Avanos Medical Inc (AVNS)

Short-term

Turnover ratios

Activity ratios provide insights into how efficiently a company manages its assets and liabilities to generate sales.

1. Inventory Turnover: Avanos Medical Inc's inventory turnover has been fluctuating over the years. In 2021, it increased to 2.53 from 2.02 in 2020, indicating that the company sold its inventory 2.53 times during the year. However, in 2024, it further rose to 2.21, suggesting improved inventory management efficiency.

2. Receivables Turnover: The data shows "—", indicating that receivables turnover information is not available. This means that we cannot evaluate how quickly the company collects its accounts receivables from customers.

3. Payables Turnover: Similar to receivables turnover, payables turnover data is not available, so it is not possible to assess how effectively the company manages its payments to suppliers.

4. Working Capital Turnover: Avanos Medical Inc's working capital turnover has shown an increasing trend from 2.38 in 2020 to 3.02 in 2024. This suggests that the company is generating more revenue per dollar of working capital invested, reflecting efficient use of resources to drive sales.

Overall, while inventory turnover and working capital turnover have shown positive trends, the lack of data on receivables and payables turnover limits a comprehensive assessment of Avanos Medical Inc's overall efficiency in managing its working capital and operational activities.

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Average number of days

The analysis of Avanos Medical Inc's activity ratios reveals fluctuations in its inventory management efficiency over the years. The Days of Inventory on Hand (DOH) decreased from 180.52 days as of December 31, 2020, to 144.25 days as of December 31, 2021, showing an improvement in managing inventory levels. However, this ratio increased to 187.73 days by December 31, 2022, and further to 202.89 days by December 31, 2023, indicating a potential buildup of inventory.

Regarding the Days of Sales Outstanding (DSO) and the Number of Days of Payables, the data provided showed "— days" for each year, suggesting that information on the accounts receivable collection period and accounts payable payment period was not available. Analyzing these two metrics could provide further insights into Avanos Medical Inc's accounts receivable and accounts payable management efficiency.

Overall, the company may need to focus on optimizing its inventory levels to prevent overstocking and potential obsolescence, while also paying attention to managing accounts receivable and payables effectively to maintain a healthy cash conversion cycle.

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Long-term

Long-term activity ratios provide insights into how efficiently a company utilizes its assets to generate sales.

1. Fixed Asset Turnover:
- The fixed asset turnover ratio measures how well a company uses its fixed assets to generate revenue.
- Avanos Medical Inc's fixed asset turnover has been increasing over the years, from 4.08 in December 31, 2020, to 5.00 in December 31, 2022.
- This indicates that Avanos is becoming more efficient in generating sales from its fixed assets, which is a positive sign of operational efficiency.
- The lack of data for 2023 and 2024 makes it challenging to assess the trend accurately for those years.

2. Total Asset Turnover:
- The total asset turnover ratio shows how effectively a company uses all its assets to generate revenue.
- Avanos Medical Inc's total asset turnover ratio has fluctuated over the years, from 0.43 in December 31, 2020, to 0.60 in December 31, 2024.
- The increase in total asset turnover from 2020 to 2024 indicates that the company is generating more sales relative to its total assets.
- However, the dip in 2023 from the previous year suggests a potential need to assess the company's asset utilization efficiency during that period.

Overall, based on the fixed asset turnover and total asset turnover ratios, Avanos Medical Inc appears to be improving its efficiency in generating sales from both fixed and total assets, with some fluctuations in the total asset turnover that may warrant further analysis for specific years.