Paycom Soft (PAYC)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Inventory turnover | 199.78 | 132.38 | 143.14 | 107.34 | 94.77 |
| Receivables turnover | 48.53 | 48.35 | 40.71 | 42.88 | 55.21 |
| Payables turnover | 19.91 | 13.25 | 28.05 | 18.20 | 21.73 |
| Working capital turnover | 6.06 | 3.55 | 4.03 | 5.73 | 6.25 |
Paycom Software Inc's inventory turnover has shown a consistent improvement over the past five years, with a significant increase from 77.15 in 2019 to 161.75 in 2023. This indicates that the company is managing its inventory more effectively and efficiently, selling its inventory more quickly.
The receivables turnover ratio has remained relatively stable over the period, ranging from 40.75 in 2021 to 55.39 in 2019. This suggests that the company is efficient in collecting its receivables, maintaining a consistent level of effectiveness in managing its accounts receivable turnover.
In terms of payables turnover, there is variability in the ratio, with a peak at 22.60 in 2021 and a low of 10.58 in 2022. This may imply fluctuations in the company's payment terms with its suppliers or changes in its purchasing strategies over the years.
The working capital turnover ratio reflects the efficiency of Paycom Software Inc in generating revenue relative to its working capital. The ratio has shown some fluctuations but has generally trended upwards, indicating the company's ability to generate revenue more efficiently with the capital available.
Overall, Paycom Software Inc has demonstrated strong efficiency in managing its inventory and receivables turnover, while the payables turnover ratio has shown some variability. The working capital turnover ratio suggests that the company has been improving its ability to generate revenue relative to its working capital over the years.
Average number of days
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 1.83 | 2.76 | 2.55 | 3.40 | 3.85 |
| Days of sales outstanding (DSO) | days | 7.52 | 7.55 | 8.97 | 8.51 | 6.61 |
| Number of days of payables | days | 18.33 | 27.54 | 13.01 | 20.05 | 16.80 |
Paycom Software Inc's activity ratios provide valuable insights into the efficiency of its operations.
1. Days of Inventory on Hand (DOH):
- The DOH has shown a decreasing trend over the past five years, indicating that the company has been managing its inventory more efficiently.
- In 2023, the company held inventory for an average of 2.26 days, which is significantly lower compared to 2019 when it was 4.73 days.
- A lower DOH suggests that Paycom Software is able to quickly turn its inventory into sales, reducing the risk of obsolete inventory and improving cash flow.
2. Days of Sales Outstanding (DSO):
- The DSO ratio measures how quickly the company collects its accounts receivable.
- Paycom Software's DSO has fluctuated over the years, ranging from 6.59 days in 2019 to 8.96 days in 2021.
- In 2023, the DSO was 7.51 days, indicating that the company is collecting its receivables at a reasonable pace.
3. Number of Days of Payables:
- The number of days of payables represents how long it takes the company to pay its suppliers.
- Paycom Software has shown variability in its payables days, with the lowest at 16.15 days in 2021 and the highest at 34.51 days in 2022.
- In 2023, the number of days of payables was 22.64 days, suggesting that the company has a moderate timeframe for paying its suppliers.
Overall, these activity ratios demonstrate that Paycom Software Inc has been improving its inventory management, maintaining stable collection practices, and managing its payables effectively over the years, which contributes to its operational efficiency.
See also:
Long-term
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Fixed asset turnover | 3.39 | 3.42 | 3.02 | 2.94 | 3.08 |
| Total asset turnover | 0.40 | 0.35 | 0.33 | 0.32 | 0.30 |
The fixed asset turnover ratio measures how efficiently a company utilizes its fixed assets to generate sales. Paycom Software Inc has maintained relatively stable fixed asset turnover ratios over the past five years, ranging from 2.95 to 3.42 times. This indicates that the company has been effectively using its fixed assets to generate revenue.
On the other hand, the total asset turnover ratio reflects the company's ability to generate sales from its total assets. Paycom Software Inc's total asset turnover has shown an increasing trend over the years, from 0.30 to 0.40. This suggests that the company has been improving its efficiency in using its total assets to generate revenue.
Overall, both the fixed asset turnover and total asset turnover ratios of Paycom Software Inc demonstrate efficient asset utilization and effectiveness in generating sales over the years. These ratios indicate that the company's management is effectively managing its assets to drive revenue growth.