Aptiv PLC (APTV)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Inventory turnover | 8.12 | 7.23 | 7.48 | 8.58 | 9.11 |
| Receivables turnover | 5.26 | 4.79 | 5.15 | 4.33 | 5.07 |
| Payables turnover | 6.09 | 5.37 | 5.10 | 4.33 | 4.75 |
| Working capital turnover | 5.83 | 5.99 | 3.69 | 3.82 | 11.35 |
Aptiv PLC's inventory turnover has shown a generally increasing trend over the years, indicating that the company is managing its inventory efficiently by selling and replacing its inventory more frequently. This suggests effective inventory management strategies.
The receivables turnover ratio has also exhibited an upward trend, implying that the company is collecting its accounts receivable more efficiently. This can be a positive indicator of the company's credit policies and collection efforts.
The payables turnover ratio has shown some fluctuations over the years but has generally remained stable. This indicates that the company is paying its suppliers at a relatively consistent rate, which could reflect the company's ability to manage its payment obligations effectively.
The working capital turnover ratio has shown significant variability, with a sharp decrease in 2021 compared to the previous and following years. A high working capital turnover ratio generally indicates efficient utilization of working capital to generate sales. The sharp decrease in 2021 may warrant further investigation to understand the underlying causes.
Overall, the activity ratios for Aptiv PLC suggest that the company has generally been managing its inventory, receivables, payables, and working capital efficiently over the years, with some areas showing room for improvement or closer monitoring.
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 | 44.98 | 50.51 | 48.83 | 42.55 | 40.08 |
| Days of sales outstanding (DSO) | days | 69.45 | 76.13 | 70.86 | 84.25 | 71.92 |
| Number of days of payables | days | 59.92 | 68.00 | 71.59 | 84.34 | 76.77 |
Activity ratios provide insight into how efficiently a company manages its assets and liabilities. In the case of Aptiv PLC, we can analyze the Days of Inventory on Hand (DOH), Days of Sales Outstanding (DSO), and Number of Days of Payables to evaluate the company's inventory management, accounts receivable collection, and accounts payable policies, respectively.
1. Days of Inventory on Hand (DOH):
- The trend in Aptiv's DOH over the past five years shows fluctuations, with a peak in 2022 and a subsequent decrease in 2023. The DOH of 51.96 days in 2023 indicates that, on average, Aptiv holds inventory for approximately 52 days before it is sold. The decreasing trend from 2022 may suggest more efficient inventory management in 2023 compared to the previous year.
2. Days of Sales Outstanding (DSO):
- Aptiv's DSO has also shown variability but generally stayed within a range over the years. The DSO of 69.45 days in 2023 means that, on average, it takes around 69 days for Aptiv to collect its accounts receivable. The decrease in DSO from 2022 to 2023 implies a potential improvement in the company's accounts receivable collection efficiency.
3. Number of Days of Payables:
- The number of days of payables for Aptiv has fluctuated over the years but remained relatively consistent. The 69.23 days in 2023 indicates that Aptiv takes approximately 69 days to pay its suppliers. A lower number of days of payables suggests that the company is managing its payables more quickly.
Overall, analyzing these activity ratios for Aptiv PLC provides valuable insights into the company's operational efficiency and effectiveness in managing its working capital components. The trends observed in these ratios can help stakeholders assess Aptiv's performance in utilizing its assets and liabilities to generate revenue effectively.
Long-term
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Fixed asset turnover | 5.30 | 5.00 | 4.74 | 3.96 | 4.34 |
| Total asset turnover | 0.82 | 0.80 | 0.87 | 0.75 | 1.07 |
The fixed asset turnover ratio measures the efficiency with which a company generates sales revenue from its fixed assets. Aptiv PLC has consistently improved its fixed asset turnover over the past five years, increasing from 4.34 in 2019 to 5.30 in 2023. This indicates that the company is utilizing its fixed assets more effectively to generate sales.
On the other hand, the total asset turnover ratio measures the efficiency of a company in generating sales revenue from its total assets. Aptiv PLC's total asset turnover has fluctuated over the years, with a peak of 1.07 in 2019 followed by a decline to 0.75 in 2020 before gradually improving to 0.82 in 2023. This implies that despite fluctuations, the company has been able to generate sales revenue more efficiently from its total assets in recent years.
Overall, Aptiv PLC's long-term activity ratios suggest an improvement in asset utilization efficiency, as seen in the increasing trend in fixed asset turnover and the recovery in total asset turnover. This indicates that the company is managing its assets effectively to drive sales growth and profitability.