ScanSource Inc (SCSC)
Activity ratios
Short-term
Turnover ratios
| Jun 30, 2024 | Jun 30, 2023 | Jun 30, 2022 | Jun 30, 2021 | Jun 30, 2020 | |
|---|---|---|---|---|---|
| Inventory turnover | 6.18 | 4.82 | 5.54 | 6.57 | 6.83 |
| Receivables turnover | 4.87 | 4.56 | 4.40 | 4.89 | 6.08 |
| Payables turnover | 5.39 | 5.29 | 4.77 | 4.87 | 6.84 |
| Working capital turnover | 4.45 | 4.33 | 4.96 | 6.46 | 6.26 |
ScanSource Inc's activity ratios provide insights into how efficiently the company is managing its operations.
1. Inventory turnover: ScanSource's inventory turnover has fluctuated over the years but generally remains at a moderate level. A higher turnover indicates that the company is effectively managing its inventory levels and selling products quickly. The improvement in 2024 compared to the previous years suggests better inventory management.
2. Receivables turnover: The receivables turnover ratio indicates how quickly the company is collecting payments from customers. ScanSource's receivables turnover has remained relatively stable over the years, with a slight decrease in 2024. The company seems to have balanced credit policies, ensuring timely collections from customers.
3. Payables turnover: ScanSource's payables turnover ratio shows how quickly the company is paying its suppliers. The company has maintained a consistent payables turnover ratio, indicating efficient management of payables. A higher turnover ratio suggests that ScanSource is paying its suppliers promptly.
4. Working capital turnover: The working capital turnover ratio measures how efficiently the company is using its working capital to generate sales. ScanSource's working capital turnover has decreased in 2024 compared to the previous years but remains at a reasonable level. A higher ratio indicates better utilization of working capital to generate revenue.
Overall, ScanSource Inc's activity ratios reflect a decent level of efficiency in managing its inventory, receivables, payables, and working capital. The company's ability to maintain stable turnover ratios demonstrates its effective working capital management and operational efficiency over the years.
Average number of days
| Jun 30, 2024 | Jun 30, 2023 | Jun 30, 2022 | Jun 30, 2021 | Jun 30, 2020 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 59.02 | 75.70 | 65.83 | 55.52 | 53.42 |
| Days of sales outstanding (DSO) | days | 74.96 | 80.04 | 82.88 | 74.57 | 60.07 |
| Number of days of payables | days | 67.69 | 69.06 | 76.47 | 74.98 | 53.34 |
Activity ratios provide valuable insights into how efficiently a company is managing its assets and operations. Let's analyze the activity ratios of ScanSource Inc based on the provided data for the last five years.
1. Days of Inventory on Hand (DOH):
- The trend shows some fluctuations in the DOH over the years. It decreased from 75.70 days in 2023 to 59.02 days in 2024, indicating a more efficient management of inventory in the latest year.
- However, the DOH in 2024 is still higher compared to 2020 and 2021, suggesting that ScanSource Inc might be holding more inventory relative to its sales in the latest year.
2. Days of Sales Outstanding (DSO):
- The DSO has also shown variability over the years. It increased from 60.07 days in 2020 to 82.88 days in 2022 before decreasing to 74.96 days in 2024.
- A higher DSO indicates a longer time taken by the company to collect its accounts receivable, which may impact its cash flow and liquidity.
3. Number of Days of Payables:
- The number of days of payables has fluctuated over the years, with 2020 showing a lower value of 53.34 days compared to 76.47 days in 2022.
- A higher number of days of payables suggests that ScanSource Inc is taking longer to pay its creditors, which could be beneficial for cash management but may strain relationships with suppliers if stretched too far.
Overall, a closer analysis of these activity ratios indicates that while there have been fluctuations over the years, ScanSource Inc should focus on optimizing its inventory levels, improving its accounts receivable collection process, and maintaining a balance in managing its payables to enhance its operational efficiency and financial performance.
Long-term
| Jun 30, 2024 | Jun 30, 2023 | Jun 30, 2022 | Jun 30, 2021 | Jun 30, 2020 | |
|---|---|---|---|---|---|
| Fixed asset turnover | 97.66 | 100.75 | 93.96 | 73.37 | 54.55 |
| Total asset turnover | 1.84 | 1.82 | 1.82 | 1.88 | 1.79 |
The fixed asset turnover ratio for ScanSource Inc has shown a positive trend over the past five years, increasing from 54.55 in 2020 to 97.66 in 2024. This indicates that the company is generating more revenue relative to its investment in fixed assets, reflecting efficient utilization of these assets to generate sales.
On the other hand, the total asset turnover ratio has fluctuated slightly over the same period, ranging from 1.79 in 2020 to 1.88 in 2021, before settling at 1.84 in 2024. This ratio measures the company's overall ability to generate sales from all its assets, including both fixed and current assets.
While the fixed asset turnover ratio emphasizes the efficiency of utilizing fixed assets, the total asset turnover ratio provides a broader perspective on the company's overall asset management efficiency. The improvements in both ratios indicate that ScanSource Inc has been effective in optimizing its asset utilization to generate revenue, which is a positive sign for its long-term operational performance.