Roivant Sciences Ltd (ROIV)

Short-term

Turnover ratios

Roivant Sciences Ltd's activity ratios provide insights into how efficiently the company manages its resources and operations:

1. Inventory Turnover:
- The inventory turnover has decreased significantly from 217.66 in 2023 to 19.50 in 2024, indicating that the company is selling its inventory at a slower rate in the most recent year.

2. Receivables Turnover:
- The receivables turnover has slightly improved from 1.10 in 2023 to 1.68 in 2024, suggesting that the company is collecting its receivables more efficiently.

3. Payables Turnover:
- The payables turnover has declined from 15.89 in 2023 to 12.92 in 2024, indicating that the company is taking longer to pay its suppliers in the most recent year.

4. Working Capital Turnover:
- The working capital turnover has decreased from 0.02 in both 2023 and 2022 to 0.01 in 2024, implying that the company is generating lower revenues relative to its working capital investment.

In summary, while Roivant Sciences Ltd has improved its receivables turnover, the decreasing inventory turnover and declining payables turnover suggest some inefficiencies in managing its inventory and payables. The lower working capital turnover also signals a potential decline in revenue generation efficiency relative to the company's working capital investment. Monitoring and managing these activity ratios can help Roivant Sciences Ltd enhance its operational efficiency and overall financial performance.

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Average number of days

Roivant Sciences Ltd's activity ratios indicate the efficiency of its operations in managing inventory, collecting receivables, and paying its suppliers.

The Days of Inventory on Hand (DOH) increased significantly from 1.68 days in 2023 to 18.72 days in 2024. This suggests that Roivant Sciences is carrying more inventory relative to its sales, which may indicate potential issues with managing inventory levels efficiently.

The Days of Sales Outstanding (DSO) decreased from 332.86 days in 2023 to 217.11 days in 2024. A decrease in DSO implies that Roivant Sciences is collecting receivables more quickly, which is a positive sign of efficient credit management and cash flow.

The Number of Days of Payables increased from 16.29 days in 2022 to 28.26 days in 2024. This indicates that Roivant Sciences is taking longer to pay its suppliers. While extending payables can improve cash flow, it could also strain relationships with suppliers if not managed effectively.

Overall, Roivant Sciences should focus on optimizing its inventory levels, maintaining efficient receivables collection, and managing payables effectively to enhance its operational efficiency and financial performance.

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Long-term

The fixed asset turnover ratio for Roivant Sciences Ltd has exhibited a significant improvement over the three-year period, increasing from 0.85 in 2023 to 4.72 in 2024. This suggests that the company has been able to generate a higher level of sales revenue relative to its investment in fixed assets, indicating improved efficiency in utilizing its long-term assets to generate revenue.

Conversely, the total asset turnover ratio has remained consistently low over the same period, at 0.01 in both 2023 and 2024, and slightly higher at 0.02 in 2022. This implies that Roivant Sciences Ltd is generating very minimal sales in relation to its total assets, which may indicate inefficiencies in the utilization of its overall asset base to generate revenue.

Overall, while the fixed asset turnover ratio portrays a positive trend, indicating improved efficiency in utilizing fixed assets to generate sales, the total asset turnover ratio remains low, suggesting that the company may need to optimize its overall asset management strategies to enhance revenue generation.