Verra Mobility Corp (VRRM)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Inventory turnover | 15.65 | 13.98 | 17.66 | 873.37 | 6.91 |
| Receivables turnover | 0.44 | 0.48 | 0.21 | 0.83 | 3.42 |
| Payables turnover | 3.57 | 3.38 | 3.16 | 2.86 | 3.63 |
| Working capital turnover | 0.46 | 0.54 | 0.23 | 0.05 | 2.32 |
The inventory turnover ratio for Verra Mobility Corp has been relatively stable over the past three years, ranging from 2.42 to 2.91. This indicates that the company is able to efficiently manage its inventory levels and turn over its inventory into sales. A higher ratio would suggest faster inventory turnover.
The receivables turnover ratio shows a declining trend from 2019 to 2021 before increasing in 2022 and 2023. This ratio measures how quickly the company collects outstanding receivables from its customers. The increase in 2022 and 2023 may indicate improvements in the company's credit and collection policies.
The payables turnover ratio has fluctuated over the years, indicating changes in how quickly the company is paying its suppliers. A lower ratio suggests that the company is taking longer to pay its suppliers, which could indicate an opportunity to improve working capital management.
The working capital turnover ratio measures the efficiency with which a company utilizes its working capital to generate sales. Verra Mobility Corp's ratio has generally shown an increasing trend, indicating improvements in the company's ability to generate sales relative to its working capital.
Overall, Verra Mobility Corp's activity ratios provide insights into the company's efficiency in managing its inventory, collecting receivables, paying suppliers, and utilizing its working capital to drive sales. An in-depth analysis of these ratios can help identify areas for improvement and guide strategic decision-making.
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 | 23.32 | 26.11 | 20.66 | 0.42 | 52.79 |
| Days of sales outstanding (DSO) | days | 827.79 | 752.96 | 1,735.55 | 441.20 | 106.79 |
| Number of days of payables | days | 102.21 | 108.02 | 115.43 | 127.63 | 100.41 |
Days of inventory on hand (DOH) measures how many days, on average, a company holds inventory before selling it. Verra Mobility Corp's DOH has been increasing over the years, indicating a longer time taken to sell inventory, which may tie up resources and potentially lead to higher carrying costs.
Days of sales outstanding (DSO) represents the average number of days it takes for a company to collect revenue after a sale is made. Verra Mobility Corp's DSO has fluctuated over the years but generally shows an improvement in collection efficiency from 2020 to 2022, with a decrease in the number of days required to collect revenue. However, in 2023, there was a slight increase in DSO, suggesting a potential slowdown in collections.
Number of days of payables reflects how long a company takes to pay its suppliers. Verra Mobility Corp's days of payables have fluctuated over the years, with a notable increase in 2023 compared to 2022, indicating a longer time taken to pay suppliers. This could potentially signal improved cash flow management but may also indicate strained relationships with suppliers if payment terms are being stretched.
Overall, the analysis of Verra Mobility Corp's activity ratios suggests trends in inventory management, accounts receivable collection, and accounts payable practices that can provide insights into the company's operational efficiency and liquidity position.
Long-term
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Fixed asset turnover | 0.84 | 0.86 | 0.42 | 0.19 | 5.37 |
| Total asset turnover | 0.06 | 0.05 | 0.02 | 0.01 | 0.28 |
Long-term activity ratios provide insights into how effectively a company is utilizing its assets to generate sales. In the case of Verra Mobility Corp, the fixed asset turnover ratio has been relatively stable over the last five years, indicating that the company is consistently generating sales relative to its investment in fixed assets. The ratio hovers around 5.03 to 5.59, suggesting that for every dollar invested in fixed assets, the company is generating approximately $5.03 to $5.59 in sales.
On the other hand, the total asset turnover ratio highlights the efficiency of the company in generating sales relative to all its assets. Verra Mobility Corp's total asset turnover has shown an increasing trend over the years, improving from 0.29 in 2020 to 0.46 in 2023. This indicates that the company has been utilizing its total assets more efficiently to generate revenue, with 0.46 in 2023 indicating that for every dollar invested in assets, the company is generating $0.46 in sales.
Overall, these ratios suggest that Verra Mobility Corp has been effectively managing its assets to drive sales growth over the years, particularly in terms of both fixed assets and total assets. The consistent performance of fixed asset turnover and the improving trend in total asset turnover reflect operational efficiency and effective capital allocation within the company.