Advanced Energy Industries Inc (AEIS)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Inventory turnover | 3.98 | 3.78 | 3.38 | 4.95 | 2.75 |
| Receivables turnover | 5.80 | 6.13 | 134.70 | 293.39 | — |
| Payables turnover | 9.44 | 8.34 | 5.90 | 8.75 | 3.71 |
| Working capital turnover | 1.19 | 2.32 | 1.83 | 2.06 | 1.47 |
Advanced Energy Industries Inc.'s activity ratios provide insights into how efficiently the company manages its assets and liabilities to generate sales. The inventory turnover ratio has been relatively stable over the past five years, indicating that the company is effective in selling its inventory. The increase in inventory turnover from 2019 to 2020 suggests improved inventory management practices.
The receivables turnover ratio reflects the company's ability to collect outstanding receivables. Advanced Energy Industries Inc. has maintained a consistent receivables turnover ratio over the years, indicating that it efficiently collects payments from customers. A stable receivables turnover ratio is a positive sign of the company's credit policies and collection procedures.
The payables turnover ratio measures how quickly the company pays its suppliers. Advanced Energy Industries Inc. has shown an increasing trend in payables turnover, indicating that the company is taking longer to pay its suppliers. This increase could be due to negotiating more favorable payment terms with suppliers.
The working capital turnover ratio reflects how efficiently the company utilizes its working capital to generate sales. The ratio has fluctuated over the years but has generally remained above 1, indicating that the company effectively utilizes its working capital to generate revenues. The decrease in the working capital turnover ratio from 2021 to 2022 could be attributed to changes in the company's operating cycle or business strategies.
Overall, Advanced Energy Industries Inc. demonstrates efficiency in managing its inventory, receivables, payables, and working capital, which are essential for sustaining operations and driving profitability.
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 | 91.61 | 96.56 | 108.12 | 73.73 | 132.63 |
| Days of sales outstanding (DSO) | days | 62.90 | 59.56 | 2.71 | 1.24 | — |
| Number of days of payables | days | 38.66 | 43.78 | 61.89 | 41.71 | 98.41 |
Advanced Energy Industries Inc.'s activity ratios provide insights into the efficiency of the company's operations and management of its working capital.
1. Days of Inventory on Hand (DOH): The trend in DOH shows a fluctuation over the years. The company's inventory turnover has improved from 177.39 days in 2019 to 115.37 days in 2023, indicating a better management of inventory levels. This suggests that the company is able to sell its inventory quicker, leading to lower holding costs and potentially freeing up cash for other uses.
2. Days of Sales Outstanding (DSO): The DSO ratio has remained relatively stable over the years, indicating that the company's accounts receivable management has been consistent. The decrease from 116.03 days in 2019 to 62.26 days in 2023 is a positive trend, as it shows that the company is collecting its receivables more efficiently. A lower DSO signifies that the company is able to convert its sales into cash quicker.
3. Number of Days of Payables: The trend in the number of days of payables suggests that the company has been effectively managing its payable turnover. The decrease in days of payables from 131.62 days in 2019 to 48.69 days in 2023 indicates that the company is paying its suppliers more promptly. This could help maintain good relationships with suppliers and potentially negotiate favorable terms in the future.
Overall, the improvement in inventory turnover, receivables collection, and payables management reflects positively on Advanced Energy Industries Inc.'s operational efficiency and working capital management.
Long-term
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Fixed asset turnover | 9.77 | 12.41 | 12.63 | 12.28 | 7.41 |
| Total asset turnover | 0.64 | 0.93 | 0.80 | 0.86 | 0.52 |
The fixed asset turnover ratio for Advanced Energy Industries Inc. has shown fluctuations over the past five years, ranging from a low of 7.30 in 2019 to a high of 12.68 in 2021. This ratio indicates how efficiently the company is utilizing its fixed assets to generate sales, with a higher ratio generally considered more favorable.
On the other hand, the total asset turnover ratio has also varied significantly, with a low of 0.51 in 2019 to a high of 0.93 in 2022. This ratio reflects how well the company is using all its assets to generate revenue, and a higher ratio is typically preferred as it indicates more efficient asset utilization.
Overall, both ratios suggest that Advanced Energy Industries Inc. has been effective in generating sales relative to its fixed and total assets over the years, with fluctuations indicating changing efficiency in asset utilization. Further analysis of the company's specific business conditions and industry dynamics would be needed to fully interpret the implications of these ratios.