Tyler Technologies Inc (TYL)

Short-term

Turnover ratios

1. Inventory Turnover:
- The Inventory turnover for Tyler Technologies Inc was not available for December 31, 2020 and subsequent years, except for December 31, 2021, where it stood at 24.57. This indicates that the company efficiently turned over its inventory during 2021.

2. Receivables Turnover:
- The Receivables turnover ratio improved steadily from 2.92 in 2020 to 3.64 in 2024, reflecting a more efficient collection of receivables over the years. This suggests that the company's credit policies may have become stricter or that it has been more successful in collecting payments from customers.

3. Payables Turnover:
- The Payables turnover ratio decreased significantly from 63.44 in 2020 to around 11 in 2021 and remained relatively stable around this level in subsequent years. This could indicate that the company extended its payment terms to suppliers or managed its payables more effectively.

4. Working Capital Turnover:
- The Working Capital turnover ratio increased from 2.03 in 2020 to a peak of 11.64 in 2021 before declining and then stabilizing around 5.70 in 2024. This suggests that the company efficiently utilized its working capital to generate sales during the analyzed period.

In conclusion, Tyler Technologies Inc demonstrated improvements in its receivables turnover and working capital turnover over the years, indicating better management of its receivables and working capital. However, the decrease in payables turnover may suggest changes in the company's payment practices. Further analysis of the reasons behind these trends may provide valuable insights into the company's operational efficiency and financial management.

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Average number of days

Tyler Technologies Inc's activity ratios indicate the efficiency of its operations in managing inventory, collecting receivables, and paying its suppliers:

1. Days of Inventory on Hand (DOH): The company held inventory for an average of 14.85 days in 2021. This suggests that Tyler Technologies was able to swiftly convert its inventory into sales during the year.

2. Days of Sales Outstanding (DSO): The DSO decreased from 124.97 days in 2020 to 100.33 days in 2024. This indicates that the company improved its efficiency in collecting payments from customers over the years.

3. Number of Days of Payables: The number of days it took the company to pay its suppliers increased from 5.75 days in 2020 to 32.57 days in 2024. This extended payment period may indicate improved cash management tactics or negotiating better terms with suppliers.

Overall, Tyler Technologies Inc's improving DSO and efficient inventory management reflect positive trends in its operational efficiency, while the increasing payables period may suggest strategic working capital management.

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Long-term

The long-term activity ratios of Tyler Technologies Inc, as reflected by the fixed asset turnover and total asset turnover ratios, show significant improvements over the years. The fixed asset turnover ratio, which measures how efficiently the company utilizes its fixed assets to generate sales, has shown a consistent upward trend from 6.65 in 2020 to 13.05 in 2024. This indicates that Tyler Technologies has been able to generate more revenue per dollar invested in fixed assets, showcasing improved efficiency and productivity in utilizing its long-term assets.

On the other hand, the total asset turnover ratio, which indicates how well the company utilizes all its assets to generate sales, had a slight decrease from 0.43 in 2020 to 0.33 in 2021 but recovered and stabilized around 0.41 from 2022 to 2024. This improvement suggests that Tyler Technologies has become more effective in generating sales relative to its total assets over the years, signaling better asset utilization and operational efficiency.

Overall, the increasing trend in the fixed asset turnover ratio combined with the stable total asset turnover ratio implies that Tyler Technologies has been successful in improving the efficiency of its asset utilization and enhancing its operational performance in the long term.