ePlus inc (PLUS)

Short-term

Turnover ratios

Inventory turnover measures how efficiently a company manages its inventory. ePlus inc's inventory turnover has shown fluctuations over the past five years, with a significant decrease from 23.82 in 2020 to 6.37 in 2023, and then an increase to 11.99 in 2024. This indicates that the company has improved its inventory management efficiency in the most recent year.

Receivables turnover ratio reflects how quickly a company collects outstanding receivables. ePlus inc's receivables turnover has also fluctuated, with a slight decline from 4.24 in 2020 to 4.01 in 2021, followed by a gradual increase to 4.10 in 2023 and further to 3.45 in 2024. This indicates that the company has been able to collect its receivables more efficiently in the earlier years.

Payables turnover ratio measures how quickly a company pays its suppliers. ePlus inc's payables turnover has shown variability, with a significant decrease from 14.44 in 2020 to 7.11 in 2021, followed by fluctuations and ultimately reaching 5.30 in 2024. This suggests that the company has been extending its payment period to suppliers in the most recent year.

Working capital turnover ratio evaluates how effectively a company utilizes its working capital. ePlus inc's working capital turnover has declined consistently over the past five years, from 6.04 in 2020 to 3.61 in 2024. This indicates a decreasing trend in the efficiency of the company's working capital utilization.

In conclusion, ePlus inc's activity ratios have exhibited fluctuations and trends over the past five years, reflecting changes in the company's management of inventory, receivables, payables, and working capital. The company has shown improvements in inventory turnover and receivables turnover, while payables turnover and working capital turnover have demonstrated varying patterns. It is important for stakeholders to monitor these ratios to assess the company's operational efficiency and financial performance.

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Average number of days

The activity ratios of ePlus Inc provide insights into the efficiency of the company's operations in managing its inventory, receivables, and payables.

1. Days of Inventory on Hand (DOH): This ratio indicates how many days it takes for ePlus Inc to sell its inventory. A lower DOH is generally favorable as it suggests faster inventory turnover. ePlus Inc's DOH has fluctuated over the past five years, ranging from a low of 15.33 days in 2020 to a high of 57.28 days in 2023. The decrease in 2021 and 2020 indicates an improvement in inventory management efficiency.

2. Days of Sales Outstanding (DSO): DSO measures the average number of days it takes for ePlus Inc to collect payment after making a sale. A lower DSO is preferable as it indicates faster collection of receivables. ePlus Inc's DSO has shown some variability, with the highest value recorded in 2024 at 105.73 days. The increase in DSO from 2021 to 2024 suggests a potential slowdown in collection efficiency.

3. Number of Days of Payables: This ratio reflects the average number of days it takes for ePlus Inc to pay its suppliers. A higher number of days of payables can indicate that the company is taking longer to settle its payables, which may be beneficial for cash flow management. ePlus Inc's number of days of payables has increased over the years, reaching 68.81 days in 2024. This increase may indicate a strategy to extend payment terms with suppliers to preserve cash.

Overall, ePlus Inc's activity ratios show fluctuations over the years, indicating changes in the efficiency of the company's inventory management, collection of receivables, and payment of payables. Further analysis and comparison with industry benchmarks would be valuable to assess the company's performance in these areas.

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Long-term

ePlus inc's long-term activity ratios provide insights into how the company is utilizing its long-term assets to generate sales revenue.

1. Fixed asset turnover:
- The fixed asset turnover ratio measures the efficiency of a company in generating sales revenue from its investment in fixed assets.
- ePlus inc's fixed asset turnover has been relatively high and stable over the past five years, with values ranging from 172.04 to 230.19.
- This indicates that the company is efficiently using its fixed assets to generate sales, as higher turnover ratios suggest better utilization of assets.

2. Total asset turnover:
- The total asset turnover ratio reflects the company's ability to generate sales revenue from its total assets.
- ePlus inc's total asset turnover ratio has shown a declining trend from 1.75 in 2020 to 1.35 in 2024.
- A decreasing total asset turnover ratio may suggest that the company's sales are not keeping pace with the growth in its total assets, which could indicate inefficiencies in asset utilization.

In summary, while ePlus inc has been effectively utilizing its fixed assets to generate sales revenue, there is a decline in the overall efficiency of generating sales from its total assets. Further analysis of the company's operational and investment strategies may be required to understand the factors contributing to these trends.