Ashland Global Holdings Inc (ASH)
Activity ratios
Short-term
Turnover ratios
| Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | Sep 30, 2019 | |
|---|---|---|---|---|---|
| Inventory turnover | 2.43 | 2.48 | 3.05 | 2.80 | 2.51 |
| Receivables turnover | 6.48 | 5.95 | 5.72 | 4.28 | 4.47 |
| Payables turnover | 7.25 | 5.89 | 6.11 | 6.72 | 4.78 |
| Working capital turnover | 2.09 | 1.97 | 2.70 | 2.75 | 3.18 |
The inventory turnover ratio for Ashland Inc has decreased slightly from 3.06 in 2021 to 2.43 in 2023. This indicates that the company is taking longer to sell its inventory, possibly leading to excess inventory or slower sales. The receivables turnover ratio has shown an increasing trend, reaching 6.48 in 2023, indicating that the company is collecting its receivables more efficiently. The working capital turnover has also declined from 3.69 in 2019 to 2.09 in 2023, suggesting that the company's efficiency in utilizing its working capital has decreased. However, there is no data available for payables turnover, and further information is required to assess the company's efficiency in managing its payables.
Average number of days
| Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | Sep 30, 2019 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 150.03 | 147.08 | 119.81 | 130.34 | 145.56 |
| Days of sales outstanding (DSO) | days | 56.31 | 61.37 | 63.80 | 85.28 | 81.73 |
| Number of days of payables | days | 50.33 | 61.96 | 59.78 | 54.35 | 76.32 |
Days of inventory on hand (DOH) is a measure of how many days it takes for a company to sell its inventory. In the case of Ashland Inc, the DOH has been increasing over the last five years, indicating that the company is taking longer to sell its inventory. This could be a concern as it may suggest inefficiencies in inventory management, potentially leading to higher carrying costs and the risk of obsolete inventory.
Days of sales outstanding (DSO) measures the average number of days it takes for a company to collect revenue after a sale has been made. Ashland Inc has shown a decreasing trend in DSO over the past five years, indicating that the company has been able to collect its accounts receivable more efficiently. This is a positive sign as it suggests effective credit management and a solid customer base.
The number of days of payables is not provided, so it is not possible to analyze the trend and effectiveness of Ashland Inc's payment practices based on this information.
Overall, while the increasing trend in the days of inventory on hand is a concern, the decreasing trend in days of sales outstanding showcases improvements in the company's collection process. However, a more comprehensive analysis is needed to understand the full scope of Ashland Inc's activity ratios and their impact on the company's operations and financial performance.
Long-term
| Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | Sep 30, 2019 | |
|---|---|---|---|---|---|
| Fixed asset turnover | 1.60 | 1.79 | 1.48 | 1.36 | 1.36 |
| Total asset turnover | 0.37 | 0.38 | 0.32 | 0.29 | 0.30 |
The long-term activity ratios of Ashland Inc show the efficiency of the company in generating sales from its long-term assets. The fixed asset turnover ratio has experienced fluctuations over the past five years, decreasing from 1.79 in 2022 to 1.60 in 2023. This indicates a slight decline in the company's ability to generate sales from its fixed assets. However, the ratio remains relatively consistent compared to previous years.
On the other hand, the total asset turnover ratio has also fluctuated but has generally remained low over the past five years, with a slight decrease from 0.38 in 2022 to 0.37 in 2023. This suggests that the company is generating fewer sales in relation to its total assets, which could indicate underutilization of assets or challenges in generating revenue from its total asset base.
In conclusion, the long-term activity ratios of Ashland Inc highlight the need for the company to carefully assess its asset utilization and sales generation strategies to improve efficiency and maximize returns from its long-term assets.