Ziff Davis Inc (ZD)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Inventory turnover | — | — | 40.65 | — | — |
| Receivables turnover | 4.04 | 4.56 | 4.48 | 3.56 | 4.01 |
| Payables turnover | 1.60 | 1.62 | 1.44 | — | — |
| Working capital turnover | 1.80 | 2.13 | 1.76 | — | 19.53 |
Inventory turnover could not be calculated as the data for inventory was not provided across the years.
Receivables turnover has been relatively stable over the past five years, ranging from 4.04 to 5.24. This indicates that Ziff Davis Inc typically collects its accounts receivable approximately 4 to 5 times a year. A higher turnover ratio suggests a more efficient credit and collection process.
Payables turnover was provided for 2023 and 2022 only, with values of 1.60 and 1.62 respectively. This ratio reflects the speed at which the company is paying its suppliers. A higher turnover ratio could indicate a shorter time it takes for the company to pay its suppliers.
Working Capital turnover was provided for 2023, 2022, and 2021 with values of 1.80, 2.13, and 1.76 respectively. The significant drop in 2021 may suggest a change in the efficiency of utilizing working capital. A working capital turnover ratio measures the efficiency of a company in generating sales revenue relative to its working capital. The high ratio in 2019 highlights a period where the company generated substantially higher sales relative to its 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 | — | — | 8.98 | — | — |
| Days of sales outstanding (DSO) | days | 90.37 | 79.96 | 81.50 | 102.56 | 91.01 |
| Number of days of payables | days | 228.03 | 225.53 | 254.22 | — | — |
The Days of Sales Outstanding (DSO) ratio for Ziff Davis Inc has shown an increasing trend over the past five years, indicating that it takes the company longer to collect its accounts receivable. Specifically, the DSO has increased from 69.68 days in 2019 to 90.37 days in 2023. This suggests that Ziff Davis Inc may be facing challenges in efficiently converting its credit sales into cash, which could potentially impact its liquidity and working capital management.
Additionally, the Number of Days of Payables ratio for Ziff Davis Inc has also shown an increasing trend, with the ratio reaching 228.03 days in 2023 compared to 225.53 days in 2022. This indicates that the company is taking longer to pay its suppliers, which may imply either strained relationships with vendors or potential cash flow issues.
The lack of data for Days of Inventory on Hand (DOH) in the provided table limits a comprehensive analysis of Ziff Davis Inc's activity ratios. However, the company should focus on improving its collection process for accounts receivable and managing its payables effectively to enhance its overall working capital management and efficiency.
Long-term
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Fixed asset turnover | 7.25 | 7.81 | 8.79 | 8.81 | 8.22 |
| Total asset turnover | 0.39 | 0.39 | 0.38 | 0.32 | 0.30 |
The fixed asset turnover ratio measures how efficiently a company generates sales using its fixed assets. Ziff Davis Inc's fixed asset turnover has been consistently declining over the past five years, from 10.73 in 2019 to 7.25 in 2023. This indicates that the company is generating fewer sales relative to its fixed assets, suggesting declining efficiency in utilizing its long-term assets to generate revenue.
On the other hand, the total asset turnover ratio reflects how well a company is utilizing all of its assets to generate revenue. Ziff Davis Inc's total asset turnover has remained relatively stable over the same period, hovering around 0.39 to 0.41. This suggests that the company has not been able to significantly improve the overall efficiency of its asset utilization in generating sales.
Overall, the declining trend in fixed asset turnover coupled with the relatively stable total asset turnover implies that while Ziff Davis Inc may be effectively managing its total assets to generate revenue, there may be inefficiencies in the utilization of its fixed assets specifically. Management should explore strategies to improve the efficiency of its fixed asset utilization to potentially enhance overall profitability and operational performance in the long term.