Balchem Corporation (BCPC)

Short-term

Turnover ratios

Balchem Corporation's activity ratios provide insights into the efficiency of the company's operations.

1. Inventory Turnover: The inventory turnover ratio measures how many times a company sells and replaces its inventory within a specific period. Balchem's inventory turnover has shown a slight decline over the years, from 6.79 in 2020 to 4.72 in 2024. This indicates that the company may be holding onto inventory for a longer period or facing challenges in selling its products efficiently.

2. Receivables Turnover: The receivables turnover ratio reflects how quickly a company collects its accounts receivable. In this case, the data is not provided for Balchem, suggesting that detailed analysis regarding the efficiency of the company's receivables management cannot be made.

3. Payables Turnover: Similarly, data for the payables turnover ratio, which indicates how efficiently a company pays its suppliers, is not available for Balchem, preventing an analysis of the company's payables management efficiency.

4. Working Capital Turnover: The working capital turnover ratio shows how efficiently the company is using its working capital to generate sales. Balchem's working capital turnover has been steadily increasing from 4.08 in 2020 to 6.11 in 2024, indicating that the company is effectively utilizing its working capital to drive sales growth.

Overall, while Balchem Corporation's inventory turnover has declined, its working capital turnover has improved over the years, suggesting that the company is becoming more efficient in utilizing its resources to drive revenue generation. The lack of data for receivables and payables turnover ratios limits a comprehensive assessment of the company's overall operational efficiency.

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Average number of days

Balchem Corporation's Days of Inventory on Hand (DOH) has increased steadily over the years, from 53.73 days as of December 31, 2020, to 77.32 days as of December 31, 2024. This indicates that the company is holding inventory for a longer period, which may tie up capital and increase carrying costs.

The Days of Sales Outstanding (DSO) and Number of Days of Payables data are not available in the provided information, so it is challenging to assess the efficiency of the company in collecting receivables and managing its payables.

Overall, the increasing trend in the Days of Inventory on Hand is a concern as it suggests that Balchem Corporation may be facing challenges in efficiently managing its inventory levels. Further analysis of the missing data would be necessary to gain a more comprehensive understanding of the company's activity ratios.

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Long-term

To evaluate the long-term activity of Balchem Corporation, we will analyze the Fixed Asset Turnover and Total Asset Turnover ratios over the past five years.

1. Fixed Asset Turnover Ratio:
- The Fixed Asset Turnover ratio measures how efficiently the company generates sales from its investment in fixed assets.
- From 2020 to 2024, Balchem Corporation's Fixed Asset Turnover ratio has been steadily increasing, indicating that the company is utilizing its fixed assets more efficiently over time.
- The ratio increased from 3.08 in 2020 to 3.47 in 2022, reflecting an improvement in the company's ability to generate sales from its fixed assets.
- However, data is missing for 2023 and 2024, which may indicate a lack of available data or very recent financial reporting.

2. Total Asset Turnover Ratio:
- The Total Asset Turnover ratio indicates how effectively the company is using its total assets to generate sales.
- Balchem Corporation's Total Asset Turnover ratio fluctuated over the five-year period.
- The ratio increased from 0.60 in 2020 to 0.67 in 2021, suggesting an improvement in asset utilization.
- However, the ratio decreased in 2022 to 0.58, and remained at 0.58 in 2023, before slightly increasing to 0.61 in 2024.
- The varying Total Asset Turnover ratio may indicate changes in the company's sales volume relative to its total assets.

In conclusion, the analysis of Balchem Corporation's long-term activity ratios indicates a positive trend in fixed asset turnover efficiency over the years, despite fluctuations in total asset turnover. These ratios provide insights into how effectively the company is utilizing its assets to generate sales and maintain operational efficiency.