures how efficiently a company is managing its inventory by showing how many times a company's inventory is sold and replaced over a specific period.
- Insperity Inc's inventory turnover has fluctuated over the reporting periods, ranging from a low of 1.88 to a high of 4.73.
- The company saw a significant increase in inventory turnover from December 31, 2022, to June 30, 2023, indicating a potential improvement in inventory management efficiency.
- However, the ratio dropped to 2.42 by June 30, 2024, and data was not available for the subsequent periods, suggesting potential issues with inventory turnover that need to be monitored closely.

Receivables Turnover Ratio:

- The receivables turnover ratio measures how effective a company is at extending credit and collecting debts.
- Insperity Inc's receivables turnover ratio has shown variability over the reporting periods, with a striking anomaly of 540.31 reported on June 30, 2023.
- Such a large spike in receivables turnover may indicate a data entry error or a unique circumstance that requires further investigation for accuracy and interpretation.
- The company experienced fluctuations in the ratio, with values ranging from 7.60 to 10.26, pointing to possible changes in credit policy or collection practices.

Payables Turnover Ratio:

- The payables turnover ratio assesses how efficiently a company is managing its accounts payable by showing how quickly it pays its suppliers.
- Insperity Inc's payables turnover ratio has ranged from 27.69 to 56.39 over the reporting periods.
- The company demonstrated consistent payment cycles with some variability, with periods of both longer and shorter payment durations.
- The ratio spiked to 52.68 on March 31, 2024, which may imply a shift in the company's payment practices that should be examined for underlying reasons.

Working Capital Turnover Ratio:

- The working capital turnover ratio measures how effectively a company is utilizing its working capital to generate sales revenue.
- Insperity Inc's working capital turnover ratio has displayed variation, ranging from 19.00 to 42.70.
- The company experienced fluctuations in working capital efficiency, indicating changes in how effectively working capital was being employed to generate revenue.
- The significant increase in the ratio from December 31, 2021, to March 31, 2022, may suggest improved utilization of working capital to drive sales.

In summary, analyzing these activity ratios provides insights into how Insperity Inc manages its inventory, receivables, payables, and working capital turnover, highlighting areas where the company may need to focus on improving operational efficiency and cash flow management.

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Average number of days

Insperity Inc's activity ratios provide insights into how efficiently the company manages its working capital and operations.

1. Days of Inventory on Hand (DOH): This ratio indicates the number of days it takes for the company to sell its inventory. Insperity's DOH fluctuated over the analyzed periods, ranging from a high of 193.99 days to a low of 77.20 days. A decreasing trend in DOH suggests an improvement in inventory management efficiency, as seen towards the end of the period.

2. Days of Sales Outstanding (DSO): DSO reflects the average number of days it takes for Insperity to collect its accounts receivable. The company's DSO varied from a low of 0.68 days to a high of 48.02 days. A lower DSO is desirable as it indicates faster collection of receivables. Insperity's DSO showed fluctuations but generally remained at manageable levels.

3. Number of Days of Payables: This ratio represents how long it takes for Insperity to pay its suppliers. The company's payables days ranged from 5.19 days to 13.18 days. A higher number of days of payables can indicate favorable credit terms with suppliers, while a lower number may signify quick payment to vendors. Insperity's payables days appeared relatively consistent, indicating a stable approach to managing payables.

Overall, while the activity ratios of Insperity Inc showed fluctuations over the analyzed periods, the company generally maintained reasonable levels of efficiency in managing inventory, receivables, and payables. Continued monitoring of these ratios will be crucial for assessing the company's operational performance and working capital management in the future.

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Long-term

The fixed asset turnover ratio for Insperity Inc has shown a consistent increasing trend over the past few years, from 27.36 in March 2020 to 34.28 in December 2024. This indicates that the company has been able to generate more sales revenue from its fixed assets over time, reflecting operational efficiency and effective utilization of its long-term assets.

On the other hand, the total asset turnover ratio has displayed some fluctuations during the same period, with a peak of 3.37 in September 2024 and a low of 2.45 in March 2021. Despite the fluctuations, the trend has generally been positive, suggesting that the company has improved its ability to generate sales from its total assets.

Overall, the increasing fixed asset turnover ratio combined with the fluctuating but generally improving total asset turnover ratio indicates that Insperity Inc has been effective in managing and leveraging both its fixed and total assets to generate sales, highlighting the company's operational efficiency and resource utilization.