Simulations Plus Inc (SLP)

Short-term

Turnover ratios

The activity ratios of Simulations Plus Inc provide insights into the efficiency of the company's operations over the past five years.

1. Inventory Turnover:
- The inventory turnover ratio has shown a consistent improvement over the years, increasing from 10.98 in 2020 to 26.16 in 2024.
- This indicates that the company has been able to sell its inventory more frequently in recent years, which is positive for minimizing carrying costs and managing working capital efficiently.

2. Receivables Turnover:
- The receivables turnover ratio has also improved steadily, rising from 5.60 in 2020 to 8.18 in 2024.
- This suggests that Simulations Plus has been successful in collecting its accounts receivable faster, which enhances cash flow and liquidity.

3. Payables Turnover:
- The payables turnover ratio has shown a notable increase from 30.34 in 2020 to 95.48 in 2024.
- This indicates that the company is paying its suppliers more quickly, which could reflect strong vendor relationships or improved cash management practices.

4. Working Capital Turnover:
- The working capital turnover ratio has exhibited substantial growth over the years, escalating from 0.34 in 2020 to 2.74 in 2024.
- This metric shows how efficiently the company is utilizing its working capital to generate sales, with the increasing trend signaling improved operational efficiency and productivity.

In summary, the activity ratios of Simulations Plus Inc demonstrate a positive trajectory in terms of managing inventory, receivables, payables, and working capital, showcasing improvements in operational efficiency and financial performance over the analyzed period.

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Average number of days

The activity ratios of Simulations Plus Inc, as reflected by its Days of Inventory on Hand (DOH), Days of Sales Outstanding (DSO), and Number of Days of Payables, have shown trends over the past five fiscal years.

1. Days of Inventory on Hand:
- The company has been able to efficiently manage its inventory over the years, as the Days of Inventory on Hand have decreased significantly from 46.92 days in 2022 to 13.95 days in 2024.
- A lower DOH indicates that the company is selling its inventory more quickly, which can be a positive sign for profitability and cash flow.

2. Days of Sales Outstanding:
- The Days of Sales Outstanding have fluctuated over the years, with a downward trend observed from 93.35 days in 2022 to 44.60 days in 2024.
- A decreasing DSO indicates that the company is collecting its accounts receivable more efficiently, improving its liquidity position.

3. Number of Days of Payables:
- The Number of Days of Payables has remained relatively stable over the years, with a slight decrease from 7.59 days in 2022 to 3.82 days in 2024.
- A lower number of days of payables suggests that the company is managing its trade payables efficiently, potentially benefiting from trade credit terms.

Overall, the trends in these activity ratios suggest that Simulations Plus Inc has been improving its operational efficiency and managing its working capital effectively, which can have positive implications for its financial performance and liquidity position.

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Long-term

Simulations Plus Inc's long-term activity ratios provide insights into the efficiency of the company in utilizing its fixed and total assets to generate sales.

1. Fixed Asset Turnover:
- Simulations Plus Inc's fixed asset turnover has shown fluctuation over the past five years, ranging from 25.28 to 94.95. This ratio indicates that in the most recent year, for every dollar invested in fixed assets, the company generated $92.09 in sales. This suggests a high level of efficiency in using its fixed assets to drive revenue.

2. Total Asset Turnover:
- The total asset turnover has also exhibited growth trends over the years, with the ratio increasing from 0.25 in 2020 to 0.38 in 2024. This ratio signifies that for every dollar of total assets, the company generated $0.38 in sales in the latest year. The increasing trend suggests that Simulations Plus Inc has been effectively utilizing its total assets to drive revenue growth.

Overall, the improving trends in both fixed asset turnover and total asset turnover ratios indicate that Simulations Plus Inc has been successful in optimizing the use of its assets to generate sales, which is a positive sign for the company's long-term operational efficiency and profitability.