Ashland Global Holdings Inc (ASH)

Short-term

Turnover ratios

The activity ratios of Ashland Global Holdings Inc indicate the efficiency of the company in managing its inventories, receivables, payables, and working capital over the past five years.

1. Inventory Turnover:
- The inventory turnover ratio has shown some fluctuations over the years, ranging from 2.43 to 3.05.
- In 2024, the ratio improved to 2.74, indicating that the company was able to sell and replace its inventory 2.74 times during the year.
- A higher turnover ratio suggests that Ashland Global Holdings Inc is managing its inventory more efficiently.

2. Receivables Turnover:
- The receivables turnover ratio has been increasing steadily, from 4.28 in 2020 to 8.70 in 2024.
- The rise in the ratio indicates that the company is collecting its accounts receivable more frequently.
- A higher turnover ratio signifies that Ashland Global Holdings Inc is effective in collecting payments from its customers.

3. Payables Turnover:
- The payables turnover ratio has varied over the years, ranging from 5.89 to 7.25.
- In 2024, the ratio decreased to 6.99, implying that the company took longer to pay off its accounts payables during the year.
- A lower payables turnover ratio may indicate that Ashland Global Holdings Inc is holding onto its payables for a longer period, thus potentially optimizing cash flow.

4. Working Capital Turnover:
- The working capital turnover ratio has shown fluctuations but generally remained stable between 2.09 and 3.00.
- In 2024, the ratio improved to 3.00, indicating that the company generated $3 in revenue for every dollar of working capital employed.
- A higher working capital turnover ratio suggests that Ashland Global Holdings Inc is efficiently utilizing its working capital to generate sales.

In conclusion, analyzing the activity ratios of Ashland Global Holdings Inc provides insights into the company's operational efficiency and effectiveness in managing its resources. A consistently improving receivables turnover and working capital turnover ratio are positive indicators, while fluctuations in inventory and payables turnover ratios warrant further investigation into the company's inventory management and payment practices.

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Average number of days

The activity ratios of Ashland Global Holdings Inc provide insight into its efficiency in managing its inventory, collecting receivables, and paying its payables.

1. Days of Inventory on Hand (DOH):
- The trend in DOH shows an increase from 130.34 days in 2020 to 150.03 days in 2023, before decreasing to 133.06 days in 2024.
- A lower DOH implies that the company is selling its inventory more quickly, indicating better inventory management.

2. Days of Sales Outstanding (DSO):
- DSO has improved over the years, declining from 85.28 days in 2020 to 41.98 days in 2024.
- A lower DSO signifies that the company is collecting its receivables faster, which is a positive sign for cash flow and liquidity.

3. Number of Days of Payables:
- The number of days of payables has shown fluctuations over the years, ranging from 50.33 days in 2023 to 61.96 days in 2022.
- A higher number of days of payables indicates that the company is taking longer to pay its suppliers, potentially impacting relationships but providing short-term cash flow benefits.

Overall, the trend in these activity ratios suggests that Ashland Global Holdings Inc has improved its efficiency in managing inventory, collecting receivables, and managing payables over the years, which can contribute to its overall financial health and operational efficiency.

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Long-term

The fixed asset turnover ratio for Ashland Global Holdings Inc has shown a fluctuating trend over the past five years, with values ranging from 1.36 to 1.79. This ratio indicates how efficiently the company is utilizing its fixed assets to generate sales. In general, a higher fixed asset turnover ratio is preferable, as it suggests that the company is effectively deploying its fixed assets to generate revenue.

On the other hand, the total asset turnover ratio has also remained relatively stable over the same period, with values ranging from 0.29 to 0.38. This ratio measures how effectively the company is using its total assets to generate sales. A higher total asset turnover ratio suggests that the company is efficiently utilizing its assets to generate revenue.

When comparing the fixed asset turnover and total asset turnover ratios, it is important to note that the fixed asset turnover ratio tends to be higher than the total asset turnover ratio. This is because fixed assets typically have a higher value compared to total assets, and thus, they generate a greater proportion of sales. Overall, the trend in both ratios indicates that Ashland Global Holdings Inc has been effectively utilizing both its fixed and total assets to generate sales over the past five years.