Insulet Corporation (PODD)

Short-term

Turnover ratios

Insulet Corporation's activity ratios provide insights into the efficiency of its operations in managing its inventory, receivables, payables, and working capital.

1. Inventory Turnover:
- The inventory turnover ratio has been fluctuating over the past five years, ranging from 1.14 to 2.55.
- In 2023, the inventory turnover decreased to 1.33 from 1.44 in 2022, indicating a slight decrease in the efficiency of managing inventory levels.

2. Receivables Turnover:
- Insulet Corporation has displayed a consistent ability to collect receivables efficiently over the years, with the ratio ranging from 4.72 to 10.79.
- The receivables turnover ratio saw a decrease in 2023 to 4.72 from 6.35 in 2022, which may suggest a slight decrease in efficient collection efforts.

3. Payables Turnover:
- The payables turnover ratio has been volatile, ranging from 4.73 to 27.98.
- In 2023, there was a significant increase in the payables turnover to 27.98 from 16.22 in 2022, indicating a notable improvement in managing trade payables.

4. Working Capital Turnover:
- The working capital turnover ratio has fluctuated over the years, ranging from 0.87 to 1.70.
- In 2023, the working capital turnover increased to 1.50 from 1.38 in 2022, indicating improved efficiency in generating revenue relative to the working capital invested.

Overall, while Insulet Corporation has shown varying trends in its activity ratios over the years, there are opportunities for the company to further enhance its operational efficiency, particularly in managing inventory levels and receivables collection. Additionally, the significant improvement in payables turnover in 2023 reflects positive strides in managing trade payables effectively.

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Average number of days

Insulet Corporation's activity ratios reflect the efficiency of its operations in managing inventory, collecting receivables, and settling payables over the past five years.

1. Days of Inventory on Hand (DOH):
- The trend in DOH shows fluctuations over the years, ranging from a low of 142.94 days in 2019 to a high of 319.20 days in 2021.
- A high DOH indicates that Insulet is taking longer to sell its inventory, tying up capital in unsold goods.
- However, in recent years, the company has successfully reduced its DOH, which suggests improved inventory management efficiency.

2. Days of Sales Outstanding (DSO):
- Insulet's DSO has also shown variability, with the lowest DSO of 33.82 days in 2020 and the highest of 77.36 days in 2023.
- A lower DSO indicates that the company is collecting receivables more quickly, which can improve cash flow and liquidity.
- The recent increase in DSO in 2023 suggests a potential slowdown in collecting receivables compared to the previous year.

3. Number of Days of Payables:
- Insulet's payables days have fluctuated over the years, with a decreasing trend from 2019 to 2023.
- A lower number of days of payables may indicate that the company is paying its suppliers more quickly, potentially reflecting good relationships with suppliers or strong cash management practices.
- The decreasing trend in payables days may also imply that the company is utilizing its cash more efficiently to settle its obligations.

Overall, while Insulet Corporation has seen fluctuations in its activity ratios, the recent improvements in inventory management efficiency and payables days, along with generally stable receivables collection, indicate a potential enhancement in operational effectiveness and financial performance.

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Long-term

Insulet Corporation's long-term activity ratios, specifically the fixed asset turnover and total asset turnover, have shown a generally positive trend over the past five years. The fixed asset turnover has been consistently increasing from 1.85 in 2019 to 2.55 in 2023, indicating that the company is generating more revenue for each dollar invested in fixed assets. This suggests improved efficiency in utilizing its long-term assets to generate sales.

Similarly, the total asset turnover has also shown an upward trend, increasing from 0.65 in 2019 to 0.66 in 2023. This indicates that the company is generating more revenue relative to its total assets over the years. Although the total asset turnover ratio is generally lower than the fixed asset turnover ratio, the increasing trend implies that management is making effective use of both long-term and short-term assets to drive revenue growth.

Overall, the improving trends in both fixed asset and total asset turnover ratios suggest that Insulet Corporation is becoming more efficient in generating sales from its long-term assets, which is a positive sign for the company's operational performance and long-term sustainability.