Axalta Coating Systems Ltd (AXTA)
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 | 5.98 | 6.13 | 5.98 | 5.70 | 5.39 | 5.31 | 5.35 | 5.43 | 5.95 | 5.27 | 5.66 | 5.47 | 5.69 | 6.00 | 6.22 | 6.10 | 6.34 | 6.39 | 6.63 | 6.66 |
| Receivables turnover | 4.11 | 3.94 | 3.98 | 4.27 | 4.58 | 4.32 | 4.21 | 4.40 | 4.71 | 4.15 | 4.14 | 4.23 | 4.30 | 4.56 | 5.79 | 5.59 | 5.40 | 4.86 | 4.68 | 5.04 |
| Payables turnover | 6.11 | 6.48 | 6.52 | 6.47 | 6.10 | 5.90 | 5.72 | 5.55 | 6.06 | 5.74 | 5.82 | 5.64 | 5.65 | 6.67 | 10.10 | 7.43 | 7.76 | 7.71 | 7.96 | 7.86 |
| Working capital turnover | 3.72 | 3.59 | 3.71 | 3.72 | 3.73 | 3.63 | 3.72 | 3.86 | 3.56 | 3.52 | 2.34 | 2.24 | 2.14 | 2.11 | 2.37 | 3.68 | 2.99 | 3.25 | 3.49 | 3.74 |
Axalta Coating Systems Ltd's activity ratios provide insight into how efficiently the company is managing its operational assets.
1. Inventory turnover: The company's inventory turnover has generally been increasing over the past year, indicating that inventory is being sold more quickly. The ratio is above 4, which suggests that the company is efficiently managing its inventory levels.
2. Receivables turnover: The receivables turnover has been somewhat volatile but has remained relatively stable around 4 for the most recent quarters. This suggests that the company is collecting its accounts receivable in a timely manner.
3. Payables turnover: Axalta's payables turnover has shown a slight increase over the quarters, reaching above 5 in recent periods. A higher payables turnover indicates that the company is taking longer to pay its creditors, which can be beneficial for cash flow management.
4. Working capital turnover: The working capital turnover ratio has been fairly consistent around 3.7 to 3.9, indicating that the company is generating revenue efficiently relative to its working capital. A higher ratio suggests that the company is using its working capital effectively to generate sales.
Overall, Axalta Coating Systems Ltd's activity ratios suggest that the company is effectively managing its inventory, accounts receivable, accounts payable, and working capital to support its operations and generate sales.
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 | 61.02 | 59.52 | 61.08 | 64.08 | 67.66 | 68.70 | 68.28 | 67.20 | 61.37 | 69.19 | 64.54 | 66.73 | 64.12 | 60.83 | 58.72 | 59.82 | 57.55 | 57.10 | 55.07 | 54.81 |
| Days of sales outstanding (DSO) | days | 88.71 | 92.69 | 91.81 | 85.48 | 79.76 | 84.44 | 86.67 | 83.04 | 77.48 | 88.04 | 88.08 | 86.27 | 84.94 | 79.98 | 63.09 | 65.30 | 67.60 | 75.07 | 78.00 | 72.36 |
| Number of days of payables | days | 59.69 | 56.33 | 55.95 | 56.45 | 59.82 | 61.84 | 63.78 | 65.79 | 60.25 | 63.54 | 62.75 | 64.76 | 64.64 | 54.74 | 36.14 | 49.15 | 47.06 | 47.35 | 45.83 | 46.43 |
Axalta Coating Systems Ltd's activity ratios provide insight into the efficiency of the company's operations.
1. Days of Inventory on Hand (DOH):
DOH measures how many days on average Axalta holds its inventory before selling it. The trend shows a slight decrease in DOH from Q4 2022 to Q4 2023, indicating that the company is managing its inventory more efficiently. However, the current DOH of around 76-83 days suggests that Axalta may still have room to improve its inventory management by reducing holding periods even further.
2. Days of Sales Outstanding (DSO):
DSO reflects how long it takes on average for Axalta to collect payments from its customers. The trend in DSO fluctuates throughout the quarters, but generally remains within the range of 79-93 days. A lower DSO is desirable as it indicates faster collection of receivables. Axalta may benefit from implementing strategies to reduce DSO further to improve cash flows and liquidity.
3. Number of Days of Payables:
This ratio indicates the average number of days Axalta takes to pay its suppliers. The trend in the number of days of payables shows a decrease from Q1 2022 to Q4 2023, suggesting the company is paying its suppliers more rapidly. Paying suppliers later can improve cash flows but may strain relationships with vendors.
Overall, Axalta's activity ratios reveal a need for continued focus on improving inventory management, streamlining accounts receivable collection processes, and balancing timely payments to suppliers to enhance operational efficiency and 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 | 4.30 | 4.38 | 4.22 | 4.15 | 4.10 | 4.27 | 4.02 | 3.82 | 3.72 | 3.65 | 3.63 | 3.28 | 3.13 | 3.23 | 3.32 | 3.74 | 3.66 | 3.74 | 3.64 | 3.64 |
| Total asset turnover | 0.71 | 0.73 | 0.72 | 0.71 | 0.69 | 0.70 | 0.67 | 0.64 | 0.61 | 0.60 | 0.60 | 0.54 | 0.52 | 0.53 | 0.58 | 0.68 | 0.66 | 0.68 | 0.69 | 0.70 |
The fixed asset turnover ratio measures how efficiently a company utilizes its fixed assets to generate sales. Higher ratios indicate better utilization of fixed assets.
For Axalta Coating Systems Ltd, the fixed asset turnover ratio has been relatively stable over the quarters, ranging from 3.82 to 4.38. This suggests that the company has been consistently efficient in generating sales from its fixed assets. The Q3 2023 ratio of 4.38 is the highest among the data points, indicating that the company was able to generate $4.38 in sales for every dollar invested in fixed assets during that quarter.
The total asset turnover ratio measures how efficiently a company uses all its assets to generate sales. A higher ratio indicates better asset utilization.
Axalta's total asset turnover ratio has also been relatively steady over the quarters, ranging from 0.64 to 0.73. This suggests that the company has been effective in utilizing its total assets to generate revenue. The Q3 2023 ratio of 0.73 is the highest among the data points, indicating that the company generated $0.73 in sales for every dollar of total assets during that quarter.
Overall, both the fixed asset turnover and total asset turnover ratios for Axalta Coating Systems Ltd indicate consistent efficiency in asset utilization over the quarters, which is a positive indicator of the company's operational performance and effectiveness in generating sales.