Amphastar P (AMPH)

Short-term

Turnover ratios

Amphastar P's activity ratios provide insights into the efficiency with which the company manages its assets and liabilities.

1. Inventory Turnover:
- The inventory turnover ratio indicates how many times a company's inventory is sold and replaced over a period.
- From 2020 to 2024, Amphastar P's inventory turnover has shown some fluctuations, ranging from 2.13 to 2.77.
- A higher turnover ratio suggests that the company is efficiently managing its inventory levels, minimizing carrying costs and potential obsolescence.

2. Receivables Turnover:
- This ratio reflects how quickly a company collects outstanding receivables from its customers.
- Amphastar P's receivables turnover has remained relatively stable, hovering between 5.30 and 5.62 from 2020 to 2024.
- A higher turnover indicates that the company is effective in collecting payments from customers, reducing the risk of bad debts.

3. Payables Turnover:
- The payables turnover ratio measures how quickly a company pays its suppliers for goods and services.
- Amphastar P's payables turnover has shown an increasing trend over the years, rising from 8.48 in 2020 to 11.74 in 2024.
- A higher turnover ratio may suggest that the company is managing its payables efficiently, potentially negotiating favorable credit terms.

4. Working Capital Turnover:
- This ratio assesses how effectively a company utilizes its working capital to generate revenue.
- The working capital turnover for Amphastar P has fluctuated, with the highest value of 2.44 in 2023 and the lowest of 1.76 in 2022.
- A higher turnover ratio implies that the company is efficiently using its working capital to support its operations and drive growth.

In summary, the activity ratios of Amphastar P reflect its ability to manage inventory, collect receivables, pay suppliers, and utilize working capital efficiently over the analyzed period. It appears that the company has generally maintained stable or improving efficiency levels in these areas.

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Average number of days

Amphastar P's activity ratios provide insights into the efficiency of its operating cycle.

1. Days of Inventory on Hand (DOH):
- The company has shown a decreasing trend in DOH over the years, indicating an improvement in managing its inventory levels efficiently. In 2023, the DOH decreased significantly to 131.72 days from 171.15 days in 2020, reflecting a potential reduction in excess inventory holding costs and better inventory turnover.

2. Days of Sales Outstanding (DSO):
- The DSO has remained relatively stable over the years, ranging from 64.96 to 68.86 days. This suggests that the company has been consistent in collecting its accounts receivable from customers within a reasonable time frame. However, there is room for further improvement to shorten the collection cycle.

3. Number of Days of Payables:
- Amphastar P has managed to reduce its payables period significantly from 43.05 days in 2020 to 31.10 days in 2024. This indicates that the company is taking longer to pay its suppliers, potentially improving its cash flow position and working capital management.

Overall, the trends in these activity ratios suggest that Amphastar P has been working towards optimizing its operating cycle by efficiently managing its inventory levels, collecting receivables promptly, and strategically extending its payables period. Further improvements in these ratios can lead to enhanced operational efficiency and financial performance.

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Long-term

Amphastar P's long-term activity ratios provide insights into how efficiently the company is utilizing its assets to generate sales.

1. Fixed Asset Turnover: This ratio indicates the company's ability to generate sales from its investment in fixed assets such as property, plant, and equipment. From 2020 to 2024, the fixed asset turnover ratio has shown a consistent upward trend, increasing from 1.35 to 2.46. This suggests that the company is becoming more efficient in utilizing its fixed assets to drive sales, which is a positive sign of improved operational efficiency and asset utilization over the years.

2. Total Asset Turnover: The total asset turnover ratio measures how effectively the company is using all its assets to generate revenue. In this case, the total asset turnover ratio fluctuated over the period under review, with values of 0.55 in 2020, peaking at 0.67 in 2022, and then dropping to 0.46 in 2024. The decrease in 2023 and 2024 indicates that the company may not be as efficient in generating sales relative to its total asset base during those years.

Overall, while the fixed asset turnover ratio consistently improved over the period, the total asset turnover ratio showed more variability. This implies that while the company has been effectively utilizing its fixed assets to drive sales, there may have been challenges in maximizing sales from its total asset base in certain years. Further analysis would be needed to understand the factors contributing to these trends and to assess the overall operational efficiency and asset utilization of Amphastar P.