TripAdvisor Inc (TRIP)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Inventory turnover | — | — | — | — | — |
| Receivables turnover | 9.08 | 8.39 | 5.57 | 4.73 | 8.83 |
| Payables turnover | 49.61 | 30.03 | 30.44 | 39.61 | 90.55 |
| Working capital turnover | 2.41 | 1.97 | 1.47 | 1.72 | 15.86 |
Activity ratios provide insights into how effectively a company is managing its resources to generate sales and collect receivables. Here is a detailed analysis of the activity ratios for TripAdvisor Inc. over the past five years:
1. Receivables Turnover:
- TripAdvisor's receivables turnover has fluctuated over the past five years, ranging from 4.54 to 9.31 times.
- A higher receivables turnover indicates that the company is efficient in collecting receivables from its customers.
- The increase in 2023 compared to 2022 suggests an improvement in the collection efficiency of accounts receivable.
2. Payables Turnover:
- The payables turnover ratio measures how quickly a company pays its suppliers.
- TripAdvisor's payables turnover has varied between 2.74 and 8.55 times over the last five years.
- A lower payables turnover ratio may indicate that the company is taking longer to pay its suppliers, which could affect supplier relationships.
3. Working Capital Turnover:
- Working capital turnover reflects how well a company utilizes its working capital to generate revenue.
- TripAdvisor's working capital turnover has shown a decreasing trend from 15.92 to 1.55 times over the past five years.
- A higher working capital turnover ratio is generally preferable as it indicates efficient utilization of working capital.
Overall, TripAdvisor's activity ratios demonstrate mixed performance over the years. While the company has shown improvements in receivables turnover and payables turnover in certain periods, the declining trend in working capital turnover raises concerns about the company's efficiency in utilizing its working capital to drive sales. Monitoring these ratios over time can provide valuable insights into TripAdvisor's operational efficiency and management of resources.
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 | — | — | — | — | — |
| Days of sales outstanding (DSO) | days | 40.18 | 43.49 | 65.51 | 77.11 | 41.34 |
| Number of days of payables | days | 7.36 | 12.16 | 11.99 | 9.21 | 4.03 |
Days of Inventory on Hand (DOH) for TripAdvisor Inc. are not available for the years 2019 to 2023. However, analyzing the Days of Sales Outstanding (DSO) and Number of Days of Payables can provide insights into the efficiency of the company's operating cycle.
DSO measures the average number of days it takes for TripAdvisor to collect revenue after making a sale. A lower DSO is generally preferred as it indicates faster cash collection. The trend for TripAdvisor shows fluctuation in DSO over the years, with a significant increase in 2021 and 2022, followed by a decrease in 2023. The decrease in 2023 compared to the previous years suggests that the company improved its efficiency in collecting revenue from customers.
Number of Days of Payables measures the average number of days it takes for TripAdvisor to pay its suppliers. A higher number of days of payables means the company takes longer to pay its suppliers. The trend for TripAdvisor shows fluctuations over the years, with a notable increase in 2022 and a decrease in 2023. The decrease in 2023 compared to 2022 may indicate that the company improved its payment terms with suppliers.
Overall, the analysis of DSO and Number of Days of Payables suggests that TripAdvisor Inc. has been working on optimizing its operating cycle efficiency by reducing DSO and managing payables effectively. This indicates potential improvements in the company's working capital management and cash flow generation in recent years.
Long-term
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Fixed asset turnover | 9.13 | 7.48 | 3.99 | 2.37 | 5.76 |
| Total asset turnover | 0.69 | 0.57 | 0.37 | 0.29 | 0.78 |
The fixed asset turnover ratio for TripAdvisor Inc. has shown a consistent increasing trend over the past five years, indicating that the company is generating more revenue relative to its investment in fixed assets. This suggests improved efficiency in utilizing its long-term assets to generate sales.
In contrast, the total asset turnover ratio has displayed a fluctuating pattern, with a notable decrease in 2021 followed by an increase in 2022 and then a decrease again in 2023. This could imply fluctuations in the company's overall asset utilization efficiency over the years.
Overall, the increasing trend in fixed asset turnover is a positive indicator of improved operational efficiency in utilizing fixed assets for revenue generation, while the fluctuating total asset turnover ratio may warrant further investigation into the factors influencing the company's overall asset utilization efficiency.