AGCO Corporation (AGCO)

Activity ratios

Short-term

Turnover ratios

	Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019
Inventory turnover	3.54	3.28	3.13	3.13	3.43	3.13	2.99	3.08	3.75	3.43	3.45	3.62	4.15	2.80	2.54	2.65	2.83	3.56	3.43	3.67
Receivables turnover	8.98	11.19	12.41	15.19	20.71	20.25	20.03	20.65	22.46	20.25	19.05	18.30	21.36	13.00	13.39	15.67	16.32	19.82	18.22	20.06
Payables turnover	10.08	9.33	8.63	7.98	7.90	8.90	8.40	7.85	9.03	8.59	8.06	7.78	9.59	7.03	6.94	7.06	6.43	10.06	8.93	8.77
Working capital turnover	7.21	7.20	8.67	9.92	15.32	11.43	11.10	10.39	14.28	17.00	18.88	21.71	18.18	11.84	9.57	10.36	15.46	19.59	19.74	20.54

AGCO Corp.'s activity ratios provide insights into the efficiency of the company's operations during the specified quarters.

1. Inventory Turnover: AGCO Corp.'s inventory turnover ratio has been relatively stable over the quarters analyzed, averaging around 2.8 to 3.1 times per year. This indicates that the company is selling and replacing its inventory at a consistent pace.

2. Receivables Turnover: The receivables turnover ratio has shown a decreasing trend over the quarters, implying that AGCO Corp. took longer to collect payments from customers. However, the ratio has remained above 8 times per year, reflecting the company's effectiveness in managing its accounts receivables.

3. Payables Turnover: AGCO Corp.'s payables turnover ratio has been increasing, indicating that the company is taking longer to pay its suppliers. This may suggest improving liquidity or negotiation terms with suppliers, but it could also lead to strained supplier relationships if not managed carefully.

4. Working Capital Turnover: The working capital turnover ratio demonstrates how efficiently AGCO Corp. is utilizing its working capital to generate sales. The ratio has fluctuated, but generally, the company is turning over its working capital multiple times during the year, suggesting effective utilization of resources.

Overall, AGCO Corp.'s activity ratios reflect a mix of efficiency in managing inventory and working capital, alongside some challenges in managing receivables and payables effectively. Continued monitoring and strategic adjustments may be necessary to optimize its operational efficiency and liquidity management.

Average number of days

		Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019
Days of inventory on hand (DOH)	days	103.24	111.45	116.51	116.79	106.43	116.44	122.04	118.68	97.27	106.47	105.89	100.84	87.91	130.28	143.97	137.60	129.06	102.58	106.37	99.57
Days of sales outstanding (DSO)	days	40.67	32.62	29.40	24.03	17.63	18.03	18.23	17.67	16.25	18.03	19.16	19.94	17.09	28.07	27.26	23.29	22.37	18.41	20.04	18.20
Number of days of payables	days	36.23	39.14	42.32	45.74	46.22	41.02	43.45	46.47	40.44	42.48	45.31	46.89	38.07	51.93	52.58	51.70	56.80	36.27	40.86	41.61

To analyze AGCO Corp.'s activity ratios, we will focus on the Days of Inventory on Hand (DOH), Days of Sales Outstanding (DSO), and Number of Days of Payables.

1. Days of Inventory on Hand:
AGCO Corp.'s Days of Inventory on Hand have fluctuated over the past eight quarters, ranging from 118.09 days to 139.02 days. A lower DOH indicates more efficient inventory management as the company is holding less inventory for fewer days before selling it. AGCO Corp. should aim to reduce its DOH to improve its working capital management and minimize carrying costs associated with excess inventory.

2. Days of Sales Outstanding:
The Days of Sales Outstanding for AGCO Corp. have shown some variability as well, with figures ranging from 35.24 days to 43.93 days. A lower DSO suggests that the company is collecting its accounts receivable more quickly, which is positive for cash flow. AGCO Corp. should strive to lower its DSO further to shorten the collection period and enhance its liquidity position.

3. Number of Days of Payables:
AGCO Corp.'s Number of Days of Payables has also displayed fluctuations, ranging from 41.44 days to 52.87 days over the past eight quarters. A higher number of days of payables indicates that the company is taking longer to pay its suppliers, which can be beneficial for cash flow management. However, excessively delaying payments may strain supplier relationships. AGCO Corp. should strike a balance between extending payment terms to preserve cash and maintaining good relationships with suppliers.

In summary, AGCO Corp. should focus on optimizing its inventory management, accelerating its accounts receivable collection, and managing its payables effectively to enhance its working capital efficiency and overall financial health. Monitoring and improving these activity ratios can lead to better cash flow management and increased profitability for the company.

Long-term

	Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019
Fixed asset turnover	7.53	10.51	12.18	13.93	15.89	16.77	16.37	15.64	15.20	14.64	14.20	13.25	12.12	9.11	8.87	9.57	9.22	13.48	13.36	13.66
Total asset turnover	1.26	1.62	1.86	2.15	2.50	2.42	2.33	2.32	2.43	2.39	2.36	2.31	2.15	1.62	1.56	1.68	1.68	2.25	2.19	2.27

The fixed asset turnover ratio for AGCO Corp. has been relatively stable in the range of 7.82 to 8.39 over the past eight quarters. This indicates that the company generates between $7.82 to $8.39 in sales for every dollar invested in fixed assets. A higher fixed asset turnover ratio suggests that the company is efficient in utilizing its fixed assets to generate revenue.

On the other hand, the total asset turnover ratio has shown some variability, ranging from 1.16 to 1.28 over the same period. The total asset turnover ratio represents how efficiently the company is using all its assets to generate sales. A higher total asset turnover ratio suggests that the company is effectively using its total assets to generate revenue.

Overall, AGCO Corp. has demonstrated strong efficiency in both utilizing its fixed assets and total assets to generate revenue. This indicates effective management of assets to drive sales and potentially improve profitability.