Palo Alto Networks Inc (PANW)

Activity ratios

Short-term

Turnover ratios

	Jul 31, 2025	Jul 31, 2024	Jul 31, 2023	Jul 31, 2022	Jul 31, 2021
Inventory turnover	—	—	5.63	—	—
Receivables turnover	2.51	2.40	2.42	2.57	3.43
Payables turnover	9.85	17.71	14.43	13.43	22.41
Working capital turnover	—	—	—	—	—

The activity ratios for Palo Alto Networks Inc., as of the provided data, reflect the company's operational efficiency over multiple fiscal years.

Inventory Turnover:
The inventory turnover data is only available for July 31, 2023, showing a ratio of 5.63. Prior to that date, data is unavailable or not reported. A ratio of 5.63 indicates that the company sold and replaced its inventory approximately 5.63 times during that year, suggesting a moderate level of inventory management efficiency. The absence of earlier figures limits trend analysis but implies current inventory activity is structured to balance sales and inventory holdings effectively.

Receivables Turnover:
This ratio exhibits a declining trend over three consecutive years. It decreased from 3.43 times in July 2021 to 2.57 in July 2022, and further to 2.42 in July 2023. Slight further decreases occur in subsequent years, with ratios of 2.40 in July 2024 and a slight increase to 2.51 in July 2025. The declining trend from 2021 to 2023 suggests that the company’s collection period for receivables has lengthened, potentially indicating a slight deterioration in credit policies or customer payment behavior. The stabilization and slight increase in later years may reflect efforts to improve receivables management or changes in credit terms.

Payables Turnover:
The payables turnover ratio shows marked fluctuation. It decreased from 22.41 times in July 2021 to 13.43 in July 2022, then increased to 14.43 in 2023, further rising to 17.71 in 2024, but then declining sharply to 9.85 in 2025. Higher ratios imply faster payment to suppliers, whereas lower ratios suggest extended payables. The trend indicates varying payment strategies, possibly influenced by cash flow considerations, supplier negotiations, or operational needs. The peak in 2024 suggests an intention to accelerate payments, while the drop in 2025 could indicate extended payment periods or liquidity constraints.

Working Capital Turnover:
Data for working capital turnover is not available across all the reported periods. As a result, no trend analysis or comprehensive assessment can be conducted for this ratio.

Summary:
Overall, Palo Alto Networks Inc. demonstrates moderate inventory activity as of 2023 with no earlier comparative data, indicating current inventory efficiency. The receivables turnover trend suggests a slight elongation in collection periods over three years, stabilizing somewhat in recent years. The payables turnover shows significant fluctuations, reflecting potentially strategic changes in payment timing or operational adjustments. The lack of data on working capital turnover precludes analysis of that metric. These activity ratios collectively provide insights into the company's operational efficiency, cash flow management, and credit policies, with some areas warranting closer monitoring for potential impacts on liquidity and working capital management.

Average number of days

		Jul 31, 2025	Jul 31, 2024	Jul 31, 2023	Jul 31, 2022	Jul 31, 2021
Days of inventory on hand (DOH)	days	—	—	64.83	—	—
Days of sales outstanding (DSO)	days	145.64	152.07	151.03	142.15	106.38
Number of days of payables	days	37.05	20.61	25.29	27.18	16.29

The activity ratios for Palo Alto Networks Inc., as derived from the provided data, indicate notable trends over the specified period.

Days of inventory on hand (DOH) were not available for the fiscal years ending July 31, 2021 and 2022, but data shows a significant increase to 64.83 days as of July 31, 2023. This suggests that the company has taken longer to sell its inventory during this period, potentially due to inventory buildup or changes in product demand or sales efficiency. Without data beyond 2023, it is not possible to determine if this trend persisted.

The days of sales outstanding (DSO) show an increasing trend over the period. From 106.38 days in 2021, DSO rose to 142.15 days in 2022 and further to 151.03 days in 2023. This indicates that the company has been taking longer to collect receivables, which could impact liquidity and working capital management. Slight stabilization is observed in 2024 with a marginal increase to 152.07 days, followed by a reduction to 145.64 days in 2025, suggesting some improvement in receivables collection efficiency.

Regarding the number of days of payables, the data depicts fluctuating paying behavior. The company’s payables period increased from 16.29 days in 2021 to 27.18 days in 2022, then slightly decreased to 25.29 days in 2023. A notable decrease occurred in 2024 to 20.61 days, followed by a substantial increase to 37.05 days in 2025. The longer period in 2025 indicates a more extended payment cycle, which could reflect negotiations for better payment terms, cash flow management strategies, or supplier relationships.

Overall, these activity ratios suggest a pattern of prolonged receivables collection and inventory holding periods, coupled with fluctuating payables. This profile might point towards deliberate operational strategies to manage working capital or underlying challenges in receivables and inventory turnover. Continuous monitoring would be necessary to determine whether these trends reflect strategic adjustments or potential liquidity concerns.

Long-term

	Jul 31, 2025	Jul 31, 2024	Jul 31, 2023	Jul 31, 2022	Jul 31, 2021
Fixed asset turnover	—	—	19.44	9.17	7.32
Total asset turnover	0.39	0.40	0.48	0.45	0.42

The analysis of Palo Alto Networks Inc’s long-term activity ratios reveals notable shifts in the efficiency of asset utilization over the specified period.

The Fixed Asset Turnover ratio, which measures revenue generated per dollar invested in fixed assets, experienced a substantial increase from 7.32 in July 2021 to 9.17 in July 2022, indicating improved asset utilization. This upward trend continued sharply into July 2023, culminating in a ratio of 19.44, suggesting a significant enhancement in how effectively the company leverages its fixed assets to generate sales. The absence of data for subsequent periods precludes assessment beyond 2023, but the observed trend up to that point reflects a remarkable efficiency gain in fixed asset management.

The Total Asset Turnover ratio, which assesses overall efficiency in using total assets to produce revenue, displayed a steady but less dramatic upward movement from 0.42 in 2021 to 0.45 in 2022 and slightly to 0.48 in 2023. However, this ratio reversed slightly afterward, declining to 0.40 in 2024 and further to 0.39 in 2025. This indicates that after a brief period of improved efficiency, the overall utilization of total assets to generate revenue has somewhat diminished in the subsequent years.

Overall, the data suggest that Palo Alto Networks has significantly improved its fixed asset efficiency over this period, especially by 2023. Meanwhile, its total asset efficiency saw a modest initial improvement followed by a decline, implying possible shifts in asset management strategies or underlying operational factors affecting how effectively total assets are employed to generate revenue.