Vericel Corp Ord (VCEL)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Inventory turnover | 4.73 | 3.41 | 3.75 | 4.27 | 5.51 |
| Receivables turnover | 3.74 | 4.06 | 5.13 | 4.25 | 4.17 |
| Payables turnover | 2.77 | 3.22 | 5.56 | 5.91 | 5.92 |
| Working capital turnover | 1.24 | 1.10 | 1.18 | 1.23 | 1.28 |
Vericel Corp's activity ratios provide insights into how efficiently the company is managing its resources.
1. Inventory Turnover:
- Vericel Corp's inventory turnover ratio has fluctuated over the past five years, with a decrease in 2022 followed by an increase in 2023.
- A higher inventory turnover indicates that Vericel Corp is selling its inventory more quickly, which is generally positive as it reduces the risk of obsolete inventory.
2. Receivables Turnover:
- The receivables turnover ratio has varied over the years but has generally remained within a stable range.
- A stable or improving receivables turnover ratio indicates that Vericel Corp is effectively collecting its accounts receivable, which is crucial for maintaining cash flow and liquidity.
3. Payables Turnover:
- Vericel Corp's payables turnover ratio has shown a decreasing trend since 2021.
- A declining payables turnover ratio may suggest that the company is taking longer to pay its suppliers, which could strain relationships or indicate potential liquidity issues.
4. Working Capital Turnover:
- The working capital turnover ratio has also been relatively stable over the years, with minor fluctuations.
- A consistent working capital turnover ratio indicates that Vericel Corp is efficiently utilizing its working capital to generate revenue.
Overall, analyzing these activity ratios together provides a holistic view of Vericel Corp's operational efficiency and effectiveness in managing its inventory, receivables, payables, and working capital.
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 | 77.12 | 106.91 | 97.37 | 85.48 | 66.22 |
| Days of sales outstanding (DSO) | days | 97.49 | 89.80 | 71.13 | 85.84 | 87.55 |
| Number of days of payables | days | 131.69 | 113.22 | 65.61 | 61.71 | 61.64 |
Vericel Corp's Days of Inventory on Hand (DOH) has decreased from 106.91 days in 2022 to 77.12 days in 2023, indicating that the company is managing its inventory more efficiently and improving its inventory turnover. However, the DOH is higher compared to 2020 and 2019, suggesting that there may still be room for further improvement in managing inventory levels.
The Days of Sales Outstanding (DSO) show an increasing trend from 87.49 days in 2021 to 107.84 days in 2023. This indicates that the company is taking longer to collect its accounts receivable, which could impact its cash flow and liquidity. Vericel Corp may need to focus on improving its credit and collection processes to reduce DSO and enhance its cash conversion cycle.
In terms of the Number of Days of Payables, Vericel Corp's payables period has increased steadily from 61.64 days in 2019 to 131.69 days in 2023. This indicates that the company is taking longer to pay its suppliers, which could reflect favorable terms negotiated with vendors but may also signal potential cash flow constraints. Vericel Corp should strive to strike a balance between optimizing payables and maintaining good relationships with suppliers.
Overall, Vericel Corp's activity ratios suggest improvements in inventory management efficiency but also highlight challenges in accounts receivable collection and payables management that may need to be addressed to enhance overall operational performance and financial stability.
Long-term
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Fixed asset turnover | 4.74 | 10.40 | 11.80 | 16.51 | 16.85 |
| Total asset turnover | 0.56 | 0.60 | 0.64 | 0.60 | 0.77 |
Vericel Corp's long-term activity ratios indicate how efficiently the company utilizes its fixed and total assets to generate sales over the years. The fixed asset turnover ratio has been fluctuating, decreasing from 16.50 in 2019 to 4.74 in 2023. This suggests a decline in the company's ability to generate sales from its fixed assets, indicating a potential inefficiency in asset utilization.
On the other hand, the total asset turnover ratio has also shown a decreasing trend, from 0.77 in 2019 to 0.56 in 2023. This signifies a decline in the company's overall efficiency in using its total assets to generate revenue.
The decreasing trend in both fixed asset turnover and total asset turnover ratios may raise concerns about Vericel Corp's asset utilization efficiency and could indicate challenges in effectively leveraging its assets to drive sales growth in recent years. Further investigation into the factors contributing to these declines would be essential to identify areas for improvement and optimize the company's asset utilization in the future.