VeriSign Inc (VRSN)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Inventory turnover | — | — | — | — | — |
| Receivables turnover | 237.00 | 229.82 | 251.25 | 272.53 | 75.82 |
| Payables turnover | 15.78 | 20.48 | 21.33 | 14.60 | 11.35 |
| Working capital turnover | — | — | 6.82 | 5.52 | 3.93 |
Verisign Inc.'s activity ratios provide insights into how efficiently the company is managing its assets and liabilities.
1. Receivables Turnover: Verisign's receivables turnover ratio has shown fluctuations over the years, ranging from 70.96 in 2019 to 175.91 in 2022. A higher receivables turnover ratio indicates that the company is collecting its accounts receivable more efficiently. The significant decrease in 2023 to 109.79 could potentially signal slower collections from customers, which may require closer monitoring.
2. Working Capital Turnover: Verisign's working capital turnover has been steadily increasing over the years, from 3.93 in 2019 to 6.82 in 2021. This indicates that the company is generating more revenue per dollar of working capital, reflecting improved efficiency in utilization of its current assets to generate sales. However, the lack of working capital turnover data in 2020 and 2023 makes it challenging to assess the trend accurately.
Overall, efficient management of receivables and working capital turnover ratios are crucial for Verisign to sustain its operations effectively and optimize its liquidity and profitability. Monitoring these ratios closely can help the company make informed decisions and improve its overall financial performance.
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 | — | — | — | — | — |
| Days of sales outstanding (DSO) | days | 1.54 | 1.59 | 1.45 | 1.34 | 4.81 |
| Number of days of payables | days | 23.12 | 17.82 | 17.11 | 25.00 | 32.17 |
Verisign Inc.'s Days of Sales Outstanding (DSO) measures the average number of days it takes for the company to collect payment after making a sale. Over the past five years, the trend has been fluctuating. In 2023, there was an increase in DSO to 3.32 days, compared to 2.07 days in 2022. This indicates that in 2023, it took longer for Verisign Inc. to collect payments from its customers, reflecting potential issues with accounts receivable management. The DSO in 2021 was 3.56 days, indicating a slight increase from 2.37 days in 2020. However, the DSO was relatively high in 2019 at 5.14 days, suggesting improvement in recent years.
Days of Inventory on Hand (DOH) is not provided for any of the years, so it's not possible to analyze Verisign Inc.'s efficiency in managing inventory turnover.
The Number of Days of Payables is not available for any of the years, so we cannot assess how long Verisign Inc. takes to pay its suppliers.
Overall, further analysis of inventory management and payables turnover is needed to provide a comprehensive assessment of Verisign Inc.'s activity ratios.
Long-term
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Fixed asset turnover | 6.40 | 6.14 | 5.29 | 5.15 | 4.92 |
| Total asset turnover | 0.85 | 0.82 | 0.67 | 0.72 | 0.66 |
Verisign Inc.'s long-term activity ratios indicate the efficiency with which the company utilizes its fixed assets and total assets to generate revenue over the past five years.
The fixed asset turnover has been showing a positive trend, increasing from 4.92 in 2019 to 6.40 in 2023. This suggests that Verisign has been able to generate more revenue relative to its investment in fixed assets, demonstrating improved efficiency in utilizing its long-term assets for revenue generation.
Similarly, the total asset turnover has also shown an upward trend, climbing from 0.66 in 2019 to 0.85 in 2023. This indicates that the company has been more effective in utilizing its total assets to generate revenue over the years.
Overall, the increasing trend in both fixed asset turnover and total asset turnover ratios reflects Verisign's ability to efficiently generate revenue from its long-term assets, showcasing improved operational efficiency and effective asset utilization in its business operations.