Amgen Inc (AMGN)

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	1.88	3.07	3.02	2.93	2.92	2.99	3.14	3.29	3.54	3.02	2.64	2.23	1.89	1.78	1.68	1.62	1.54	1.63	1.70	1.82
Receivables turnover	3.27	3.00	3.17	3.20	2.92	9.59	9.60	10.13	8.80	5.35	5.69	5.69	4.78	6.10	4.53	4.78	5.02	6.49	6.20	6.30
Payables turnover	11.26	11.35	12.41	11.11	9.17	11.83	11.38	10.33	10.59	10.70	8.49	6.42	5.17	6.04	5.60	4.46	4.02	5.24	5.39	5.03
Working capital turnover	2.18	0.58	0.61	0.60	2.87	5.25	7.63	9.12	7.13	2.67	5.65	2.99	2.68	1.97	1.96	3.43	4.17	1.15	1.17	1.06

Inventory turnover for AMGEN Inc. has fluctuated over the past eight quarters, ranging from a low of 0.89 in Q4 2023 to a high of 1.48 in Q1 2022. This indicates that the company is managing its inventory less efficiently in Q4 2023 compared to previous quarters.

Receivables turnover has also varied, with values ranging from 3.79 in Q4 2023 to 5.18 in Q1 2022. The downward trend in receivables turnover suggests that AMGEN Inc. is taking longer to collect payments from customers in recent quarters.

Payables turnover has been relatively stable, fluctuating between 4.08 and 5.67 over the same period. This implies that the company is maintaining a consistent payment schedule with its suppliers.

Working capital turnover, which measures how efficiently a company is using its working capital to generate revenue, has shown significant variability. The ratio ranged from 0.85 in Q3 2023 to 4.67 in Q1 2022, indicating fluctuations in the company's ability to generate revenue using its current assets.

Overall, AMGEN Inc. should focus on improving inventory and receivables turnover to enhance operational efficiency and cash flow management. Consistent payables turnover suggests the company is effectively managing its payables. The fluctuations in working capital turnover may warrant further investigation into the company's working capital management strategies.

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	194.11	118.99	120.83	124.75	124.82	121.95	116.31	111.05	103.07	121.01	138.46	163.62	193.51	205.11	217.47	225.19	237.24	224.61	215.03	200.66
Days of sales outstanding (DSO)	days	111.60	121.73	115.26	113.90	125.10	38.04	38.02	36.05	41.49	68.28	64.15	64.15	76.43	59.80	80.60	76.29	72.68	56.26	58.88	57.95
Number of days of payables	days	32.43	32.15	29.42	32.86	39.80	30.87	32.08	35.32	34.46	34.13	42.97	56.86	70.63	60.41	65.13	81.83	90.75	69.61	67.77	72.59

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

1. Days of Inventory on Hand (DOH):
- The DOH measures how many days, on average, inventory is held before being sold.
- The trend shows an increase in DOH from Q1 2023 to Q4 2023, indicating that inventory is being held for a longer period.
- This could suggest issues with inventory management, such as overstocking or slowing sales, which may tie up capital and increase holding costs.

2. Days of Sales Outstanding (DSO):
- DSO reflects the average number of days it takes for the company to collect revenue after a sale is made.
- The trend shows a slight increase in DSO from Q1 2022 to Q4 2023, which suggests a lengthening of the collection period.
- This could indicate difficulties in collecting receivables promptly, potentially affecting cash flow and working capital management.

3. Number of Days of Payables:
- This ratio indicates the average number of days a company takes to pay its suppliers.
- The trend shows fluctuations in the number of days of payables throughout the quarters, with no clear consistent pattern.
- A higher number of days of payables may imply that AMGEN Inc. is taking longer to pay its suppliers, which could impact supplier relationships but may also provide short-term cash flow benefits.

Overall, AMGEN Inc. should closely monitor its activity ratios to ensure efficient management of inventory, timely collection of receivables, and balanced payment terms with suppliers. Identifying and addressing any inefficiencies in these areas can help enhance operational performance and financial health.

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	4.37	3.31	3.34	3.37	3.44	9.85	9.92	10.00	9.91	5.11	5.19	5.18	5.20	5.19	5.02	4.91	4.74	4.77	4.83	4.85
Total asset turnover	0.27	0.20	0.20	0.21	0.29	0.80	0.86	0.87	0.84	0.39	0.43	0.40	0.40	0.39	0.37	0.39	0.39	0.39	0.40	0.37

AMGEN Inc.'s long-term activity ratios provide insights into the efficiency of the company's utilization of its fixed assets and total assets. The fixed asset turnover ratio has been relatively stable over the past eight quarters, ranging from 4.74 to 5.12. This indicates that AMGEN is generating revenues efficiently from its fixed assets, with an average turnover rate of approximately 4.92 over this period. A high fixed asset turnover ratio suggests that the company is effectively using its property, plant, and equipment to generate sales.

On the other hand, the total asset turnover ratio has shown a decreasing trend, declining from 0.44 in Q1 2022 to 0.29 in Q4 2023. This implies that the company is generating fewer sales relative to its total assets. The average total asset turnover ratio over these quarters is approximately 0.35. A lower total asset turnover ratio may indicate that the company could be carrying excessive assets on its balance sheet relative to its sales volume.

In comparison, the fixed asset turnover ratio remains relatively high and stable, suggesting that AMGEN is efficiently utilizing its fixed assets to generate revenue. However, the declining trend in the total asset turnover ratio raises concerns about the overall efficiency of the company in generating sales from its total assets. Further analysis of the factors contributing to these trends, such as changes in business operations or asset management strategies, would be needed to understand the dynamics behind these ratios fully.