Bio-Techne Corp (TECH)

Short-term

Turnover ratios

Bio-Techne Corp's activity ratios provide insights into how efficiently the company is managing its assets and liabilities.

1. Inventory Turnover: The company's inventory turnover has been relatively consistent over the past five years, ranging from 4.76 to 5.89 times. This indicates that Bio-Techne is effectively managing its inventory levels, with a higher turnover generally being favorable as it suggests faster sales and reduced holding costs.

2. Receivables Turnover: The receivables turnover for Bio-Techne has declined from 11.90 in 2020 to 4.80 in 2024. This indicates that the company is taking longer to collect on its sales, which could impact cash flow and liquidity. However, a consistent credit policy and effective collections process may help in improving this ratio.

3. Payables Turnover: The payables turnover ratio has remained relatively stable, with values ranging from 23.42 to 31.80. A high payables turnover suggests that Bio-Techne is efficiently managing its accounts payable by paying off suppliers quickly, potentially benefiting from discounts and maintaining good relationships with vendors.

4. Working Capital Turnover: The working capital turnover ratio has decreased over the past five years, indicating that Bio-Techne may be less efficient in utilizing its working capital to generate sales. A declining trend in this ratio may suggest that the company needs to review its working capital management strategies to improve operational efficiency.

Overall, while Bio-Techne Corp demonstrates efficiency in managing inventory and payables, there are areas such as receivables management and working capital utilization that warrant further attention to optimize the company's operational performance.

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Average number of days

The activity ratios of Bio-Techne Corp show trends in its management of inventory, receivables, and payables over the past five years.

1. Days of Inventory on Hand (DOH):
- The DOH has shown fluctuations over the past five years, ranging from 61.93 days in 2021 to 76.72 days in 2023. However, it currently stands at 66.92 days as of June 30, 2024. This indicates that the company takes, on average, about 66.92 days to sell its inventory. A higher DOH could suggest overstocking or slow-moving inventory, while a lower DOH may indicate efficient inventory management and turnover.

2. Days of Sales Outstanding (DSO):
- The DSO has increased steadily over the years, from 30.67 days in 2020 to 76.00 days in 2024. This implies that it takes the company an average of 76.00 days to collect its accounts receivable. A higher DSO could signal potential issues with credit policies or collection procedures, while a lower DSO indicates more effective management of receivables.

3. Number of Days of Payables:
- The number of days Bio-Techne takes to pay its bills, as indicated by the days of payables, has fluctuated slightly over the years. It increased from 14.60 days in 2020 to 15.50 days in 2022 but decreased to 14.14 days in 2024. A longer period of payables could suggest favorable credit terms with suppliers, while a shorter period may indicate a need to manage cash flows more effectively.

In conclusion, Bio-Techne Corp's activity ratios reflect various aspects of its operational efficiency and liquidity management. Monitoring these ratios over time can provide insights into the company's ability to manage its working capital effectively.

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Long-term

Bio-Techne Corp's long-term activity ratios reflect its efficiency in utilizing its fixed assets and total assets to generate revenue over the past five years. The fixed asset turnover ratio has shown a declining trend from 8.25 in 2020 to 4.62 in 2024, indicating that the company is generating less revenue per dollar of fixed assets invested over time. This may suggest a decrease in the company's operational efficiency or a reduction in the utilization of its fixed assets.

On the other hand, the total asset turnover ratio has remained relatively stable around 0.43 to 0.48, indicating that Bio-Techne Corp generates revenue at a consistent rate concerning its total assets. While this ratio is lower compared to the fixed asset turnover ratio, it suggests that the company is efficiently utilizing its total assets to generate sales.

Overall, the declining trend in the fixed asset turnover ratio may raise concerns about the company's ability to effectively utilize its fixed assets for revenue generation. It would be important for the company to assess and potentially optimize its fixed asset utilization to improve operational efficiency and profitability in the long term.