OSI Systems Inc (OSIS)

Short-term

Turnover ratios

Inventory turnover ratio measures how quickly a company sells and replaces its inventory. OSI Systems Inc's inventory turnover has been relatively stable over the past five years, ranging from 3.04 to 4.25. This indicates that the company is managing its inventory efficiently, with a higher turnover generally being more favorable.

Receivables turnover ratio reflects how effectively a company is collecting its accounts receivable. OSI Systems Inc's receivables turnover has decreased over the years from 4.13 to 2.37, suggesting a decline in the efficiency of collecting receivables.

Payables turnover ratio shows how well a company manages its accounts payable by paying off its suppliers. OSI Systems Inc's payables turnover has fluctuated but generally remained at healthy levels, indicating that the company is efficient in paying its obligations.

Working capital turnover ratio measures how efficiently a company utilizes its working capital to generate sales. OSI Systems Inc's working capital turnover has shown variations over the years, with a notable peak in 2022. This suggests that the company's ability to generate sales from its working capital has been fluctuating.

In summary, OSI Systems Inc has maintained a stable inventory turnover, seen a decline in receivables turnover, managed payables efficiently, and had fluctuations in working capital turnover over the years. Each ratio provides insights into different aspects of the company's operational efficiency and working capital management.

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Average number of days

Based on the provided data for OSI Systems Inc's activity ratios:

1. Days of Inventory on Hand (DOH):
- The days of inventory on hand have been relatively stable over the past five years, ranging from 85.92 days in 2020 to 119.98 days in 2022.
- The increasing trend in DOH from 2020 to 2022 suggests that the company may be holding onto inventory for a longer period before it is sold.

2. Days of Sales Outstanding (DSO):
- The days of sales outstanding show fluctuations over the five-year period, with the highest DSO of 154.26 days in 2024.
- The significant increase in DSO in 2024 indicates that the company is taking longer to collect payments from its customers, which may need to be monitored closely for potential liquidity challenges.

3. Number of Days of Payables:
- The number of days of payables has also seen fluctuations, with an increasing trend from 2018 to 2023 before slightly decreasing in 2024.
- A higher number of days of payables suggests that the company is taking longer to pay its suppliers, potentially indicating better cash flow management but could also strain relationships if it continues to increase.

Overall, the analysis of OSI Systems Inc's activity ratios suggests that there are changes in the company's inventory management, accounts receivable collection, and accounts payable practices over the years. Monitoring these ratios can help in assessing the company's operational efficiency, working capital management, and potential financial risks.

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Long-term

The fixed asset turnover ratio for OSI Systems Inc has been steadily increasing over the past five years, indicating that the company has been generating more revenue relative to its investment in fixed assets. This is a positive sign of operational efficiency and effective utilization of long-term assets.

On the other hand, the total asset turnover ratio has shown a decreasing trend over the same period. While the ratio remains relatively low, it suggests that the company is generating less revenue for each dollar of total assets compared to previous years.

Overall, the increasing fixed asset turnover ratio coupled with the declining total asset turnover ratio may indicate that OSI Systems Inc is focusing on extracting more value from its fixed assets to drive sales, but there could be a need for improvements in the overall efficiency of asset utilization to boost profitability.