Pure Storage Inc (PSTG)

Short-term

Turnover ratios

Activity ratios provide insights into how effectively a company is managing its assets and liabilities to generate sales. Let's analyze the activity ratios of Pure Storage Inc based on the provided data:

1. Inventory turnover:
- Pure Storage Inc's inventory turnover has shown a generally increasing trend over the past five years, indicating that the company is selling its inventory more efficiently. This implies effective inventory management and a reduced risk of obsolete inventory.

2. Receivables turnover:
- The receivables turnover ratio has fluctuated slightly over the years but has remained relatively stable. A higher turnover ratio suggests that Pure Storage Inc is collecting its accounts receivables more quickly and efficiently, which is positive for cash flow management.

3. Payables turnover:
- The payables turnover ratio has also been fluctuating, but it generally shows that Pure Storage Inc is taking longer to pay its suppliers. A lower payables turnover ratio may indicate that the company is using its suppliers' financing effectively.

4. Working capital turnover:
- The working capital turnover ratio has fluctuated significantly over the years. A higher ratio suggests that Pure Storage Inc is efficiently using its working capital to generate sales revenue. However, the trend shows some variability in how effectively the company is utilizing its working capital.

Overall, analyzing these activity ratios provides valuable insights into Pure Storage Inc's operational efficiency, inventory management, receivables collection, and working capital utilization. Investors and analysts can use these ratios to further assess the company's performance and financial health.

---

Average number of days

Days of inventory on hand (DOH):
- The trend of Days of Inventory on Hand (DOH) for Pure Storage Inc has fluctuated over the past five years, ranging from 7.25 days to 11.06 days.
- In the most recent fiscal year, Pure Storage Inc had 7.25 days of inventory on hand, indicating that the company is able to efficiently manage its inventory levels and convert them into sales quickly.
- A decreasing trend in DOH generally signifies improved inventory management efficiency, which can lead to cost savings and better cash flow management for the company.

Days of sales outstanding (DSO):
- Pure Storage Inc's Days of Sales Outstanding (DSO) has shown variability over the past five years, with figures ranging from 81.58 days to 103.84 days.
- In the latest fiscal year, the company's DSO stood at 85.79 days, indicating that it takes approximately 85.79 days on average for Pure Storage Inc to collect its accounts receivable.
- A lower DSO is generally preferable as it suggests that the company is efficient in collecting payments from its customers and managing its accounts receivable effectively.

Number of days of payables:
- The trend of Number of Days of Payables for Pure Storage Inc has shown some fluctuations over the past five years, ranging from 11.79 days to 19.01 days.
- In the most recent fiscal year, the company had 14.06 days of payables, signifying that Pure Storage Inc takes approximately 14.06 days to pay off its suppliers.
- A longer payment period indicates that the company has more time to utilize cash before settling its payables, improving liquidity and cash flow management.

Overall, an analysis of Pure Storage Inc's activity ratios indicates that the company has been able to efficiently manage its inventory, collect receivables, and manage payables over the years, contributing to its overall operational efficiency.

---

Long-term

Pure Storage Inc has shown a consistent trend of efficiently utilizing its fixed assets to generate revenue over the past five years, as indicated by the fixed asset turnover ratio. Despite a slight decrease over the years, the company still maintains a relatively high fixed asset turnover ratio, implying that it generates approximately 7.99 to 13.13 times in sales for every dollar invested in fixed assets.

In contrast, the total asset turnover ratio reflects how effectively the company is utilizing all its assets to generate revenue. The trend exhibits stability with the ratio around 0.68 to 0.77, with no significant fluctuations over the years. This suggests that Pure Storage Inc has maintained a consistent level of revenue generation concerning its total assets.

Overall, Pure Storage Inc appears to be efficiently utilizing its fixed assets to generate revenue, while also maintaining a stable level of revenue generation concerning its total assets over the past five years. These ratios indicate that the company has a solid operational efficiency in utilizing its assets to drive sales.