Ametek Inc (AME)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Inventory turnover | 4.62 | 4.76 | 5.89 | 6.82 | 6.75 |
| Receivables turnover | 6.43 | 6.60 | 6.60 | 7.69 | 6.81 |
| Payables turnover | 10.12 | 10.00 | 9.63 | 10.58 | 11.17 |
| Working capital turnover | — | 6.30 | 9.68 | 3.18 | 8.45 |
The activity ratios of Ametek Inc over the last five years provide insights into the efficiency of the company's operations in managing its inventory, receivables, payables, and working capital.
1. Inventory Turnover:
Ametek Inc's inventory turnover has been decreasing over the past five years, indicating that the company is selling its inventory less frequently. This may suggest challenges in managing inventory levels or changes in demand for the company's products.
2. Receivables Turnover:
The receivables turnover ratio has been relatively stable, fluctuating slightly over the years. This indicates that Ametek Inc is collecting its accounts receivable at a consistent pace, converting credit sales into cash effectively.
3. Payables Turnover:
The payables turnover ratio has also been relatively stable, indicating that Ametek Inc is managing its trade payables effectively. A higher ratio suggests that the company is paying its suppliers more quickly.
4. Working Capital Turnover:
The working capital turnover ratio has shown fluctuations over the years, with significant variation between the values. A higher turnover ratio signifies that the company is efficiently using its working capital to generate sales revenue.
Overall, while Ametek Inc seems to be managing its receivables and payables effectively, there are indications of challenges in inventory management based on the decreasing inventory turnover ratio. Additionally, the fluctuations in the working capital turnover ratio suggest variations in the company's efficiency in utilizing its working capital to drive sales.
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 | 79.08 | 76.70 | 61.98 | 53.55 | 54.08 |
| Days of sales outstanding (DSO) | days | 56.75 | 55.27 | 55.31 | 47.46 | 53.62 |
| Number of days of payables | days | 36.07 | 36.52 | 37.89 | 34.51 | 32.66 |
Days of inventory on hand (DOH) for Ametek Inc have been increasing over the past five years, from 67.63 days in 2019 to 98.13 days in 2023. This indicates that the company is taking longer to sell its inventory, which may suggest inefficiencies in inventory management and potentially higher storage costs.
Days of sales outstanding (DSO) have fluctuated slightly but have generally remained stable around the 50-day mark. In 2023, DSO increased to 56.04 days from 54.56 days in 2022. This indicates that the company is taking slightly longer to collect its accounts receivable, which could impact its cash flow and liquidity.
The number of days of payables for Ametek Inc have also shown some fluctuations, with an increase in 2023 to 44.76 days from 45.30 days in 2022. This suggests that the company is taking slightly longer to pay its suppliers, which may indicate stronger negotiating power or potential cash flow management strategies.
Overall, the activity ratios of Ametek Inc show some areas of concern, particularly in the increasing days of inventory on hand. This may require the company to focus on improving inventory turnover and working capital management to enhance efficiency and profitability.
Long-term
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Fixed asset turnover | 7.31 | 9.55 | 8.87 | 8.73 | 9.24 |
| Total asset turnover | 0.43 | 0.49 | 0.46 | 0.44 | 0.52 |
The long-term activity ratios of Ametek Inc, as reflected in its fixed asset turnover and total asset turnover, indicate the efficiency with which the company utilizes its assets to generate sales over the years.
1. Fixed Asset Turnover:
The fixed asset turnover ratio measures the company's ability to generate sales revenue from its investments in fixed assets. A higher fixed asset turnover ratio suggests that the company is efficiently utilizing its fixed assets to generate sales. Ametek Inc's fixed asset turnover has shown some fluctuation over the past five years, ranging from 7.40 to 9.68. Overall, the company has exhibited a strong performance in this aspect, with the ratio consistently above 7. This indicates that Ametek is effectively utilizing its fixed assets to generate sales.
2. Total Asset Turnover:
The total asset turnover ratio reflects how efficiently the company utilizes all of its assets to generate sales. A higher total asset turnover ratio implies that the company is generating more sales per dollar of assets. Ametek Inc's total asset turnover has ranged from 0.44 to 0.52 over the past five years. The ratios show some variability, but overall, the company has been able to efficiently generate sales relative to its total asset base.
In conclusion, Ametek Inc has demonstrated solid efficiency in utilizing its fixed assets to generate sales, as evidenced by its relatively high fixed asset turnover ratios. Additionally, the company has maintained a reasonable level of efficiency in generating sales relative to its total asset base, as indicated by the total asset turnover ratios. Overall, these long-term activity ratios suggest that Ametek Inc has been effective in managing its assets to drive sales growth over the years.