SolarWinds Corp (SWI)

Short-term

Turnover ratios

Based on the provided data for SolarWinds Corp, let's analyze the activity ratios:

1. Inventory Turnover:
- The inventory turnover for SolarWinds Corp is not available for the years 2020 to 2024. This could indicate that the company may have a relatively low dependency on maintaining inventory or uses a just-in-time inventory management system.

2. Receivables Turnover:
- The receivables turnover ratio shows the efficiency of the company in collecting its receivables. SolarWinds Corp experienced an increase in receivables turnover from 2020 (6.15) to 2021 (7.47), indicating that the company was able to collect its receivables more frequently in 2021 compared to 2020. The ratios for the years 2022 to 2024, although slightly fluctuating, suggest a general consistency in collecting receivables efficiently.

3. Payables Turnover:
- The payables turnover ratio indicates how quickly a company pays its suppliers. SolarWinds Corp had a significant increase in payables turnover from 2020 (17.07) to 2021 (30.98), implying that the company was paying its suppliers at a faster rate in 2021. The ratios for 2022 to 2024 show fluctuations, which could indicate changes in the company's payment practices.

4. Working Capital Turnover:
- The working capital turnover ratio reflects how effectively a company generates revenue in relation to its working capital. SolarWinds Corp had a high working capital turnover in 2020 (33.29), indicating efficient utilization of working capital to generate sales. However, the ratio dropped significantly in 2021 (1.62), suggesting a potential inefficiency in utilizing working capital for revenue generation. The data for 2022 to 2024 is not available, making it difficult to assess the trend in working capital turnover for those years.

In conclusion, SolarWinds Corp's receivables turnover and payables turnover ratios show fluctuations over the years, reflecting changes in collection and payment practices. The working capital turnover ratio experienced a significant decline in 2021, indicating a potential inefficiency in utilizing working capital for generating revenue. The lack of data for inventory turnover and subsequent years for working capital turnover limits a comprehensive assessment of the company's activity ratios.

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Average number of days

Based on the provided data for SolarWinds Corp, we can analyze the activity ratios as follows:

1. Days of Inventory on Hand (DOH): The information on days of inventory on hand is not available for the specified years (2020 to 2024), indicated by "— days". This indicates that the company's inventory turnover and management efficiency in terms of inventory held on hand are not provided in the data set.

2. Days of Sales Outstanding (DSO): The days of sales outstanding show the average number of days it takes for the company to collect payment after making a sale. From the data, we see a trend of decreasing DSO from 59.36 days in 2020 to 52.78 days in 2024. This suggests an improvement in the company's efficiency in collecting receivables over the years.

3. Number of Days of Payables: The number of days of payables measures how long it takes a company to pay its suppliers. SolarWinds Corp's data shows fluctuations in the number of days of payables from 21.39 days in 2020 to 32.63 days in 2024, with varying values in the intervening years. A decrease in days of payables could indicate the company's ability to negotiate better payment terms with suppliers or improved cash flow management.

In conclusion, while we lack information on inventory management efficiency, SolarWinds Corp has shown a positive trend in reducing days of sales outstanding over the years. However, the number of days of payables has fluctuated, indicating potential changes in the company's payment practices or supplier relationships.

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Long-term

The Fixed Asset Turnover ratio measures the efficiency of a company in generating sales from its fixed assets. A higher Fixed Asset Turnover ratio indicates that the company is effectively utilizing its fixed assets to generate revenue.

Analyzing SolarWinds Corp's Fixed Asset Turnover ratio over the years, we observe a significant improvement. The ratio has increased consistently from 18.35 in 2020 to 49.87 in 2024. This indicates that SolarWinds Corp has been able to generate more sales per dollar of fixed assets invested, reflecting a higher level of efficiency and productivity in utilizing its fixed assets.

On the other hand, the Total Asset Turnover ratio reflects the company's ability to generate sales from all its assets. A higher Total Asset Turnover ratio suggests that the company is generating more revenue per dollar of total assets.

In the case of SolarWinds Corp, we see a positive trend in the Total Asset Turnover ratio as well. The ratio has increased from 0.13 in 2020 to 0.25 in 2024. This improvement indicates that the company has been able to increase its sales relative to its total assets, demonstrating effective management of its assets to drive revenue growth.

Overall, the increasing trend in both Fixed Asset Turnover and Total Asset Turnover ratios for SolarWinds Corp signifies the company's enhanced operational efficiency and asset utilization over the years, which is a positive indicator of its long-term sustainability and growth prospects.