Avantor Inc (AVTR)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Inventory turnover | 6.16 | 5.56 | 5.37 | 5.60 | 5.83 |
| Receivables turnover | 6.56 | 6.06 | 6.17 | 6.04 | 5.74 |
| Payables turnover | 6.80 | 7.35 | 6.48 | 6.47 | 6.35 |
| Working capital turnover | 48.77 | 7.70 | 7.52 | 7.20 | 6.47 |
Avantor Inc's activity ratios provide insights into how efficiently the company manages its assets and liabilities to generate revenue.
1. Inventory Turnover: The inventory turnover ratio measures how many times a company sells and replaces its inventory within a specific period. Avantor's inventory turnover has shown a slight decrease from 5.83 in 2020 to 5.60 in 2021 and then a fluctuation between 5.37 to 6.16 over the years. A higher ratio indicates efficient inventory management.
2. Receivables Turnover: This ratio evaluates how many times the company collects its accounts receivable during a period. Avantor's receivables turnover has been consistently increasing from 5.74 in 2020 to 6.56 in 2024, suggesting an improvement in the collection efficiency.
3. Payables Turnover: The payables turnover ratio measures how quickly a company pays its suppliers. Avantor's payables turnover has shown fluctuation but overall remains relatively stable, increasing from 6.35 in 2020 to 6.80 in 2024. A higher ratio indicates better management of trade credit terms.
4. Working Capital Turnover: This ratio evaluates how effectively the company utilizes its working capital to generate sales. Avantor's working capital turnover ratio has increased significantly from 6.47 in 2020 to 48.77 in 2024, indicating a substantial improvement in utilizing working capital efficiently to drive revenue growth.
Overall, the trend in these activity ratios reflects Avantor's ability to manage its assets and liabilities efficiently to support its business operations and revenue generation.
Average number of days
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 59.28 | 65.66 | 67.91 | 65.18 | 62.59 |
| Days of sales outstanding (DSO) | days | 55.66 | 60.26 | 59.20 | 60.39 | 63.56 |
| Number of days of payables | days | 53.71 | 49.63 | 56.37 | 56.44 | 57.45 |
Based on the data provided, Avantor Inc's activity ratios can be analyzed as follows:
1. Days of Inventory on Hand (DOH):
- The trend in Avantor's DOH over the years indicates an increase from 62.59 days in 2020 to 59.28 days in 2024.
- A higher DOH suggests that the company is holding inventory for a longer period before selling, which may tie up capital and increase holding costs.
2. Days of Sales Outstanding (DSO):
- Avantor's DSO has shown a decreasing trend from 63.56 days in 2020 to 55.66 days in 2024.
- A lower DSO indicates that the company is collecting its accounts receivable more quickly, which can improve cash flow and liquidity.
3. Number of Days of Payables:
- Avantor's Number of Days of Payables has fluctuated over the years, decreasing from 57.45 days in 2020 to 53.71 days in 2024.
- A decreasing trend in payables days may suggest that the company is paying its suppliers more quickly, potentially indicating a stronger position with suppliers or better negotiation terms.
Overall, Avantor's activity ratios reflect a mixed performance in managing its inventory, receivables, and payables. The company has shown improvements in collecting receivables efficiently but has experienced challenges in managing inventory levels effectively and payment terms with suppliers.
Long-term
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Fixed asset turnover | 9.58 | 9.45 | 10.33 | 10.47 | 11.63 |
| Total asset turnover | 0.56 | 0.54 | 0.56 | 0.53 | 0.65 |
Long-term activity ratios provide insights into how well a company utilizes its assets to generate sales over an extended period.
1. Fixed Asset Turnover:
- The fixed asset turnover ratio indicates how efficiently the company generates sales using its fixed assets.
- Avantor Inc's fixed asset turnover has shown a slight decline over the past years, from 11.63 in 2020 to 9.58 in 2024.
- This decrease suggests that the company may be slightly less efficient in utilizing its fixed assets to generate revenue.
2. Total Asset Turnover:
- The total asset turnover ratio measures how effectively a company generates sales using its total assets.
- Avantor Inc's total asset turnover has fluctuated over the period, with a decrease from 0.65 in 2020 to 0.53 in 2021, before showing a slight recovery to 0.56 in 2022, 2023, and 2024.
- The fluctuation in total asset turnover could reflect changes in the company's asset management efficiency and sales generation capability.
Overall, while Avantor Inc's fixed asset turnover has declined steadily, the total asset turnover ratio shows a more mixed performance, indicating potential variability in the company's asset utilization efficiency. Further analysis of operational strategies and investment decisions may provide additional insights into the company's performance in terms of long-term asset efficiency.