Teradata Corp (TDC)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Inventory turnover | 113.00 | 187.25 | 58.69 | 57.17 | 55.48 |
| Receivables turnover | 6.85 | 5.10 | 6.11 | 5.73 | 4.82 |
| Payables turnover | 14.69 | 15.94 | 22.78 | 33.16 | 26.06 |
| Working capital turnover | — | 92.24 | 28.19 | 20.82 | 15.27 |
Teradata Corp's activity ratios provide insight into how efficiently the company is managing its assets and liabilities.
1. Inventory Turnover:
- The inventory turnover ratio measures how many times a company's inventory is sold and replaced over a period.
- Teradata Corp's inventory turnover has shown fluctuation over the years, with a significant decrease in 2023 compared to 2022.
- The decreasing trend in inventory turnover indicates that Teradata Corp may be facing challenges in managing and selling its inventory efficiently.
2. Receivables Turnover:
- The receivables turnover ratio reflects how many times a company's accounts receivable are collected and replaced during a period.
- Teradata Corp's receivables turnover has been increasing steadily over the years, indicating improved efficiency in collecting outstanding receivables.
- The increasing trend in receivables turnover suggests that Teradata Corp has been effectively managing its credit policies and collecting payments from customers in a timely manner.
3. Payables Turnover:
- The payables turnover ratio measures how quickly a company is paying off its suppliers.
- Teradata Corp's payables turnover has been decreasing over the years, indicating that the company is taking longer to pay off its suppliers.
- The decreasing trend in payables turnover may suggest that Teradata Corp is stretching out its payment terms with suppliers, which could potentially strain supplier relationships.
4. Working Capital Turnover:
- The working capital turnover ratio shows how efficiently a company is utilizing its working capital to generate sales.
- Teradata Corp's working capital turnover has fluctuated over the years, with a notable increase in 2022 compared to previous years.
- The increase in working capital turnover in 2022 indicates that Teradata Corp was able to generate more sales per dollar of working capital, reflecting improved efficiency in managing its current assets and liabilities.
In summary, while Teradata Corp has shown strengths in managing receivables efficiently, there are areas for improvement, such as inventory management and payables turnover, which could help enhance overall operational efficiency and financial performance.
Average number of days
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 3.23 | 1.95 | 6.22 | 6.38 | 6.58 |
| Days of sales outstanding (DSO) | days | 53.30 | 71.61 | 59.77 | 63.66 | 75.80 |
| Number of days of payables | days | 24.85 | 22.90 | 16.03 | 11.01 | 14.01 |
To analyze Teradata Corp's activity ratios based on the provided data, we will focus on the Days of Inventory on Hand (DOH), Days of Sales Outstanding (DSO), and the Number of Days of Payables.
1. Days of Inventory on Hand (DOH):
- In 2023, the DOH was 6.61 days, indicating that Teradata held its inventory for approximately 6.61 days before it was sold.
- The decreasing trend in DOH from 2021 to 2023 suggests an improvement in inventory management efficiency.
- A lower DOH value is generally favorable as it reflects faster inventory turnover and reduced storage costs.
2. Days of Sales Outstanding (DSO):
- In 2023, the DSO was 56.95 days, representing the average number of days it takes for Teradata to collect revenue from sales.
- The decreasing trend in DSO from 2019 to 2023 indicates better management of accounts receivable and improved cash flow efficiency.
- A lower DSO value suggests prompt collection of receivables, which is beneficial for the company's liquidity position.
3. Number of Days of Payables:
- In 2023, the number of days of payables was 50.84 days, showing the average time it takes for Teradata to pay off its suppliers and creditors.
- The increasing trend in payables days from 2019 to 2023 may indicate a lengthening of payment terms or better negotiation with suppliers.
- A higher number of days of payables can imply improved cash flow management by delaying payment to suppliers to utilize funds more effectively.
Overall, the analysis of these activity ratios for Teradata Corp suggests a positive shift towards more efficient inventory management, faster collection of receivables, and potentially enhanced working capital management through the extension of payables days. These trends are crucial indicators of operational effectiveness and financial health for the company in the specified time period.
Long-term
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Fixed asset turnover | 23.93 | 20.39 | 17.44 | 11.33 | 9.35 |
| Total asset turnover | 1.06 | 0.96 | 0.95 | 0.87 | 0.95 |
Teradata Corp's long-term activity ratios indicate how efficiently the company utilizes its assets over time. The fixed asset turnover has been steadily increasing from 5.43 in 2019 to 7.67 in 2023. This suggests that Teradata is generating more revenue for each dollar invested in fixed assets, indicating improved efficiency in utilizing its long-term assets for revenue generation.
Similarly, the total asset turnover has shown a fluctuating trend but has generally been increasing over the years, from 0.84 in 2020 to 0.98 in 2023. This signifies that Teradata is becoming more efficient in generating sales relative to its total assets, which is a positive sign of improved asset utilization and operational efficiency.
Overall, the increasing trend in both fixed asset turnover and total asset turnover ratios reflects Teradata Corp's ability to efficiently manage its long-term assets and generate revenue from its investments, which may lead to enhanced profitability and sustainable growth in the long run.