Tetra Tech Inc (TTEK)

Short-term

Turnover ratios

Inventory turnover could not be calculated from the data provided.

Receivables turnover has been relatively stable over the past five years, ranging from 3.97 to 4.68. This indicates that Tetra Tech Inc collects its accounts receivable efficiently, with the ability to convert receivables into cash multiple times within a year.

Payables turnover has shown fluctuation over the years, with a notable decrease in 2020 followed by a slight increase in 2021. A payables turnover below 1 could suggest that the company takes longer to pay its suppliers, which may impact relationships with vendors.

Working capital turnover has shown an increasing trend over the past five years, reaching 30.23 in 2023. This indicates that Tetra Tech Inc is effectively utilizing its working capital to generate sales. A higher working capital turnover ratio reflects efficient management of working capital resources.

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Average number of days

The activity ratios of Tetra Tech Inc, as indicated by Days of Sales Outstanding (DSO) and Number of Days of Payables, reflect the company's efficiency in managing its accounts receivable and accounts payable cycles.

The Days of Sales Outstanding (DSO) measures how long it takes for Tetra Tech to collect revenue after making a sale. The decreasing trend from 91.92 days in 2019 to 80.35 days in 2023 suggests that the company has improved its collections process, resulting in faster cash inflows from sales.

On the other hand, the Number of Days of Payables indicates the average number of days it takes for Tetra Tech to pay its suppliers and vendors. The significant increase in payables days from 27.94 days in 2019 to 733.76 days in 2023 may indicate a change in payment terms with suppliers or a deliberate strategy to extend payment periods to manage cash flow.

Overall, the analysis of Tetra Tech's activity ratios suggests that the company has become more efficient in collecting receivables while also strategically managing its payables to optimize cash flow and working capital management.

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Long-term

Tetra Tech Inc's long-term activity ratios, focusing on the efficiency of its fixed assets and total assets utilization over the past five years, demonstrate some fluctuations. The fixed asset turnover ratio, which measures how efficiently the company generates sales from its fixed assets, has shown variability over the period. In 2023, the fixed asset turnover ratio dropped to 59.75 from the previous year's 108.02, indicating a decrease in the company's ability to generate sales from its fixed assets efficiently.

On the other hand, the total asset turnover ratio, which illustrates how effectively the company utilizes all its assets to generate revenue, has also shown fluctuations. While the total asset turnover ratio has generally decreased from 2019 to 2023, it remains above 1, implying that Tetra Tech Inc generates more in sales relative to its total assets' value.

Overall, the analysis of Tetra Tech Inc's long-term activity ratios suggests that there could be room for improvement in efficiently utilizing fixed assets to generate sales. However, the company has been effective in generating revenue compared to its total asset base, indicating a relatively stable performance in terms of total assets utilization.