Belden Inc (BDC)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Inventory turnover | 4.24 | 4.95 | 4.43 | 4.76 | 5.78 |
| Receivables turnover | 6.07 | 5.92 | 6.00 | 5.90 | 6.37 |
| Payables turnover | 4.54 | 4.83 | 4.05 | 4.82 | 4.98 |
| Working capital turnover | 3.05 | 2.91 | 2.05 | 3.03 | 3.25 |
Based on the activity ratios of Belden Inc for the years 2019 to 2023:
1. Inventory turnover:
- The inventory turnover ratio measures how efficiently a company manages its inventory. Belden Inc's inventory turnover has ranged from 4.24 to 5.78 over the past five years, indicating that the company has been able to sell and replace its inventory multiple times during each year. A higher inventory turnover ratio generally indicates better inventory management.
2. Receivables turnover:
- The receivables turnover ratio shows how effectively a company collects cash from its credit sales. Belden Inc's receivables turnover has consistently ranged from 5.84 to 6.37, suggesting that the company efficiently collects payments from its customers. A higher receivables turnover ratio signifies that the company is efficient in collecting outstanding receivables.
3. Payables turnover:
- The payables turnover ratio reflects how quickly a company pays off its suppliers. Belden Inc's payables turnover has fluctuated between 4.04 and 4.98, indicating the speed at which the company pays its suppliers. A higher payables turnover ratio suggests that the company is managing its payables effectively and potentially taking advantage of credit terms.
4. Working capital turnover:
- The working capital turnover ratio measures how efficiently a company generates revenue relative to its working capital. Belden Inc's working capital turnover has remained relatively stable around 3.0 to 3.25 over the past five years, indicating that the company generates revenue efficiently with its working capital. A higher working capital turnover ratio implies that the company is effectively utilizing its working capital to generate sales.
Overall, based on the activity ratios analysis, Belden Inc appears to have efficient inventory management, effective collection of receivables, and prudent management of payables. The working capital turnover also suggests that the company is generating revenue efficiently relative to its working capital.
Average number of days
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 86.02 | 73.76 | 82.38 | 76.72 | 63.12 |
| Days of sales outstanding (DSO) | days | 60.13 | 61.63 | 60.82 | 61.83 | 57.31 |
| Number of days of payables | days | 80.45 | 75.60 | 90.15 | 75.73 | 73.25 |
To analyze Belden Inc's activity ratios, we will focus on three key metrics: Days of Inventory on Hand (DOH), Days of Sales Outstanding (DSO), and Number of Days of Payables.
1. Days of Inventory on Hand (DOH):
DOH measures how many days it takes for a company to sell its average inventory. A lower DOH indicates that inventory is moving more quickly, which is generally preferable as it minimizes the risk of obsolete inventory and tied-up working capital. Belden Inc's DOH has been increasing over the past five years, from 63.12 days in 2019 to 86.02 days in 2023. This suggests that Belden Inc may be carrying excess inventory or facing challenges in managing its inventory efficiently.
2. Days of Sales Outstanding (DSO):
DSO measures how long it takes for a company to collect its accounts receivable. A lower DSO is desirable as it indicates faster cash collection. Belden Inc's DSO has fluctuated over the past five years, with a slight increase from 57.31 days in 2019 to 60.13 days in 2023. While the increase is relatively moderate, Belden Inc may need to focus on improving its accounts receivable collection processes to enhance cash flow efficiency.
3. Number of Days of Payables:
The Number of Days of Payables metric reflects the number of days it takes for a company to pay its suppliers. A higher number of days indicates that the company is taking longer to settle its payables, which can be beneficial for cash flow management. Belden Inc's Days of Payables have shown variability over the past five years, with an increase from 73.25 days in 2019 to 80.45 days in 2023. The increase in days of payables could signify a shift towards more extended payment terms with suppliers.
In summary, Belden Inc's activity ratios indicate some areas that require attention. The company should focus on optimizing its inventory management processes to reduce DOH, enhancing accounts receivable collection to lower DSO, and closely monitoring payment terms to manage working capital effectively. Rebalancing these activity ratios can potentially improve cash flow, working capital efficiency, and overall financial performance.
Long-term
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Fixed asset turnover | 5.57 | 6.83 | 6.70 | 4.75 | 6.16 |
| Total asset turnover | 0.78 | 0.82 | 0.67 | 0.56 | 0.63 |
The fixed asset turnover ratio for Belden Inc has fluctuated over the past five years, ranging from 5.05 to 6.88. This ratio indicates the efficiency with which the company is utilizing its fixed assets to generate sales. A higher fixed asset turnover ratio suggests that the company is effectively utilizing its fixed assets to generate revenue.
On the other hand, the total asset turnover ratio has also varied, ranging from 0.59 to 0.82. This ratio reflects how efficiently the company is generating sales from all its assets, both fixed and current. A higher total asset turnover ratio indicates that the company is generating more sales for each dollar of assets it owns.
Overall, while the fixed asset turnover ratios have shown some fluctuations, they generally indicate a good level of efficiency in utilizing fixed assets to generate revenue. The total asset turnover ratios have also improved over the years, suggesting that Belden Inc is becoming more effective in generating sales from all its assets.