Tandem Diabetes Care Inc (TNDM)

Short-term

Turnover ratios

The inventory turnover ratio for Tandem Diabetes Care Inc has shown an improving trend from March 31, 2020 to December 31, 2024, indicating that the company is managing its inventory more efficiently over time. The ratio increased from 3.03 to 3.81 during this period, peaking at 4.76 on December 31, 2021, before slightly decreasing.

On the other hand, the receivables turnover and payables turnover ratios remained unavailable throughout the entire period, indicating a lack of data for analyzing the efficiency of the company's accounts receivable and accounts payable management.

The working capital turnover ratio, which measures how efficiently the company is using its working capital to generate sales, demonstrated an increasing trend from March 31, 2020 to December 31, 2024. The ratio improved from 2.18 to 2.22 during this period, reaching its peak on December 31, 2024. This suggests that Tandem Diabetes Care Inc has been effectively utilizing its working capital to support its operations and generate revenue.

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Average number of days

Based on the provided data, we can analyze the activity ratios for Tandem Diabetes Care Inc as follows:

1. Days of Inventory on Hand (DOH):
- Tandem Diabetes Care Inc's DOH shows the number of days it takes for the company to turn its inventory into sales. The trend indicates a fluctuating pattern over the quarters.
- A decreasing trend in DOH is generally favorable as it implies faster inventory turnover, but the company experienced a rise from 2022 to 2024, which may suggest challenges in managing inventory efficiently.
- The significant increase in DOH from December 2023 to March 2024 is worth investigating, as it indicates a possible buildup of excess inventory, which could tie up cash and increase carrying costs.

2. Days of Sales Outstanding (DSO):
- The DSO ratio, which indicates the average number of days it takes for Tandem Diabetes Care Inc to collect its accounts receivable, is unavailable (indicated as "— days" for all reported periods).
- The absence of DSO data impedes an evaluation of the company's efficiency in collecting payments from customers, thus offering limited insights into its accounts receivable management.

3. Number of Days of Payables:
- The data on the number of days of payables is also not provided for the mentioned periods.
- Without information on the company's payables turnover, it is challenging to gauge how long Tandem Diabetes Care Inc takes to pay its suppliers, thus limiting the assessment of its ability to effectively manage its payables.

In conclusion, while the trend in DOH provides some insights into Tandem Diabetes Care Inc's inventory management efficiency, the lack of data on DSO and payables turnover hinders a comprehensive analysis of the company's overall activity ratios related to accounts receivable and payables. Further disclosure of these ratios would be beneficial for a more thorough assessment of the company's working capital management.

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Long-term

Tandem Diabetes Care Inc's long-term activity ratios provide insights into how efficiently the company is utilizing its assets to generate sales revenue.

1. Fixed Asset Turnover: This ratio measures how effectively the company is using its fixed assets to generate sales. Tandem Diabetes Care Inc's fixed asset turnover ratio has shown fluctuations over the years, ranging from a low of 7.52 in June 2021 to a high of 14.76 in March 2022. The ratio generally indicates an increasing trend, peaking at 14.76 in March 2022 before stabilizing around 10.85 to 11.69 in the later periods. This suggests that the company has been able to generate more sales revenue per dollar of investment in fixed assets as time progresses.

2. Total Asset Turnover: This ratio reflects the company's overall efficiency in using its total assets to generate sales. Tandem Diabetes Care Inc's total asset turnover ratio has improved from 0.67 in June 2020 to 1.09 in December 2024. The ratio exhibits an overall increasing trend, indicating that the company is becoming more efficient in generating sales from its total assets. The spike in the ratio in the later periods suggests that the company has been increasingly effective in utilizing its assets to drive revenue growth.

Overall, the analysis of Tandem Diabetes Care Inc's long-term activity ratios highlights an improvement in asset utilization and revenue generation efficiency over the years. The company's ability to generate higher sales from its assets, both fixed and total, indicates a positive trend in operational performance and efficiency.