ScanSource Inc (SCSC)

Short-term

Turnover ratios

The analysis of ScanSource Inc's activity ratios over the period from June 30, 2021, to June 30, 2025, provides insights into the company's operational efficiency and liquidity management.

Inventory Turnover: The company's inventory turnover ratio experienced a decline from 5.96 times in 2021 to a low of 4.41 times in 2023, indicating a slowdown in inventory sales relative to inventory levels. However, there was a subsequent recovery to 5.63 times in 2024, before a slight decrease to 5.44 times in 2025. The fluctuation suggests periods of slower inventory movement followed by improvements, reflecting shifts in sales performance or inventory management strategies.

Receivables Turnover: The receivables turnover ratio decreased from 5.54 times in 2021 to 4.55 times in 2023, implying a lengthening in the collection period for accounts receivable. This trend indicates a potential decline in collection efficiency or changes in credit policies. Nevertheless, the ratio increased again to 5.61 times in 2024, before decreasing to 4.78 times in 2025, signifying some recovery in receivables management but overall variability in collection performance.

Payables Turnover: The payables turnover ratio showed relative stability with minor fluctuations, starting at 4.41 times in 2021, slightly decreasing to 4.35 times in 2022, then increasing to 4.83 times in 2023, and reaching 4.91 times in 2024 before a slight decrease to 4.40 times in 2025. These changes reflect the company's payment practices with suppliers, suggesting periods of more aggressive payment cycles followed by moderation.

Working Capital Turnover: The ratio declined from 6.47 times in 2021 to 4.35 times in 2023, indicating a reduction in the efficiency of utilizing working capital to generate sales. The ratio remained relatively stable around 4.43 in 2024 and 4.42 in 2025, suggesting a plateau in working capital efficiency.

Overall, the activity ratios depict a pattern of variability with periods of declining efficiency in inventory management, receivables collection, and working capital utilization, followed by partial recoveries. These fluctuations may be associated with shifts in sales volume, inventory and credit policies, or broader economic conditions impacting operational dynamics.

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Average number of days

The analysis of ScanSource Inc.'s activity ratios over the period from June 30, 2021, to June 30, 2025, reveals insights into the company's operational efficiency and working capital management.

Days of Inventory on Hand (DOH):
The company's inventory holding period increased from approximately 61.28 days in 2021 to a peak of 82.83 days in 2023. This indicates a trend toward accumulating inventory more slowly after 2021, with a subsequent reduction to 64.80 days in 2024, and a slight increase to 67.09 days in 2025. The fluctuation suggests periods of inventory build-up followed by efforts to improve inventory turnover.

Days of Sales Outstanding (DSO):
The receivables collection period has shown a general increasing trend, rising from 65.91 days in 2021 to 80.30 days in 2023. This suggests that the company was taking longer to collect receivables during this period. Notably, DSO decreased to 65.11 days in 2024, indicating an improvement in receivables management, but then increased again to 76.28 days in 2025, signaling a possible slowdown in collection efficiency or changes in credit policy.

Number of Days of Payables:
The period ScanSource takes to pay its suppliers has varied, starting at 82.75 days in 2021, slightly increasing to 84.00 days in 2022, then decreasing to 75.56 days in 2023. The period remained relatively stable around the mid-70s in 2024 and increased again to 83.01 days in 2025. The fluctuations reflect adjustments in payment policies, possibly balancing maintaining supplier relationships with cash preservation.

Overall, the ratios indicate that during this timeframe, ScanSource's inventory and receivables periods experienced notable shifts, possibly reflecting strategic changes or market conditions influencing operational efficiency. The fluctuations in payables suggest variable management of supplier terms and working capital. Such trends warrant continual monitoring to assess impacts on liquidity and profitability.

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Long-term

The analysis of ScanSource Inc.'s long-term activity ratios reveals noteworthy trends over the three fiscal years ending June 30, 2023. The fixed asset turnover ratio experienced significant fluctuation, increasing markedly from 73.56 in 2021 to a peak of 94.19 in 2022, indicating an enhanced utilization of fixed assets to generate sales during this period. However, this ratio decreased to 75.88 in 2023, approaching the 2021 level, which may suggest a reduction in the efficiency of fixed asset utilization or changes in asset base composition.

Regarding the total asset turnover ratio, the company demonstrated stability with a slight decline over the same period, moving from 1.88 in 2021 to 1.82 in 2022, and remaining relatively unchanged at 1.83 in 2023. The ratio further decreased to 1.70 in 2025, signaling a potential reduction in overall asset efficiency in generating revenues.

Overall, the fixed asset turnover ratio's volatility suggests that asset deployment efficiency has fluctuated significantly, while the total asset turnover has remained relatively stable before experiencing a decline. These patterns reflect variations in asset management effectiveness and possibly strategic shifts affecting how assets are leveraged to support sales.