Allegion PLC (ALLE)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Inventory turnover | 4.97 | 4.72 | 4.07 | 4.37 | 5.44 |
| Receivables turnover | — | — | — | — | — |
| Payables turnover | — | — | — | — | — |
| Working capital turnover | 5.20 | 12.98 | 6.40 | 5.55 | 4.36 |
Allegion PLC's inventory turnover ratio has shown a slight decline over the years, indicating that the company is taking longer to sell its inventory. The ratios have decreased from 5.44 in 2020 to 4.97 in 2024. This downward trend could suggest potential inventory management issues or slower sales.
The receivables turnover ratio is not provided for any of the years, indicating that specific data on how quickly the company collects its receivables is not available. Without this information, it is challenging to assess Allegion's efficiency in collecting outstanding payments from customers.
Similarly, payables turnover data is unavailable for any of the years, making it difficult to evaluate how effectively Allegion is managing its payables and its relationships with suppliers.
The working capital turnover ratio has fluctuated during the period under consideration, with a notable increase in 2023. This could indicate a more efficient utilization of working capital to generate sales during that year. However, the ratio decreased in subsequent years, suggesting a potential decline in the company's ability to convert working capital into revenue.
Overall, Allegion PLC's activity ratios reveal mixed performance in managing its inventory, working capital, and collection of receivables/payables. It would be beneficial for the company to focus on improving inventory turnover and working capital utilization to enhance overall operational efficiency and financial performance.
Average number of days
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 73.39 | 77.35 | 89.68 | 83.52 | 67.05 |
| Days of sales outstanding (DSO) | days | — | — | — | — | — |
| Number of days of payables | days | — | — | — | — | — |
Allegion PLC's Days of Inventory on Hand (DOH) increased from 67.05 days in 2020 to 89.68 days in 2022, indicating a rise in the number of days it takes to sell its inventory. However, it decreased to 73.39 days by the end of 2024, which might suggest more efficient inventory management.
For Days of Sales Outstanding (DSO) and Number of Days of Payables, the data is not provided for the years from 2020 to 2024, indicating that specific information on these ratios is not available for analysis.
Overall, monitoring these activity ratios - especially DOH - is important for Allegion PLC to assess its inventory management efficiency and its impact on the company's operations and financial performance.
Long-term
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Fixed asset turnover | — | — | 10.60 | 10.11 | 9.22 |
| Total asset turnover | 0.84 | 0.85 | 0.82 | 0.94 | 0.89 |
The fixed asset turnover ratio measures how efficiently a company utilizes its fixed assets to generate revenue. Allegion PLC's fixed asset turnover has improved steadily over the years, increasing from 9.22 in 2020 to 10.60 in 2022. This indicates that Allegion has been able to generate more revenue relative to its investment in fixed assets.
Total asset turnover, on the other hand, measures how effectively a company is using its total assets to generate revenue. Allegion PLC's total asset turnover ratio has fluctuated slightly over the years, with a peak of 0.94 in 2021 and a low of 0.82 in 2022. This suggests that Allegion's ability to generate revenue from its total assets has varied, possibly due to changes in business operations or asset utilization efficiency.
Overall, Allegion PLC's long-term activity ratios indicate that the company has been relatively efficient in using its fixed assets to generate revenue, although there has been some variability in its ability to generate revenue from its total assets. It would be important to further investigate the factors contributing to these fluctuations to assess the company's overall operational efficiency and asset utilization.