Amphastar P (AMPH)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Inventory turnover | 2.77 | 2.41 | 2.56 | 2.13 | 1.72 |
| Receivables turnover | 5.61 | 5.62 | 5.56 | 5.30 | 7.10 |
| Payables turnover | 11.53 | 12.20 | 10.72 | 8.48 | 7.60 |
| Working capital turnover | 2.44 | 1.76 | 2.04 | 2.09 | 1.95 |
The activity ratios of Amphastar Pharmaceuticals Inc provide insight into the efficiency of the company's operations in managing its inventory, receivables, payables, and working capital over the past five years.
1. Inventory Turnover:
Amphastar's inventory turnover has generally been increasing over the past five years, indicating that the company is selling its inventory more frequently. This trend suggests effective management of inventory levels and potentially reducing the risk of obsolete or excess inventory.
2. Receivables Turnover:
The receivables turnover has remained relatively stable over the years, indicating that the company has been efficient in collecting payments from customers. A consistent turnover ratio implies effective credit management and timely collection of accounts receivable.
3. Payables Turnover:
Amphastar Pharmaceuticals Inc has shown an increasing trend in payables turnover over the past five years, which suggests that the company is taking longer to pay its suppliers. This could positively impact cash flow management and working capital, as the company is extending its payment period.
4. Working Capital Turnover:
The working capital turnover ratio has fluctuated over the years but generally shows an increasing trend, indicating that the company is generating more revenue relative to its working capital. This implies efficient utilization of working capital resources to drive sales and operations.
Overall, the activity ratios of Amphastar Pharmaceuticals Inc reflect operational efficiency in managing inventory, receivables, payables, and working capital, with a focus on optimizing working capital utilization and maintaining stable collection processes.
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 | 131.72 | 151.16 | 142.31 | 171.15 | 211.79 |
| Days of sales outstanding (DSO) | days | 65.11 | 64.96 | 65.70 | 68.86 | 51.38 |
| Number of days of payables | days | 31.66 | 29.92 | 34.06 | 43.05 | 48.03 |
Amphastar Pharmaceuticals Inc's activity ratios provide insight into the efficiency of its inventory management, accounts receivable collection, and accounts payable practices.
1. Days of Inventory on Hand (DOH):
- The trend in DOH from 2019 to 2023 shows a gradual decrease, indicating improved inventory management efficiency.
- In 2019, the company took 211.79 days, on average, to clear its inventory, which has decreased to 131.72 days by the end of 2023.
- The decreasing trend suggests that the company may be selling inventory more quickly, potentially reducing carrying costs and minimizing the risk of inventory obsolescence.
2. Days of Sales Outstanding (DSO):
- DSO remained relatively stable over the five-year period, indicating consistent accounts receivable collection practices.
- The company took around 65 days, on average, to collect payments from customers.
- A stable DSO suggests that Amphastar Pharmaceuticals has a well-structured credit and collection policy in place.
3. Number of Days of Payables:
- The number of days of payables has seen fluctuations over the years but generally trended downwards from 48.03 days in 2019 to 31.66 days in 2023.
- A lower number of days of payables indicates that the company is paying its suppliers more quickly, which may improve relationships with suppliers but could also reduce the available cash for other uses.
Overall, the declining trend in Days of Inventory on Hand and a stable Days of Sales Outstanding ratio are positive indicators of efficient operations. However, careful monitoring is necessary to ensure that the reduction in Days of Payables does not impact liquidity or strain the company's cash flow.
Long-term
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Fixed asset turnover | 2.28 | 2.09 | 1.79 | 1.35 | 1.38 |
| Total asset turnover | 0.43 | 0.67 | 0.65 | 0.55 | 0.55 |
The fixed asset turnover ratio measures the efficiency with which a company generates revenue from its fixed assets. From 2019 to 2023, Amphastar Pharmaceuticals Inc's fixed asset turnover ratio has shown a general increasing trend, indicating that the company has been able to improve its ability to generate sales from its fixed assets over time. In 2019, the ratio was relatively low at 1.38, but it has steadily increased to 2.28 in 2023, which signifies that the company is utilizing its fixed assets more effectively to drive revenue.
On the other hand, the total asset turnover ratio measures a company's ability to generate sales from its total assets. The trend for this ratio has been more fluctuating compared to the fixed asset turnover ratio. From 2019 to 2023, the total asset turnover ratio peaked in 2022 at 0.67 and has since decreased to 0.43 in 2023. This decrease suggests that Amphastar Pharmaceuticals Inc may not be as efficient in generating sales from its total assets in the most recent period.
In conclusion, while the company has shown improvement in utilizing its fixed assets efficiently to generate revenue, there is a decline in the overall efficiency of generating sales from its total assets over the same period. This could indicate the need for further analysis to understand the factors contributing to these fluctuations in the long-term activity ratios of Amphastar Pharmaceuticals Inc.