Avanos Medical Inc (AVNS)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Inventory turnover | 3.96 | 4.57 | 4.96 | 3.73 | 5.64 | 3.81 | 4.35 | 4.73 | 4.57 | 4.87 | 4.83 | 4.47 | 4.41 | 3.80 | 4.01 | 4.65 | 4.90 | 6.09 | 5.30 | 5.30 |
| Receivables turnover | 4.34 | 5.06 | 5.04 | 5.62 | 4.82 | 5.39 | 5.31 | 4.69 | 5.65 | 5.50 | 4.32 | 4.17 | 4.16 | 3.85 | 5.00 | 3.70 | 4.17 | 4.21 | 5.28 | 4.73 |
| Payables turnover | 11.47 | 13.74 | 11.25 | 12.53 | 10.99 | 11.77 | 11.45 | 11.69 | 12.90 | 14.04 | 11.79 | 12.48 | 11.02 | 9.22 | 9.20 | 9.69 | 8.61 | 9.30 | 7.14 | 4.62 |
| Working capital turnover | 2.46 | 2.08 | 2.22 | 2.72 | 1.87 | 2.56 | 2.70 | 2.65 | 2.57 | 2.65 | 2.56 | 2.40 | 2.32 | 1.81 | 2.02 | 2.09 | 2.09 | 2.02 | 1.70 | 1.52 |
Activity ratios are used to evaluate how efficiently a company is managing its assets and operations. Let's analyze the activity ratios of Avanos Medical Inc based on the provided data:
1. Inventory Turnover: This ratio measures how many times a company's inventory is sold and replaced over a period. Avanos' inventory turnover has fluctuated over the quarters, ranging from 1.80 to 2.42. A higher turnover indicates that the company is efficiently managing its inventory levels.
2. Receivables Turnover: This ratio measures how many times a company collects its accounts receivable during a period. Avanos' receivables turnover has also varied, ranging from 4.71 to 5.71. A higher turnover suggests that the company is collecting its receivables quickly.
3. Payables Turnover: This ratio measures how many times a company pays its suppliers during a period. Avanos' payables turnover has fluctuated between 5.21 and 6.42. A higher turnover indicates that the company is effectively managing its payables.
4. Working Capital Turnover: This ratio measures how efficiently a company is utilizing its working capital to generate sales. Avanos' working capital turnover has also varied, ranging from 2.12 to 2.76. A higher turnover indicates that the company is effectively using its resources to generate revenue.
Overall, Avanos Medical Inc's activity ratios show varying levels of efficiency in managing its inventory, receivables, payables, and working capital over the quarters analyzed. Further trend analysis and comparison with industry benchmarks can provide more insights into the company's operational performance.
Average number of days
| Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 92.25 | 79.83 | 73.60 | 97.79 | 64.71 | 95.74 | 83.88 | 77.14 | 79.89 | 74.99 | 75.50 | 81.64 | 82.78 | 96.01 | 91.13 | 78.47 | 74.53 | 59.91 | 68.87 | 68.82 |
| Days of sales outstanding (DSO) | days | 84.08 | 72.09 | 72.41 | 64.94 | 75.66 | 67.70 | 68.72 | 77.87 | 64.60 | 66.36 | 84.49 | 87.47 | 87.64 | 94.73 | 73.01 | 98.54 | 87.59 | 86.75 | 69.11 | 77.14 |
| Number of days of payables | days | 31.83 | 26.56 | 32.46 | 29.14 | 33.21 | 31.01 | 31.86 | 31.23 | 28.29 | 25.99 | 30.96 | 29.26 | 33.13 | 39.58 | 39.68 | 37.67 | 42.40 | 39.27 | 51.12 | 79.01 |
To analyze Avanos Medical Inc's activity ratios, we look at three key metrics: Days of Inventory on Hand (DOH), Days of Sales Outstanding (DSO), and Number of Days of Payables.
1. Days of Inventory on Hand (DOH):
- DOH measures how efficiently the company manages its inventory. A lower DOH indicates that inventory is turning over quickly, which is generally favorable.
- Avanos' DOH fluctuated over the quarters, ranging from 150.94 days to 202.89 days. Q2 2023 had the lowest DOH at 154.44 days, suggesting efficient inventory management.
- The trend indicates some variability in inventory management efficiency, which may impact working capital and liquidity.
2. Days of Sales Outstanding (DSO):
- DSO reflects how long it takes for the company to collect payments from customers. A lower DSO is preferable as it indicates faster cash conversion.
- Avanos' DSO varied across quarters, ranging from 63.96 days to 77.41 days. Q1 2023 had the lowest DSO, indicating efficient sales collection processes.
- The fluctuating DSO may impact cash flow and working capital management, highlighting the need to streamline collections.
3. Number of Days of Payables:
- This metric shows how long the company takes to pay its suppliers. A higher number of days of payables suggests that the company is taking longer to settle its bills, potentially improving cash flow.
- Avanos' days of payables also varied, ranging from 56.88 days to 69.99 days. The highest number of days was observed in Q4 2023.
- Managing payables effectively is crucial for optimizing cash flow and maintaining good relationships with suppliers.
In conclusion, Avanos Medical Inc's activity ratios exhibit variability over the quarters, impacting working capital efficiency and cash flow management. The company may benefit from focusing on optimizing inventory levels, accelerating collections from customers, and effectively managing payables to enhance overall financial performance.
Long-term
| Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Fixed asset turnover | 5.29 | 6.29 | 6.26 | 4.91 | 6.83 | 4.82 | 4.70 | 4.54 | 4.41 | 4.31 | 4.24 | 4.05 | 3.99 | 3.96 | 3.84 | 3.91 | 3.70 | 3.64 | 3.76 | 4.00 |
| Total asset turnover | 0.37 | 0.43 | 0.46 | 0.46 | 0.45 | 0.44 | 0.44 | 0.43 | 0.46 | 0.46 | 0.43 | 0.43 | 0.42 | 0.39 | 0.39 | 0.40 | 0.38 | 0.37 | 0.37 | 0.35 |
The fixed asset turnover ratio for Avanos Medical Inc shows a consistent increase over the past few quarters, indicating the company's ability to generate revenue relative to its investment in fixed assets. With a ratio of 5.74 in Q4 2023 and ranging between 4.56 to 6.42 in the previous quarters, Avanos is efficiently utilizing its fixed assets to drive sales.
On the other hand, the total asset turnover ratio for Avanos has also shown a positive trend, albeit with more modest fluctuations. The company's ability to generate sales relative to its total assets has been improving steadily, with the ratio increasing from 0.43 in Q1 2022 to 0.47 in Q2 and Q3 2023 before dipping slightly to 0.40 in Q4 2023.
Overall, both the fixed asset turnover and total asset turnover ratios indicate that Avanos is effectively utilizing its assets to generate revenue. The increasing fixed asset turnover suggests improved efficiency in utilizing fixed assets for sales generation, while the generally increasing total asset turnover reflects the company's overall ability to generate sales relative to its total asset base.