Tandem Diabetes Care Inc (TNDM)

Short-term

Turnover ratios

The activity ratios for Tandem Diabetes Care Inc provide insights into how efficiently the company manages its assets and operations.

1. Inventory Turnover:
- The inventory turnover ratio measures how many times a company sells and replaces its inventory during a specific period.
- Tandem Diabetes Care Inc's inventory turnover has fluctuated over the years, ranging from 2.41 to 4.76.
- A higher inventory turnover indicates that the company is selling its products quickly and efficiently, which can lead to lower carrying costs and potentially higher profitability.

2. Receivables Turnover:
- Unfortunately, there is no data available for Tandem Diabetes Care Inc's receivables turnover, which is typically used to assess how effectively the company is collecting on its credit sales.
- A higher receivables turnover ratio suggests that the company is able to collect payments from customers promptly, improving its cash flow and liquidity.

3. Payables Turnover:
- No information is provided regarding Tandem Diabetes Care Inc's payables turnover, which analyzes how quickly the company is paying its suppliers.
- A higher payables turnover ratio could indicate that the company is efficiently managing its payable obligations and potentially benefiting from favorable credit terms.

4. Working Capital Turnover:
- The working capital turnover ratio assesses how efficiently a company generates revenue based on its working capital.
- Tandem Diabetes Care Inc's working capital turnover has been increasing steadily over the years, from 0.94 to 1.97.
- A higher working capital turnover ratio indicates that the company is efficiently utilizing its working capital to generate sales, which can be a positive sign of operational efficiency.

Overall, analyzing these activity ratios can provide valuable insights into Tandem Diabetes Care Inc's operational efficiency and effectiveness in managing its assets and resources.

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Average number of days

Based on the provided data, Tandem Diabetes Care Inc's Days of Inventory on Hand (DOH) decreased from 97.60 days as of December 31, 2020, to 76.61 days as of December 31, 2021. This indicates the company held its inventory for a shorter period in 2021, which can be a positive sign of efficient inventory management.

However, the DOH increased significantly to 104.47 days by December 31, 2022, further increasing to 151.69 days by December 31, 2023, and then decreasing to 121.18 days by December 31, 2024. This fluctuation suggests potential challenges in managing inventory levels effectively, possibly leading to increased carrying costs or inefficient use of resources.

The Days of Sales Outstanding (DSO) and Number of Days of Payables data are not provided, which limits a comprehensive analysis of Tandem Diabetes Care Inc's activity ratios related to accounts receivable collection and accounts payable management. These ratios are essential in assessing the company's liquidity and operational efficiency.

In summary, while the decrease in DOH in 2021 is a positive indicator, the subsequent fluctuations in inventory holding periods in the following years may warrant further investigation into the company's inventory management practices to optimize working capital and operational efficiency.

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Long-term

Tandem Diabetes Care Inc's fixed asset turnover ratio, which measures the efficiency of the company in generating sales from its fixed assets, has shown an increasing trend over the years. The ratio increased from 9.97 in December 31, 2020, to 13.95 in December 31, 2021, indicating that the company was able to generate more sales per dollar of fixed assets during this period. However, there was a slight decrease to 11.69 in December 31, 2022, which could be due to changes in the company's asset base or sales performance.

On the other hand, the total asset turnover ratio, which reflects the company's ability to generate sales from its total assets, has been relatively stable over the years. The ratio was 0.70 in December 31, 2020, and increased gradually to 0.78 in December 31, 2021, and remained at the same level in 2022 and 2023. Notably, there was a significant increase to 0.97 in December 31, 2024, indicating that the company became more efficient in utilizing its total assets to generate sales at the end of the period.

Overall, the increasing trend in the fixed asset turnover ratio suggests that Tandem Diabetes Care Inc has been effectively utilizing its fixed assets to drive sales, while the stability and eventual increase in the total asset turnover ratio indicate an improvement in the company's overall asset utilization efficiency over the years.