AptarGroup Inc (ATR)

Short-term

Turnover ratios

AptarGroup Inc's activity ratios provide insight into the efficiency of the company's operations in managing its assets, receivables, payables, and working capital.

1. Inventory Turnover:
- The inventory turnover ratio reflects how efficiently AptarGroup is selling its inventory.
- In 2020, the ratio was 5.33, indicating that the company turned over its inventory approximately 5.33 times during the year.
- However, there has been a substantial decrease in inventory turnover over the following years, with the ratio dropping to 0.16 in 2021, and remaining low at 0.11 in 2022 before slightly improving to 0.19 in 2023 and 0.14 in 2024.
- A declining inventory turnover may suggest issues with managing inventory levels, potential overstocking, or difficulties in selling products efficiently.

2. Receivables Turnover:
- The receivables turnover ratio measures how effectively AptarGroup collects on credit sales.
- The company maintained relatively stable receivables turnover ratios ranging from 4.81 to 5.44 between 2020 and 2024.
- Consistent receivables turnover ratios suggest AptarGroup is efficiently collecting payments from customers, which is a positive sign for cash flow management.

3. Payables Turnover:
- The payables turnover ratio indicates how quickly AptarGroup pays its suppliers and creditors.
- In 2020, the ratio was 8.30, which declined significantly to 0.25 in 2021 and remained low at around 0.17 to 0.29 in the subsequent years.
- A lower payables turnover ratio may indicate that the company is taking longer to pay its bills, potentially impacting supplier relationships or indicating cash flow constraints.

4. Working Capital Turnover:
- The working capital turnover ratio measures how efficiently AptarGroup is utilizing its working capital to generate revenue.
- The company showed fluctuations in working capital turnover ratios, with values ranging from 4.98 to 11.70 between 2020 and 2024.
- A higher working capital turnover ratio indicates that AptarGroup is effectively using its working capital to support business operations and generate sales revenue.

In conclusion, while AptarGroup's receivables turnover remained relatively stable over the years, the significant declines in inventory turnover and payables turnover ratios raise concerns about inventory management and payment practices. Management should closely monitor and address these trends to improve operational efficiency and cash flow management.

---

Average number of days

AptarGroup Inc's activity ratios over the years indicate some significant fluctuations.

1. Days of Inventory on Hand (DOH):
- The DOH in 2020 was reasonably low at 68.44 days, suggesting efficient management of inventory.
- However, there was a dramatic increase in 2021 to 2,215.61 days and continued rise in 2022 to 3,233.09 days, indicating a significant inventory management issue or a change in inventory strategy.
- The DOH decreased in 2023 to 1,968.65 days and then increased in 2024 to 2,620.80 days, remaining at elevated levels compared to 2020.

2. Days of Sales Outstanding (DSO):
- The DSO showed a slight increase from 70.65 days in 2020 to 75.89 days in 2021, which could indicate a potential issue with collecting receivables.
- However, the trend reversed in 2022 with a decrease to 74.38 days and further improvements in 2023 to 70.94 days and in 2024 to 67.04 days, reflecting faster collection of sales.

3. Number of Days of Payables:
- The number of days of payables was steady at 43.97 days in 2020, indicating a balanced approach to managing payables.
- A significant increase in 2021 to 1,431.66 days, followed by further increases in 2022 to 2,127.13 days and 2024 to 1,679.64 days, suggests a change in payment terms or liquidity challenges.
- The days of payables decreased in 2023 to 1,260.77 days but remained at a high level compared to 2020.

Overall, AptarGroup Inc's activity ratios show fluctuations that may need further investigation to understand the underlying reasons and assess the impact on the company's operational efficiency and financial health.

---

Long-term

AptarGroup Inc's fixed asset turnover ratio has shown some fluctuations over the past five years, ranging from 2.36 in 2023 to 2.53 in 2021. This ratio measures the efficiency of the company in generating sales from its fixed assets. The consistent values above 2 indicate that AptarGroup is effectively utilizing its fixed assets to generate revenue.

In terms of total asset turnover, AptarGroup has also experienced growth over the same period, with the ratio increasing from 0.73 in 2020 to 0.81 in 2024. This ratio assesses how well the company is utilizing its total assets to generate sales. The increasing trend suggests that AptarGroup is becoming more efficient in generating revenue relative to its total asset base.

Overall, the long-term activity ratios indicate that AptarGroup Inc has been effectively utilizing both its fixed assets and total assets to generate sales, showcasing efficiency in asset management and revenue generation over the past five years.