Penumbra Inc (PEN)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Inventory turnover | 0.97 | 0.93 | 1.03 | 1.01 | 1.15 |
| Receivables turnover | 5.25 | 4.17 | 5.58 | 4.89 | 5.17 |
| Payables turnover | 13.84 | 11.69 | 20.28 | 15.75 | 11.61 |
| Working capital turnover | 1.39 | 1.39 | 1.34 | 1.10 | 1.47 |
Inventory turnover measures how efficiently a company is managing its inventory. Penumbra Inc's inventory turnover has been fluctuating over the past five years, ranging from 0.93 to 1.15. The downward trend in inventory turnover from 2019 to 2022 indicates that the company may be struggling to sell its inventory quickly. However, there was a slight improvement in 2023, although it still remains below the levels of 2019 and 2021.
Receivables turnover indicates how well a company is collecting its receivables. Penumbra Inc's receivables turnover has also been variable, ranging from 4.17 to 5.58 over the same period. The increasing trend in receivables turnover from 2020 to 2021 suggests that the company has been improving its ability to collect payments from customers promptly.
Payables turnover shows how fast a company is paying its suppliers. Penumbra Inc's payables turnover has shown an up-and-down pattern, varying from 11.61 to 20.28. The inconsistency in payables turnover indicates that the company's payment practices to suppliers have been fluctuating.
Working capital turnover measures how effectively a company is utilizing its working capital to generate sales. Penumbra Inc's working capital turnover has ranged from 1.10 to 1.47. The higher values of the working capital turnover indicate that the company has been efficient in utilizing its working capital to generate sales.
In conclusion, Penumbra Inc's activity ratios, specifically inventory turnover, receivables turnover, payables turnover, and working capital turnover, show fluctuations over the past five years. The company may need to focus on improving inventory management and maintaining consistency in its payables turnover to enhance overall operational efficiency.
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 | 376.79 | 390.84 | 353.33 | 360.55 | 318.30 |
| Days of sales outstanding (DSO) | days | 69.57 | 87.63 | 65.39 | 74.64 | 70.61 |
| Number of days of payables | days | 26.37 | 31.22 | 18.00 | 23.17 | 31.44 |
Penumbra Inc's activity ratios provide insights into how efficiently the company manages its inventory, collects its receivables, and pays its payables.
1. Days of Inventory on Hand (DOH):
- The trend in Penumbra Inc's DOH shows an increase from 2019 to 2023, indicating that the company is holding inventory for a longer period.
- A higher DOH may suggest either slow inventory turnover or overstocking, which can tie up capital and increase holding costs.
- Penumbra Inc should aim to reduce its DOH by managing inventory levels more effectively and improving sales forecasting.
2. Days of Sales Outstanding (DSO):
- The DSO fluctuates over the years but generally shows variability in how quickly the company collects payment from its customers.
- A lower DSO indicates faster cash conversion and efficient credit management practices.
- Penumbra Inc should focus on reducing its DSO by tightening credit policies, following up on overdue accounts, and improving collection procedures.
3. Number of Days of Payables:
- Penumbra Inc's days of payables have shown fluctuations, with a significant increase from 2020 to 2021 and then a decrease in 2023.
- A higher number of days of payables indicates that the company is taking longer to pay its suppliers, possibly to improve cash flow.
- Penumbra Inc should strike a balance between maximizing the days of payables without deteriorating supplier relationships or facing potential supply chain disruptions.
Overall, by focusing on optimizing its inventory levels, accelerating receivables collection, and managing payables effectively, Penumbra Inc can enhance its working capital management and improve its overall liquidity position.
Long-term
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Fixed asset turnover | 14.56 | 13.03 | 12.70 | 11.63 | 10.57 |
| Total asset turnover | 0.68 | 0.62 | 0.60 | 0.68 | 0.82 |
Penumbra Inc's long-term activity ratios provide insights into how efficiently the company is utilizing its fixed assets and total assets to generate sales revenue. The fixed asset turnover ratio has been showing a consistent increasing trend over the past five years, indicating that Penumbra has been able to generate more sales revenue per dollar of fixed assets invested. This suggests improved efficiency in utilizing its long-term assets to drive sales.
On the other hand, the total asset turnover ratio has shown some fluctuations over the same period. While it decreased from 2019 to 2021, it rebounded in 2022 and then decreased again in 2023. This indicates that Penumbra's overall efficiency in generating sales from its total assets has been variable. However, the ratio remains below 1, suggesting that the company may have significant investments in assets that are not generating proportionate sales revenue.
In summary, Penumbra Inc has demonstrated increasing efficiency in utilizing its fixed assets to generate sales, as indicated by the rising fixed asset turnover ratio. However, the fluctuating total asset turnover ratio suggests that the company may need to focus on optimizing the utilization of its total assets to improve overall efficiency in generating sales revenue.