Veracyte Inc (VCYT)

Short-term

Turnover ratios

The activity ratios of Veracyte Inc. reflect various operational efficiencies over the specified periods, from September 2020 through June 2025.

Inventory Turnover:
This ratio measures how effectively the company manages its inventory levels by indicating the number of times inventory is sold and replenished during a period. The data demonstrates fluctuations within a range of approximately 6.26 to 9.40 turns per year. Notably, the highest turnover was observed in June 2024 (9.40), suggesting improved inventory management during that period. Conversely, the lowest turnover occurred in March 2021 (6.60), indicating relatively slower inventory movement. Overall, the trend shows some volatility but generally maintains a level that suggests reasonably efficient inventory management.

Receivables Turnover:
This ratio indicates the effectiveness of the company in collecting its accounts receivable. Veracyte exhibited an increasing trend over time, moving from approximately 6.36 times annually in December 2020 to around 9.58 times in December 2024. This upward trend suggests an improvement in receivables collection efficiency, with shorter average collection periods in the later periods. The period between September 2020 and December 2021 experienced some fluctuations, but the overall trajectory indicates better collection performance over time.

Payables Turnover:
This ratio reflects the company's ability to pay its suppliers and creditors. Starting at 20.90 in September 2020, there was a notable decline to 5.83 in March 2021, implying an extension of payment periods or delays. Afterward, the ratio increased sharply, reaching as high as 18.09 in December 2024, before declining again to 13.68 in June 2025. The trend suggests periods of both extended and shortened creditor payment cycles, with the recent data indicating a tendency toward longer credit periods relative to earlier years.

Working Capital Turnover:
This ratio assesses how efficiently the company utilizes its working capital to generate sales. The data reveals a general upward trend from 0.32 in September 2020 to approximately 1.63 in June 2023, indicating improved utilization of working capital over time. After reaching this peak, the ratio stabilized around 1.50 to 1.62, with slight declines in the latest periods, possibly reflecting adjustments in operational efficiency or working capital management.

Summary:
Overall, Veracyte Inc. has demonstrated enhanced receivables collection efficiency and improved working capital utilization over the analyzed periods. Inventory management remained fairly stable with moderate fluctuations, while the company’s payables management exhibited variability, reflecting periods of both extended credit terms and more prompt payments. These trends collectively suggest ongoing efforts to optimize operational efficiency, with some variability aligned with strategic or market conditions.

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Average number of days

The activity ratios of Veracyte Inc, particularly the days of inventory on hand (DOH), days of sales outstanding (DSO), and days of payables, demonstrate evolving operational efficiencies over the observed period.

Days of Inventory on Hand (DOH):
Between September 2020 and March 2021, DOH increased notably from approximately 40.27 days to 55.33 days, indicating a period where inventory clearance or turnover slowed down, potentially reflecting strategic stockpiling or supply chain adjustments. Subsequently, from June 2021 onward, DOH fluctuated within a range around the mid-50s days, with some decline in late 2023 to approximately 48.84 days, and further reduction into mid-2024. Notably, the DOH increased again to over 57 days by March 2025. Overall, the company experienced periods of inventory accumulation and reduction, with the recent trend indicating some tightening of inventory holdings.

Days of Sales Outstanding (DSO):
The receivables collection period was relatively stable initially, around 57 days in late 2020. A significant increase occurred by March 2021, reaching roughly 82.68 days, implying a slowdown in receivables collections. Following this peak, DSO generally declined, reaching approximately 41.80 days by September 2023, and maintained below 45 days into 2024, indicating improved cash collection efficiency. Nonetheless, from March to June 2025, DSO slightly increased again to over 42 days, suggesting some flexibility in receivables management.

Number of Days of Payables:
The payable period exhibited considerable variability. Starting at approximately 17.46 days in September 2020, it increased sharply to over 62 days by March 2021, reflecting extended credit terms or delayed payments to suppliers. After peaking, the payables days decreased significantly, reaching around 20 days by December 2024. The trend indicates an overall reduction in the time taken to settle payables, with some fluctuations. The recent data suggests a tendency toward shorter payment cycles, perhaps indicative of improved liquidity management or supplier relationship strategies.

Summary of Trends:
Overall, Veracyte Inc's activity ratios portray a company that experienced periods of inventory buildup and receivables collection delays during early 2021. Over time, both inventory and receivables efficiencies improved, with shorter collection periods and reduced inventory days by late 2022 and 2023. The payables cycle also shortened substantially by the end of 2024, which could reflect enhanced cash flow management. However, the increase in DOH and DSO observed toward March 2025 indicates a potential reversal of earlier efficiencies, warranting ongoing monitoring to understand operational or strategic adjustments affecting these activity metrics.

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Long-term

The long-term activity ratios for Veracyte Inc. provide insight into the company's utilization of its fixed assets and total assets over the observed periods. The fixed asset turnover ratio demonstrates a notable fluctuation, beginning at 12.64 times as of September 30, 2020, and reaching a peak of 13.07 in December 2020. Subsequent periods reveal a significant decline, with the ratio dropping to approximately 5.97 by June 30, 2021, indicative of reduced efficiency in generating revenue from fixed assets during that period. Following this nadir, the ratio shows a gradual recovery, rising steadily to 10.61 as of June 30, 2024, suggesting an improved utilization or investment in fixed assets.

The total asset turnover ratio exhibits a more consistent upward trend across the analyzed periods. It begins at 0.25 as of September 30, 2020, and gradually advances to 0.36 by June 30, 2025. This steady increase indicates an enhancing effectiveness of the company's overall asset base in generating sales, reflecting potentially better operational management or growth in revenue relative to the total assets employed.

Overall, the fixed asset turnover ratio's volatile pattern underscores periods of efficiency fluctuation concerning fixed assets, while the continuous improvement in the total asset turnover ratio points to a positive trend in the company's capacity to leverage its total assets for revenue generation over time.