SolarWinds Corp (SWI)

Short-term

Turnover ratios

Inventory turnover is not provided in the data for SolarWinds Corp. Receivables turnover has been relatively consistent over the past five years, increasing steadily from 5.44 in 2019 to 7.30 in 2023. This indicates that the company is efficient in collecting outstanding receivables from its customers.

Payables turnover has also shown variations over the years, with a significant increase from 14.36 in 2019 to 30.98 in 2021, followed by a decline to 6.83 in 2022 and an increase to 8.97 in 2023. This fluctuation may suggest changes in the company's payment terms with suppliers.

Working capital turnover is not provided for the latest years, but it was significant in 2020 at 33.29, indicating that SolarWinds Corp effectively utilized its working capital to generate revenue during that period.

Overall, the analysis of these activity ratios suggests that SolarWinds Corp has managed its working capital effectively, maintained steady receivables turnover, and experienced fluctuations in payables turnover which may reflect shifts in its payment strategies.

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Average number of days

Based on the activity ratios provided for SolarWinds Corp, we can observe the following trends over the past five years:

1. Days of Sales Outstanding (DSO):
- The days of sales outstanding have fluctuated over the past five years, ranging from a high of 67.12 days in 2019 to a low of 48.87 days in 2021. This ratio represents the average number of days it takes for the company to collect payments from its customers after making a sale.
- A decreasing trend in DSO is generally positive as it indicates that the company is collecting payments more efficiently and quickly, thereby improving its cash flow and liquidity position.

2. Days of Inventory on Hand (DOH):
- Unfortunately, the data for days of inventory on hand is missing for all years. This ratio typically measures how many days it takes for a company to sell its entire inventory. Without this data, we are unable to analyze the efficiency of SolarWinds' inventory management.

3. Number of Days of Payables:
- The number of days of payables shows significant fluctuations over the five-year period, ranging from a low of 11.78 days in 2021 to a high of 53.41 days in 2022. This ratio indicates the average number of days it takes for the company to pay its suppliers.
- A lower number of days of payables suggests that the company is paying its suppliers more quickly, which could indicate strong supplier relationships or operating requirements. Conversely, a higher number of days of payables may signal a potential liquidity advantage as the company delays payments.

In summary, SolarWinds Corp has shown improvements in its collection of receivables as evidenced by the decreasing trend in days of sales outstanding. However, the fluctuating figures for days of payables indicate variability in the company's vendor payment strategies. Unfortunately, without data on days of inventory on hand, we are unable to assess the efficiency of SolarWinds' inventory management practices.

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Long-term

The long-term activity ratios for SolarWinds Corp indicate the efficiency with which the company utilizes its fixed assets and total assets to generate revenue over a span of five years.

1. Fixed Asset Turnover: SolarWinds Corp's fixed asset turnover has shown a consistent upward trend over the years, starting from 17.18 in 2019 and reaching 38.58 in 2023. This indicates that the company has been able to generate more revenue per dollar of fixed assets invested. The increasing trend suggests improved efficiency in utilizing fixed assets to drive sales.

2. Total Asset Turnover: The total asset turnover ratio for SolarWinds Corp has also demonstrated a positive trajectory, rising from 0.13 in 2019 to 0.23 in 2023. This indicates that the company has been able to generate more sales relative to its total assets, reflecting improved efficiency in asset utilization.

Overall, SolarWinds Corp has shown significant improvements in both its fixed asset turnover and total asset turnover ratios over the years, emphasizing the company's ability to generate higher sales from its asset base. This suggests efficient management of assets to drive revenue growth and enhance overall operational efficiency.