Albany International Corporation (AIN)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Inventory turnover | 5.58 | 5.90 | 6.12 | 6.41 | 6.90 |
| Receivables turnover | 3.65 | 4.60 | 4.18 | 4.06 | 4.42 |
| Payables turnover | 10.86 | 11.78 | 10.46 | 14.41 | 10.07 |
| Working capital turnover | 1.79 | 1.64 | 1.66 | 1.65 | 2.54 |
Albany International Corp.'s activity ratios provide insight into the efficiency of its inventory management, collection of receivables, payment of payables, and utilization of working capital over the last five years.
1. Inventory turnover: The company's inventory turnover has shown a declining trend from 6.90 in 2019 to 4.27 in 2023. This suggests that Albany International Corp. is taking longer to sell its inventory, which could indicate potential issues with demand forecasting or excess inventory levels.
2. Receivables turnover: The receivables turnover ratio demonstrates how quickly the company collects its accounts receivable. While the ratio has fluctuated over the years, it has generally remained stable, with a slight decrease in 2023 to 3.99. This indicates that Albany International Corp. is collecting its receivables at a slightly slower pace compared to previous years.
3. Payables turnover: The payables turnover ratio reflects how efficiently the company pays its suppliers. Albany International Corp. has shown a decreasing trend in payables turnover from 10.07 in 2019 to 8.31 in 2023. A lower ratio could suggest that the company is taking longer to pay its suppliers, which may impact supplier relationships or indicate liquidity issues.
4. Working capital turnover: The working capital turnover ratio measures how effectively the company utilizes its working capital to generate sales. Albany International Corp.'s working capital turnover has decreased over the years, from 2.54 in 2019 to 1.82 in 2023. This trend suggests that the company's sales generated per unit of working capital have been declining, indicating a potential inefficiency in managing its working capital.
In conclusion, Albany International Corp. should closely monitor its activity ratios, particularly inventory turnover and working capital turnover, to improve operational efficiency and maintain healthy liquidity and cash flow.
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 | 65.45 | 61.82 | 59.65 | 56.90 | 52.91 |
| Days of sales outstanding (DSO) | days | 99.95 | 79.37 | 87.23 | 89.90 | 82.62 |
| Number of days of payables | days | 33.62 | 30.99 | 34.89 | 25.33 | 36.26 |
Activity ratios provide insight into how efficiently a company is managing its resources. Let's analyze Albany International Corp.'s activity ratios based on the provided information.
1. Days of Inventory on Hand (DOH):
- The trend in DOH shows an increasing trend from 2019 to 2023, indicating that the company is taking longer to sell its inventory.
- Higher DOH could suggest inefficiencies in inventory management, such as overstocking or slow-moving inventory.
- Albany International Corp. should consider optimizing its inventory levels to improve liquidity and reduce holding costs.
2. Days of Sales Outstanding (DSO):
- DSO represents the average number of days it takes for the company to collect revenue from its credit sales.
- The fluctuating trend in DSO suggests variations in the company's accounts receivable collection efficiency over the years.
- Higher DSO values indicate potential issues with credit policies or customer payment delays, impacting cash flow.
3. Number of Days of Payables:
- The number of days of payables indicates the average time it takes for the company to pay its suppliers.
- Albany International Corp. has seen fluctuations in its payables days over the years, indicating changes in payment practices.
- A longer period of payables may signify favorable payment terms negotiated with suppliers or potential cash flow management strategies.
In conclusion, Albany International Corp. should focus on improving its inventory turnover, streamlining accounts receivable collection processes, and effectively managing payables to enhance overall operational efficiency and optimize working capital management.
Long-term
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Fixed asset turnover | 1.87 | 2.31 | 2.09 | 1.94 | 2.26 |
| Total asset turnover | 0.61 | 0.63 | 0.59 | 0.56 | 0.71 |
Albany International Corp.'s long-term activity ratios reflect its efficiency in utilizing fixed assets and total assets to generate sales revenue. The fixed asset turnover ratio has decreased from 2.32 in 2022 to 1.91 in 2023 but remains relatively stable over the past five years, indicating that the company is generating $1.91 in sales for every dollar invested in fixed assets. This suggests a decline in the efficiency of using fixed assets to generate revenue in the most recent year.
On the other hand, the total asset turnover ratio has remained consistent at 0.63 for 2023 and 2022, showing a consistent trend over the past five years. This ratio indicates that Albany International Corp. generates $0.63 in sales for every dollar of total assets. Although the total asset turnover ratio is relatively stable, it is lower than the industry average, suggesting potential inefficiencies in asset utilization compared to industry peers.
Overall, while the company has shown stability in its total asset turnover, there are indications of decreasing efficiency in utilizing fixed assets to generate sales revenue. It is important for Albany International Corp. to assess its asset management strategies to improve efficiency and maximize returns on assets across its operations.