Tetra Tech Inc (TTEK)

Short-term

Turnover ratios

Inventory turnover indicates how efficiently a company is managing its inventory. In the case of Tetra Tech Inc, the inventory turnover for the most recent fiscal year was 0.68, which suggests that the company is not efficiently turning over its inventory compared to previous years.

Receivables turnover measures how quickly a company collects cash from its customers. Tetra Tech Inc has maintained a relatively stable receivables turnover ratio over the past five years, ranging from 4.47 to 4.84, indicating consistent collection of receivables.

Payables turnover demonstrates how quickly a company pays its suppliers. Tetra Tech Inc's payables turnover has shown some fluctuations over the years, with the ratio decreasing from 0.50 in 2023 to 0.45 in 2024. This implies that the company is taking slightly longer to settle its payables in the most recent year.

Working capital turnover reflects how efficiently a company is utilizing its working capital to generate sales. Tetra Tech Inc's working capital turnover has also varied over the years, with a notable decrease from 30.23 in 2023 to 16.89 in 2024. This indicates a change in the company's efficiency in utilizing its working capital to generate revenue.

Overall, Tetra Tech Inc's activity ratios demonstrate mixed performance in managing its inventory, collecting receivables, paying suppliers, and utilizing working capital over the past five years. It would be essential for the company to further evaluate its inventory management practices and working capital efficiency to optimize its operational performance.

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Average number of days

The activity ratios of Tetra Tech Inc provide insights into the efficiency of the company's operations and management of its working capital.

1. Days of Inventory on Hand (DOH): In 2024, Tetra Tech Inc had 536.08 days of inventory on hand, indicating that it takes a significant amount of time for the company to sell its inventory. Without historical data for comparison, it is difficult to assess the trend. However, a high DOH ratio may suggest slow-moving inventory or inefficiencies in inventory management.

2. Days of Sales Outstanding (DSO): Tetra Tech Inc's DSO has fluctuated over the past five years, ranging from 75.36 days in 2024 to 81.58 days in 2020. A lower DSO indicates that the company is collecting payments from its customers more quickly, which is a positive sign of efficient accounts receivable management. The decrease in DSO from 2020 to 2024 implies an improvement in the company's credit policies or collection efforts.

3. Number of Days of Payables: Tetra Tech Inc's days of payables have also varied significantly, with the highest being 1,364.91 days in 2022 and the lowest at 733.76 days in 2023. A high number of days of payables may suggest that the company is taking longer to pay its suppliers, which could strain supplier relationships or indicate cash flow issues. It is important to monitor changes in this ratio to ensure optimal management of payables.

Overall, Tetra Tech Inc should continue to monitor and manage its activity ratios to optimize its working capital efficiency and operational performance. The company may need to focus on improving inventory turnover, streamlining accounts receivable processes, and effectively managing payables to enhance its overall financial health and profitability.

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Long-term

The long-term activity ratios for Tetra Tech Inc show 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 fluctuations over the years, with values ranging from 59.75 to 108.02. This ratio measures how well the company is utilizing its fixed assets to generate revenue, with higher values indicating better efficiency. In the most recent year, the ratio stands at 71.16, suggesting that Tetra Tech Inc generated $71.16 in revenue for every dollar invested in fixed assets. The improvement from the previous year indicates better utilization of fixed assets in generating revenue.

On the other hand, the total asset turnover ratio reflects the company's overall efficiency in generating revenue from all its assets, including both fixed and current assets. The values range from 1.17 to 1.33 over the five-year period. A higher total asset turnover ratio indicates more efficient use of assets to generate sales. With a ratio of 1.24 in the most recent year, Tetra Tech Inc generated $1.24 in revenue for every dollar invested in total assets.

Overall, Tetra Tech Inc has shown fluctuating but relatively stable performance in utilizing its assets to generate revenue over the past five years, with improvements in both fixed asset turnover and total asset turnover ratios in the most recent year.