Baxter International Inc (BAX)

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	5.63	5.53	6.35	6.12	6.72	6.54	5.10	4.99	4.70	3.90	3.71	3.67	3.77	3.22	3.28	3.73	3.75	5.38	5.26	5.26
Receivables turnover	5.18	5.93	6.00	5.91	5.32	5.78	—	—	4.50	—	—	—	5.13	—	—	—	5.57	—	—	—
Payables turnover	12.80	12.76	14.84	13.87	16.22	14.18	10.60	10.40	9.26	7.90	7.63	7.23	6.93	—	—	—	6.95	—	—	—
Working capital turnover	4.82	2.56	6.13	4.51	4.64	3.60	3.59	3.16	2.75	2.61	2.59	2.50	2.26	2.04	1.99	2.17	2.65	2.42	2.38	3.99

Inventory turnover measures how effectively a company is managing its inventory. Baxter International Inc. has maintained a consistent inventory turnover around 3.4 to 3.6 times per year, indicating that its inventory is being efficiently sold and replaced.

Receivables turnover reflects how quickly a company collects on its credit sales. Baxter International Inc. has shown a slight increase in its receivables turnover from Q1 2022 to Q3 2023, suggesting improved efficiency in collecting outstanding receivables.

Payables turnover assesses how efficiently a company pays its suppliers. Baxter International Inc. has seen fluctuations in its payables turnover, with a decrease in Q2 2022 followed by an upward trend in the subsequent quarters, indicating changes in payment practices or supplier relationships.

Working capital turnover ratio measures how effectively a company uses its working capital to generate revenue. Baxter International Inc. has shown variability in its working capital turnover, with a notable increase in Q3 2023 compared to the previous quarters, suggesting improved utilization of its working capital.

Overall, Baxter International Inc. appears to be managing its inventory efficiently, collecting on credit sales at a steady pace, and effectively using its working capital. However, fluctuations in payables turnover may warrant closer attention to optimize cash flow management.

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	64.88	65.98	57.45	59.62	54.32	55.80	71.55	73.15	77.61	93.67	98.31	99.49	96.77	113.38	111.22	97.80	97.35	67.82	69.38	69.40
Days of sales outstanding (DSO)	days	70.46	61.54	60.88	61.76	68.55	63.12	—	—	81.08	—	—	—	71.15	—	—	—	65.53	—	—	—
Number of days of payables	days	28.51	28.61	24.59	26.32	22.51	25.74	34.44	35.11	39.42	46.21	47.84	50.46	52.68	—	—	—	52.53	—	—	—

Activity ratios provide insights into how efficiently a company is managing its assets and liabilities to generate revenues. Let's analyze the activity ratios of Baxter International Inc. based on the provided data:

1. Days of Inventory on Hand (DOH):
- The trend in DOH shows an increase from Q1 2023 to Q4 2023, indicating that Baxter International is holding inventory for a longer period.
- This increase may suggest potential issues with inventory management, such as overstocking or slow-moving inventory.
- A high DOH ratio could tie up capital in inventory and increase storage costs.

2. Days of Sales Outstanding (DSO):
- The trend in DSO indicates a fluctuation but relatively stable collection process from customers.
- A decrease in DSO from Q4 2022 to Q3 2023 suggests the company is collecting receivables more efficiently during those periods.
- However, DSO increased in Q4 2023, indicating a potential delay in collecting payments from customers.

3. Number of Days of Payables:
- The trend in the number of days of payables shows variability but stayed within a relatively consistent range.
- A higher number of days of payables may indicate that Baxter International is taking longer to pay its suppliers.
- Delayed payments to suppliers could strain relationships or result in missed discounts but may also help manage cash flows in the short term.

Overall, Baxter International Inc. may want to focus on improving inventory management to reduce DOH, maintain efficient collections to manage DSO effectively, and strategically manage payables to optimize cash flow while maintaining vendor relationships.

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	3.37	3.48	3.33	3.01	3.23	3.08	2.86	2.65	2.46	2.69	2.59	2.53	2.43	2.57	2.59	2.64	2.51	2.53	2.48	2.48
Total asset turnover	0.53	0.49	0.54	0.53	0.54	0.53	0.45	0.41	0.38	0.62	0.61	0.60	0.57	0.57	0.58	0.60	0.62	0.64	0.63	0.68

The fixed asset turnover ratio for Baxter International Inc. has been relatively stable over the past eight quarters, ranging from 2.65 to 3.49. This indicates that the company generates between $2.65 and $3.49 in revenue for every dollar invested in fixed assets. The consistent values suggest that Baxter is efficiently utilizing its fixed assets to generate sales.

On the other hand, the total asset turnover ratio has also shown consistency, albeit at a lower level compared to the fixed asset turnover. The ratio has fluctuated between 0.41 and 0.54, implying that Baxter generates between $0.41 and $0.54 in revenue for every dollar invested in total assets. While the values are lower than the fixed asset turnover ratio, the stability in this metric indicates that the company is effectively using its total assets to generate sales.

Overall, the long-term activity ratios suggest that Baxter International Inc. is efficiently utilizing both its fixed and total assets to generate revenue, with relatively stable turnover ratios over the examined quarters.