Palantir Technologies Inc. Class A Common Stock (PLTR)

Activity ratios

Short-term

Turnover ratios

	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Inventory turnover	—	25.15	9.27	9.46
Receivables turnover	6.10	7.38	8.08	6.96
Payables turnover	35.56	9.12	4.53	21.55
Working capital turnover	0.66	0.78	0.70	0.66

The activity ratios for Palantir Technologies Inc. Class A Common Stock provide insights into how efficiently the company is managing its inventory, receivables, payables, and working capital.

1. Inventory turnover:
- The inventory turnover ratio indicates how effectively the company is managing its inventory levels. In 2022, Palantir Technologies Inc. had an inventory turnover of 25.15, which means the company sold and replaced its inventory approximately 25.15 times during the year, showing a significant improvement compared to the previous years. This increase suggests that the company is managing its inventory more efficiently.

2. Receivables turnover:
- The receivables turnover ratio measures how quickly the company collects its accounts receivable. A higher ratio indicates a faster collection of receivables. Palantir Technologies Inc.'s receivables turnover has fluctuated over the years, with a peak in 2022 at 7.38. This suggests that the company was able to collect its receivables more quickly in 2022 compared to the other years.

3. Payables turnover:
- The payables turnover ratio reflects how quickly the company pays its suppliers. A higher payables turnover ratio indicates that the company is paying its suppliers more promptly. In 2023, Palantir Technologies Inc. had a notably high payables turnover of 35.56, indicating that the company was able to settle its payables very efficiently in that year.

4. Working capital turnover:
- The working capital turnover ratio shows how effectively the company is using its working capital to generate sales revenue. A higher ratio suggests better utilization of working capital. Palantir Technologies Inc.'s working capital turnover remained relatively stable over the years, hovering around 0.70. This indicates that the company has been able to efficiently generate revenue using its working capital.

In summary, Palantir Technologies Inc. has shown improvements in its inventory turnover and payables turnover ratios, indicating better management of inventory and supplier payments. The fluctuation in the receivables turnover ratio suggests some variability in the company's collection efficiency. The consistent working capital turnover ratio indicates steady utilization of working capital to generate sales.

Average number of days

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Days of inventory on hand (DOH)	days	—	14.51	39.39	38.60
Days of sales outstanding (DSO)	days	59.84	49.48	45.20	52.42
Number of days of payables	days	10.26	40.01	80.56	16.94

Days of Inventory on Hand (DOH) measures how many days, on average, inventory is held before being sold. For Palantir Technologies Inc., there was no data available for DOH in 2023. In 2022, the company improved its inventory management significantly, reducing the DOH to 14.51 days compared to 39.39 days in 2021 and 38.60 days in 2020. This indicates the company has become more efficient in managing its inventory levels, which could help lower storage costs and minimize obsolete inventory.

Days of Sales Outstanding (DSO) reveals how long it takes, on average, for the company to collect revenue after making a sale. In 2023, Palantir saw an increase in DSO to 59.84 days from 49.48 days in 2022, indicating a potential delay in collecting sales revenue. However, the DSO improved compared to 2021 (45.20 days) and 2020 (52.42 days). A higher DSO could signify issues with credit policies or challenges in collecting payments from customers promptly.

Number of Days of Payables indicates the average number of days it takes the company to pay its suppliers. Palantir Technologies Inc. significantly reduced its payables period to 10.26 days in 2023 from 40.01 days in 2022, 80.56 days in 2021, and 16.94 days in 2020. The decrease in the payables period suggests that the company has been paying its suppliers more quickly in 2023. This can either indicate improved relationships with suppliers or a shift in payment terms.

Long-term

	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Fixed asset turnover	46.59	27.55	49.26	36.99
Total asset turnover	0.49	0.55	0.47	0.41

The fixed asset turnover ratio measures how efficiently a company generates revenue from its fixed assets. Palantir Technologies Inc.'s fixed asset turnover has shown significant fluctuations over the past four years, with a high of 49.26 in 2021, indicating the company generated $49.26 in revenue for every $1 invested in fixed assets that year. The ratio decreased to 27.55 in 2022 and then increased sharply to 46.59 in 2023. This fluctuation suggests varying levels of effectiveness in utilizing fixed assets to generate sales over the years.

On the other hand, the total asset turnover ratio reflects the company's ability to generate revenue from all assets, including fixed and current assets. Palantir's total asset turnover has generally been low, with a consistent increase from 0.41 in 2020 to 0.49 in 2023. This indicates that the company is generating $0.49 in revenue for every $1 of assets owned in 2023. The rising trend in total asset turnover suggests an improvement in the efficiency of utilizing all assets to generate sales over the years.

In conclusion, Palantir Technologies Inc.'s fixed asset turnover has displayed significant fluctuations, while the total asset turnover has shown a positive upward trend. The company may need to focus on consistently optimizing the utilization of fixed assets to improve overall efficiency in generating revenue.