AptarGroup Inc (ATR)

Short-term

Turnover ratios

AptarGroup Inc's activity ratios provide insight into how efficiently the company is managing its resources. Let's analyze each of the activity ratios based on the provided data:

1. Inventory Turnover: This ratio measures how many times a company sells and replaces its inventory during a specific period. AptarGroup Inc's inventory turnover has been on a declining trend over the analyzed periods, indicating a decrease in the efficiency of inventory management. The ratio dropped from 5.29 in March 2020 to 0.14 in June 2022 before slightly increasing but remaining low.

2. Receivables Turnover: The receivables turnover ratio reflects how quickly a company collects its accounts receivable. AptarGroup Inc's receivables turnover ratio has shown fluctuations but generally remained stable over the analyzed periods, ranging from 4.71 to 5.44. The company seems to be effectively managing its accounts receivable turnover.

3. Payables Turnover: Unfortunately, data for the payables turnover ratio is limited, as some periods have missing values indicated by "N/A" symbols. However, it is observed that AptarGroup Inc's payables turnover ratio has shown a gradual increase in recent periods, indicating a longer time taken to pay its suppliers.

4. Working Capital Turnover: This ratio measures how efficiently a company utilizes its working capital to generate sales. AptarGroup Inc's working capital turnover ratio has shown significant fluctuations over the analyzed periods, ranging from 4.22 to 12.71. The ratio experienced a peak in efficiency in September 2023 but declined in subsequent periods.

In conclusion, AptarGroup Inc's activity ratios suggest varying degrees of efficiency in managing its inventory, receivables, payables, and working capital. The company may need to address its declining inventory turnover and monitor its working capital turnover to maintain operational efficiency.

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Average number of days

Based on the data provided, AptarGroup Inc's activity ratios reflect significant fluctuations over the years.

1. Days of Inventory on Hand (DOH):
- AptarGroup's DOH increased drastically from 68.94 days as of March 31, 2020, to a peak of 3,243.66 days by December 31, 2023, before declining slightly to 2,620.80 days by December 31, 2024.
- This indicates a substantial increase in the number of days it takes for the company to sell its inventory, which may suggest inefficiencies in inventory management or potential issues with demand forecasting.

2. Days of Sales Outstanding (DSO):
- AptarGroup's DSO remained relatively stable over the years, ranging from a low of 67.04 days as of December 31, 2024, to a high of 77.46 days on March 31, 2020.
- The stability in DSO implies that the company has been able to collect its accounts receivable consistently within a reasonable timeframe, which is a positive indicator of its credit control and customer payment practices.

3. Number of Days of Payables:
- AptarGroup's payables data show that the company has significantly extended its payment periods over time, with a notable increase from 43.97 days on December 31, 2020, to a peak of 2,134.08 days on December 31, 2022.
- Such an increase in the number of days of payables may indicate that the company is taking longer to settle its obligations to suppliers, potentially signaling liquidity management strategies or negotiating more favorable payment terms.

Overall, the trends observed in AptarGroup Inc's activity ratios suggest areas where the company may need to focus on optimizing its working capital management, inventory control, and supplier relationships to enhance operational efficiency and financial performance.

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Long-term

AptarGroup Inc's fixed asset turnover ratio has fluctuated over the past five years, ranging from a low of 2.36 to a high of 2.73. This ratio indicates how effectively the company is utilizing its fixed assets to generate sales. The upward trend from March 2024 to September 2024 suggests an improvement in efficiency in generating sales from fixed assets. However, the ratio declined in December 2024, which may indicate a decrease in sales relative to fixed assets.

In terms of total asset turnover, AptarGroup Inc's ratio has also varied, ranging from 0.73 to 0.83. This ratio reflects the company's ability to generate sales from its total assets. The highest ratio was recorded in September 2022, indicating a peak in sales generated from total assets. However, the ratio decreased in December 2024, suggesting a potential decline in sales relative to total assets.

Overall, while the fixed asset turnover ratio shows some stability and slight improvement in recent periods, the total asset turnover ratio has been more volatile. It may be important for AptarGroup Inc to closely monitor and analyze both ratios to ensure efficient utilization of assets in generating sales.