Clear Secure Inc (YOU)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | |
|---|---|---|---|
| Inventory turnover | 11.08 | 14.61 | 14.27 |
| Receivables turnover | 1,168.82 | 373.82 | 47.57 |
| Payables turnover | 35.41 | 56.17 | 31.60 |
| Working capital turnover | 2.82 | 1.27 | 0.65 |
Clear Secure Inc's inventory turnover has decreased from 14.61 in 2022 to 11.08 in 2023, indicating that the company took longer to sell its inventory during the period. The decline in inventory turnover may suggest inefficient inventory management or potential issues with sales volume.
On the other hand, the receivables turnover ratio has significantly improved, increasing from 373.82 in 2022 to 1,168.82 in 2023. This substantial increase indicates that the company collected its outstanding receivables at a much faster rate in 2023 compared to the prior year, which is a positive sign of effective credit management or a more efficient collection process.
The payables turnover ratio also decreased from 56.17 in 2022 to 35.41 in 2023, indicating that the company took longer to pay its suppliers during the year. This could be due to changes in payment terms or liquidity constraints.
Lastly, Clear Secure Inc's working capital turnover ratio has shown improvement, increasing from 1.27 in 2022 to 2.82 in 2023. This suggests that the company generated more revenue relative to its working capital in 2023, which is favorable as it indicates increased efficiency in utilizing its working capital to drive sales.
Overall, while the company experienced varying trends in its activity ratios, close monitoring of these ratios is necessary to identify areas of operational improvement and potential challenges in managing working capital, inventory, receivables, and payables effectively.
Average number of days
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 32.95 | 24.98 | 25.57 |
| Days of sales outstanding (DSO) | days | 0.31 | 0.98 | 7.67 |
| Number of days of payables | days | 10.31 | 6.50 | 11.55 |
Activity ratios help in measuring how efficiently a company manages its assets and liabilities to generate revenue. Let's analyze the activity ratios of Clear Secure Inc based on the provided data:
1. Days of Inventory on Hand (DOH):
- In 2023, Clear Secure Inc had an increase in DOH compared to 2022, indicating that inventory was held for a longer period before being sold.
- The increase in DOH from 2021 to 2022 suggests a slightly less efficient management of inventory.
- A high DOH value could imply potential issues with slow-moving inventory or overstocking, which may tie up capital and impact profitability.
2. Days of Sales Outstanding (DSO):
- The DSO decreased significantly from 2021 to 2022, reflecting an improvement in collecting sales revenues promptly.
- In 2023, there was a further improvement in DSO, indicating more efficient management of accounts receivable.
- A lower DSO generally indicates faster collection of receivables, which enhances cash flow and liquidity for the company.
3. Number of Days of Payables:
- Clear Secure Inc saw an increase in the number of days of payables from 2022 to 2023, suggesting that the company took longer to pay its suppliers.
- The decrease in payables days from 2021 to 2022 might indicate the company was trying to manage its payables more efficiently.
- Managing payables effectively could help in optimizing working capital and maintaining good relationships with suppliers.
Overall, the trend in these activity ratios indicates that Clear Secure Inc has been making some improvements in managing its inventory, receivables, and payables. However, it is important for the company to strike a balance between these components to ensure optimal efficiency in its operations and financial performance.
Long-term
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | |
|---|---|---|---|
| Fixed asset turnover | 9.82 | 7.54 | 5.70 |
| Total asset turnover | 0.59 | 0.42 | 0.31 |
Clear Secure Inc's long-term activity ratios have shown a positive trend over the past three years. The fixed asset turnover ratio has steadily increased from 5.70 in 2021 to 7.54 in 2022 and further to 9.82 in 2023. This indicates that the company is generating more sales revenue per dollar invested in fixed assets, reflecting improved efficiency in utilizing its long-term assets.
Similarly, the total asset turnover ratio has also shown significant improvement, increasing from 0.31 in 2021 to 0.42 in 2022 and further to 0.59 in 2023. This indicates that Clear Secure Inc has been able to generate more sales revenue per dollar of total assets over the years, suggesting increased efficiency in managing its total asset base.
Overall, the upward trend in both fixed asset turnover and total asset turnover ratios reflects Clear Secure Inc's ability to efficiently utilize its long-term assets to generate revenue, which is a positive indicator of the company's operational effectiveness and financial performance.