Regeneron Pharmaceuticals Inc (REGN)

Activity ratios

Short-term

Turnover ratios

	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Inventory turnover	1.10	0.99	1.18	0.73	1.36
Receivables turnover	2.30	2.27	2.65	2.71	3.32
Payables turnover	4.68	4.05	4.07	2.94	4.60
Working capital turnover	0.81	0.95	1.59	1.19	1.40

Activity ratios are used to measure how efficiently a company manages its assets and liabilities. Let's analyze the activity ratios of Regeneron Pharmaceuticals, Inc. based on the provided data:

1. Inventory turnover:
The inventory turnover ratio indicates how many times a company sells and replaces its inventory within a given period. Regeneron's inventory turnover has fluctuated over the past five years, with a significant decrease from 0.91 in 2021 to 0.36 in 2023. This suggests that the company is managing its inventory less efficiently compared to previous years.

2. Receivables turnover:
The receivables turnover ratio measures how efficiently a company collects on its credit sales. Regeneron's receivables turnover has been relatively stable over the years, indicating consistent performance in collecting receivables from customers.

3. Payables turnover:
The payables turnover ratio reflects how effectively a company pays its suppliers. Regeneron's payables turnover has varied significantly, with a sharp increase in 2021 followed by a moderate decline in subsequent years. This may indicate changes in the company's payment policies or supplier relationships.

4. Working capital turnover:
The working capital turnover ratio evaluates how well a company utilizes its working capital to generate sales revenue. Regeneron's working capital turnover has shown a general downward trend over the years, suggesting a decrease in the efficiency of using working capital to drive sales.

Overall, Regeneron Pharmaceuticals, Inc. should closely monitor its inventory management practices to improve efficiency, maintain its consistent performance in collecting receivables, assess its payables management strategies for optimal vendor relationships, and consider ways to enhance the utilization of working capital to generate sales revenue.

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	331.61	366.96	310.15	499.83	268.67
Days of sales outstanding (DSO)	days	158.58	160.56	137.58	134.56	110.00
Number of days of payables	days	77.95	90.02	89.64	124.01	79.36

Regeneron Pharmaceuticals, Inc.'s activity ratios provide insights into the efficiency of the company's management of inventory, receivables, and payables.

1. Days of Inventory on Hand (DOH):
- In 2023, the DOH increased to 1,010.50 days from 1,095.87 days in 2022, indicating a decrease in the efficiency of managing inventory compared to the previous year.
- The significant decrease in DOH from 2022 to 2021 (from 1,095.87 days to 401.68 days) suggests an improvement in inventory turnover efficiency.
- However, the substantial increase in DOH in 2020 (1,422.16 days) and 2019 (1,426.05 days) indicates a prolonged period of holding inventory, which may tie up resources.

2. Days of Sales Outstanding (DSO):
- The DSO shows the average number of days it takes for the company to collect payment from its customers.
- Regeneron's DSO increased slightly in 2023 (157.70 days) compared to 2022 (159.78 days), indicating a slight delay in collecting receivables.
- The DSO was lower in 2021 (137.09 days) compared to 2020 (176.75 days), suggesting improved efficiency in collecting receivables.
- In 2019, the DSO was the lowest at 124.04 days, reflecting a historically efficient collection process.

3. Number of Days of Payables:
- The number of days of payables represents how long the company takes to pay its suppliers.
- Regeneron's number of days of payables increased in 2023 (237.54 days) compared to 2022 (268.82 days), indicating a slower payment to suppliers.
- The company increased its payment period from 2019 (421.22 days) to 2020 (352.83 days), suggesting a deliberate extension in payable days for cash management.
- In 2021, the number of days of payables was the lowest at 116.10 days, indicating a relatively quicker payment to suppliers that year.

Overall, Regeneron Pharmaceuticals, Inc.'s activity ratios show fluctuations in the efficiency of managing inventory, collecting receivables, and paying suppliers over the years. These ratios can help assess the effectiveness of the company's working capital management and operational performance.

Long-term

	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Fixed asset turnover	3.68	3.85	4.60	2.62	2.71
Total asset turnover	0.39	0.41	0.63	0.49	0.53

The fixed asset turnover ratio for Regeneron Pharmaceuticals, Inc. has exhibited some variation over the past five years, ranging from 2.64 to 4.62. This ratio measures how efficiently the company is utilizing its fixed assets to generate revenue, with a higher ratio indicating better utilization. The decreasing trend from 2019 to 2020 was followed by an increase in 2021, suggesting improved efficiency in utilizing fixed assets, which then slightly declined in 2023 when compared to the previous year.

On the other hand, the total asset turnover ratio, which indicates the company's overall efficiency in generating sales from all its assets, has also been fluctuating over the same period, ranging from 0.40 to 0.63. A lower total asset turnover ratio implies that the company is less efficient in utilizing its assets to generate sales. The trend shows some volatility, with a significant increase in 2021 compared to 2020, which was followed by a slight decline in 2023.

Overall, the fixed asset turnover demonstrates the company's efficiency in utilizing its fixed assets to generate revenue, while the total asset turnover provides insights into the overall asset efficiency in generating sales. These ratios can help stakeholders assess the company's operational performance and asset utilization efficiency over time.