Paycom Soft (PAYC)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Inventory turnover | 239.00 | 199.78 | 132.38 | 143.14 | 107.34 |
| Receivables turnover | — | — | — | — | — |
| Payables turnover | — | — | — | — | — |
| Working capital turnover | 4.73 | 6.08 | 3.55 | 4.03 | 5.74 |
Based on the provided data for Paycom Soft, let's analyze the activity ratios:
1. Inventory Turnover: This ratio measures how many times a company's inventory is sold and replaced over a period. Paycom Soft's inventory turnover has shown a steady increase from 107.34 in 2020 to 239.00 in 2024. A higher inventory turnover ratio indicates that the company is efficiently managing its inventory levels and selling products quickly.
2. Receivables Turnover: Unfortunately, no data is available for this ratio for the years 2020 to 2024. The receivables turnover ratio would have provided insights into how quickly the company collects payments from its customers.
3. Payables Turnover: Similar to receivables turnover, data is not available for the payables turnover ratio for the years 2020 to 2024. The payables turnover ratio would have shown how quickly the company pays its suppliers.
4. Working Capital Turnover: This ratio evaluates how efficiently a company is utilizing its working capital to generate sales. Paycom Soft's working capital turnover has fluctuated, from 5.74 in 2020 to 4.73 in 2024. A higher working capital turnover ratio suggests that the company is effectively using its working capital to generate revenue.
Overall, the inventory turnover ratio indicates efficient management of inventory, while the working capital turnover ratio fluctuates but indicates reasonable utilization of working capital. However, the lack of data for receivables turnover and payables turnover limits a comprehensive analysis of the company's complete activity ratios.
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 | 1.53 | 1.83 | 2.76 | 2.55 | 3.40 |
| Days of sales outstanding (DSO) | days | — | — | — | — | — |
| Number of days of payables | days | — | — | — | — | — |
Based on the provided data, let's analyze the activity ratios of Paycom Soft:
1. Days of Inventory on Hand (DOH):
- The company's DOH has decreased from 3.40 days on December 31, 2020, to 1.53 days on December 31, 2024.
- A decreasing trend in DOH indicates that Paycom Soft is more efficient in managing its inventory levels and turning them into sales faster over the years.
- The company has significantly improved its inventory turnover rate, which could lead to lower holding costs and better cash flow management.
2. Days of Sales Outstanding (DSO):
- The data provided shows that DSO is not available for any of the years from 2020 to 2024.
- Without DSO information, it is challenging to assess the company's efficiency in collecting accounts receivable and managing credit sales.
- Paycom Soft may need to provide additional data on DSO to have a complete picture of its accounts receivable management.
3. Number of Days of Payables:
- Similar to DSO, the data for the Number of Days of Payables is not available for the years 2020 to 2024.
- Lack of information on payables turnover hinders the analysis of how long the company takes to pay its suppliers.
- Paycom Soft should consider disclosing more details on payables to evaluate its liquidity and vendor management practices effectively.
In conclusion, while the trend in Days of Inventory on Hand for Paycom Soft indicates improved efficiency in inventory management, the absence of data on Days of Sales Outstanding and Number of Days of Payables limits a comprehensive assessment of the company's overall activity ratios. Additional information is necessary to provide a complete analysis of Paycom Soft's working capital management and operational efficiency.
See also:
Long-term
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Fixed asset turnover | — | — | 3.42 | 3.02 | 2.95 |
| Total asset turnover | 0.32 | 0.40 | 0.35 | 0.33 | 0.32 |
The fixed asset turnover ratio measures how efficiently a company utilizes its fixed assets to generate sales. In the case of Paycom Soft, we observe a steady increase in the fixed asset turnover ratio over the years, from 2.95 in 2020 to 3.42 in 2022. This indicates that the company is becoming more efficient in generating revenue from its fixed assets.
On the other hand, the total asset turnover ratio reflects how effectively the company utilizes all its assets to generate sales. Paycom Soft's total asset turnover ratio shows an increasing trend from 0.32 in 2020 to 0.40 in 2023 before declining slightly to 0.32 in 2024. This suggests that the company is effectively utilizing its total assets to generate revenue, with a peak efficiency in 2023.
Overall, the upward trend in both the fixed asset turnover and total asset turnover ratios for Paycom Soft indicates improving operational efficiency and effectiveness in utilizing assets to drive sales growth over the years. However, the decline in the total asset turnover ratio in 2024 may warrant further investigation to understand the reasons behind this deviation.