Avery Dennison Corp (AVY)
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 | 7.83 | 7.62 | 7.39 | 7.13 | 7.98 | 8.04 | 8.01 | 8.03 | 8.16 | 8.15 | 8.29 | 8.09 | 8.55 | 9.02 | 8.30 | 8.63 | 10.11 | 11.53 | 11.04 | 10.44 |
| Receivables turnover | 5.85 | 5.75 | 5.95 | — | 6.52 | — | — | — | 5.86 | — | — | — | — | — | — | — | — | — | — | — |
| Payables turnover | 5.65 | 5.64 | 5.92 | 6.06 | 6.01 | 5.90 | 5.62 | 5.62 | 5.70 | 5.65 | 5.58 | 5.40 | 5.83 | 6.41 | 6.31 | 6.06 | 6.29 | 7.36 | 7.02 | 6.95 |
| Working capital turnover | 85.72 | 117.06 | 34.76 | 25.15 | — | 405.11 | — | 50.46 | 44.69 | 48.35 | 11.89 | 12.65 | 14.08 | 11.96 | 16.16 | 19.73 | 80.78 | 106.99 | 71.18 | 25.08 |
Avery Dennison Corp's activity ratios provide insights into the efficiency of the company's management of its assets and liabilities over time.
1. Inventory Turnover:
The inventory turnover ratio measures how efficiently the company manages its inventory levels. Avery Dennison Corp's inventory turnover has been relatively stable, ranging between 7.13 and 11.53 over the past two years. A decreasing trend in recent quarters may indicate possible issues with managing inventory levels, which could lead to excess inventory or potential stocking issues.
2. Receivables Turnover:
The receivables turnover ratio reflects how quickly the company collects its accounts receivable. Avery Dennison Corp's data shows some fluctuations in this ratio, with values ranging from 5.75 to 6.52 in the latest available quarter. The absence of data in some quarters may suggest irregularities in the reporting or potential changes in credit policies that affect the collection of receivables.
3. Payables Turnover:
The payables turnover ratio indicates the speed at which a company pays its suppliers. Avery Dennison Corp has maintained a relatively consistent payables turnover ratio, ranging from 5.40 to 7.36 over the past two years. A higher turnover ratio may indicate a shorter payment period, potentially improving the company's liquidity position.
4. Working Capital Turnover:
The working capital turnover ratio measures how effectively the company utilizes its working capital to generate sales. Avery Dennison Corp's data shows varying working capital turnover ratios over the analyzed periods, with values ranging from 11.89 to 405.11. A significantly high turnover ratio may suggest the company is efficiently using its working capital to generate sales, while a low ratio could indicate inefficiencies in capital utilization.
Overall, further analysis of the trends and factors impacting these activity ratios can provide valuable insights into Avery Dennison Corp's operational efficiency and 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 | 46.60 | 47.89 | 49.42 | 51.17 | 45.76 | 45.41 | 45.57 | 45.47 | 44.73 | 44.81 | 44.03 | 45.12 | 42.71 | 40.45 | 43.97 | 42.27 | 36.10 | 31.66 | 33.05 | 34.97 |
| Days of sales outstanding (DSO) | days | 62.43 | 63.53 | 61.33 | — | 56.02 | — | — | — | 62.31 | — | — | — | — | — | — | — | — | — | — | — |
| Number of days of payables | days | 64.64 | 64.74 | 61.60 | 60.21 | 60.69 | 61.91 | 64.93 | 64.95 | 64.03 | 64.64 | 65.47 | 67.57 | 62.58 | 56.94 | 57.89 | 60.24 | 58.04 | 49.58 | 51.98 | 52.51 |
Avery Dennison Corp's activity ratios can provide insights into the efficiency of its operations. The Days of Inventory on Hand (DOH) measures how many days it takes for the company to sell its inventory. Over the past five quarters, DOH has been relatively stable, ranging from 42.27 to 51.17 days. This indicates that Avery Dennison manages its inventory well, neither overstocking nor understocking.
The Days of Sales Outstanding (DSO) indicates how long it takes for the company to collect its accounts receivable. However, there is missing data for DSO in the most recent quarter. Historically, DSO has fluctuated, ranging from 56.02 to 63.53 days. A lower DSO is favorable as it implies faster collection of receivables.
The Number of Days of Payables measures how long it takes for the company to pay its suppliers. Avery Dennison's payables days have been relatively stable, ranging from 49.58 to 67.57 days over the past five quarters. A longer period signifies that the company takes longer to pay its suppliers, which can be advantageous for managing cash flow.
Overall, Avery Dennison Corp's activity ratios suggest efficient management of inventory, receivables, and payables, contributing to the company's operational effectiveness. The stability in these ratios indicates a consistent approach to managing working capital.
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 | 5.18 | 5.27 | 5.38 | 5.55 | 5.81 | 6.32 | 6.12 | 5.84 | 5.65 | 5.82 | 5.83 | 5.46 | 5.14 | 5.41 | 5.46 | 5.66 | 5.79 | 6.14 | 6.14 | 6.20 |
| Total asset turnover | 1.01 | 1.01 | 1.02 | 1.06 | 1.13 | 1.13 | 1.10 | 1.06 | 1.05 | 1.03 | 1.22 | 1.16 | 1.13 | 1.17 | 1.19 | 1.11 | 1.28 | 1.31 | 1.30 | 1.33 |
Avery Dennison Corp's long-term activity ratios indicate the efficiency of the company in managing its fixed assets and total assets to generate sales.
The fixed asset turnover ratio has shown a decreasing trend over the past few quarters, indicating that the company is generating slightly fewer sales from its fixed assets. This could be a sign that the company's fixed assets are not being utilized as effectively as before, which may require further investigation to identify potential inefficiencies in asset utilization.
On the other hand, the total asset turnover ratio has fluctuated but generally remained stable over the periods analyzed. The company seems to be efficiently utilizing its total assets to generate sales, although there was a significant peak in the ratio in the middle part of the period.
Overall, Avery Dennison Corp's long-term activity ratios suggest that while the company has been effective in utilizing its total assets to generate sales, there may be some concerns regarding the efficiency of its fixed asset utilization that warrant closer attention and potential improvements in asset management strategies.