Amphenol Corporation (APH)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Inventory turnover | 3.96 | 3.91 | 4.11 | 3.95 | 4.06 |
| Receivables turnover | 4.63 | 4.79 | 4.80 | 4.43 | 4.41 |
| Payables turnover | 5.54 | 6.27 | 6.57 | 5.70 | 5.30 |
| Working capital turnover | 2.72 | 3.41 | 3.32 | 3.10 | 2.70 |
Amphenol Corporation's inventory turnover has displayed a stable trend over the years, ranging between 3.91 and 4.11. This indicates that the company efficiently manages its inventory levels, with a moderate turnover rate.
The receivables turnover ratio has shown a slight increase from 4.41 in 2020 to 4.63 in 2024. This suggests that the company is collecting its receivables at a slightly faster pace, which can be a positive sign for its cash flow management.
In terms of payables turnover, Amphenol has seen fluctuations in this ratio, reaching a peak of 6.57 in 2022 but decreasing to 5.54 in 2024. This could indicate changes in the company's payment practices with its suppliers.
The working capital turnover ratio has fluctuated over the years, varying from 2.70 to 3.41. A higher turnover ratio implies that the company is efficiently utilizing its working capital to generate sales, while a lower ratio may indicate inefficient use of working capital.
Overall, analyzing these activity ratios provides insights into Amphenol Corporation's effectiveness in managing its inventory, receivables, payables, and working capital to support its operations 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 | 92.15 | 93.38 | 88.91 | 92.49 | 89.93 |
| Days of sales outstanding (DSO) | days | 78.84 | 76.12 | 76.09 | 82.38 | 82.84 |
| Number of days of payables | days | 65.86 | 58.21 | 55.59 | 64.07 | 68.92 |
Based on the provided data for Amphenol Corporation, let's analyze the activity ratios:
1. Days of Inventory on Hand (DOH):
- The Days of Inventory on Hand measures the number of days it takes for Amphenol Corporation to sell its inventory.
- The trend shows an increase from 89.93 days in 2020 to 92.15 days in 2024, indicating that the company is holding onto its inventory slightly longer over the years.
- This could imply inefficiencies in inventory management or changes in the company's sales patterns.
2. Days of Sales Outstanding (DSO):
- The Days of Sales Outstanding ratio indicates how long it takes Amphenol Corporation to collect its accounts receivable.
- The trend shows a slight decrease from 82.84 days in 2020 to 78.84 days in 2024, suggesting an improvement in the collection of accounts receivable efficiency.
- A lower DSO can signify effective credit policies and efficient collection procedures.
3. Number of Days of Payables:
- The Number of Days of Payables ratio represents the number of days it takes Amphenol Corporation to pay its suppliers.
- The trend reveals fluctuations, starting from 68.92 days in 2020, decreasing to 55.59 days in 2022, before rising again to 65.86 days in 2024.
- A decrease in this ratio may imply a better negotiating position with suppliers, while an increase may indicate a strain on cash flow or changes in payment terms.
In conclusion, while the Days of Inventory on Hand have increased slightly over the years, the Days of Sales Outstanding have decreased, reflecting better collection efficiency. The fluctuations in the Number of Days of Payables ratio suggest varying dynamics in the company's supplier payment practices. Monitoring and managing these activity ratios can provide valuable insights into Amphenol Corporation's operational efficiency and working capital management.
See also:
Long-term
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Fixed asset turnover | 8.89 | 9.55 | 10.48 | 9.25 | 8.15 |
| Total asset turnover | 0.71 | 0.76 | 0.82 | 0.74 | 0.70 |
Amphenol Corporation's long-term activity ratios exhibit certain trends over the five-year period analyzed.
The Fixed Asset Turnover ratio, which reflects the company's ability to generate sales from its investment in fixed assets, has generally shown an increasing trend from 8.15 in 2020 to a peak of 10.48 in 2022, before slightly decreasing to 8.89 in 2024. This indicates that the company has become more efficient in utilizing its fixed assets to generate sales over the years.
On the other hand, the Total Asset Turnover ratio, measuring the company's efficiency in generating sales from all its assets, has fluctuated over the period. Starting at 0.70 in 2020, the ratio increased to 0.82 in 2022 before declining to 0.71 in 2024. Despite the fluctuations, the company has been able to maintain a relatively stable level of sales generated per dollar of total assets.
Overall, the trends in both ratios suggest that Amphenol Corporation has been successful in improving its efficiency in utilizing both fixed and total assets to generate sales, although there have been some fluctuations in performance over the years.