Benchmark Electronics Inc (BHE)

Short-term

Turnover ratios

Benchmark Electronics Inc's activity ratios provide insight into how efficiently the company manages its resources related to inventory, receivables, payables, and working capital over the years.

1. Inventory Turnover:
- The inventory turnover ratio measures how many times a company sells and replaces its inventory during a specific period.
- In 2020, the inventory turnover was relatively high at 5.74, indicating efficient inventory management.
- However, the ratio declined in the following years, reaching 3.62 in 2022 before slightly increasing to 4.31 in 2024.
- The decreasing trend suggests that Benchmark Electronics Inc may have experienced challenges in selling inventory efficiently in 2022 and 2023.

2. Receivables Turnover:
- The receivables turnover ratio shows how efficiently a company collects payments from its customers.
- Benchmark Electronics Inc's receivables turnover remained relatively stable over the years, ranging from 5.87 to 6.44.
- The consistency in this ratio indicates that the company efficiently collects payments from customers, which is a positive sign for its cash flow.

3. Payables Turnover:
- The payables turnover ratio measures how quickly a company pays its suppliers.
- Benchmark Electronics Inc's payables turnover decreased from 6.65 in 2020 to 4.80 in 2021 but then gradually increased to 6.74 in 2024.
- The improvement in payables turnover indicates that the company may have negotiated better credit terms with suppliers, allowing it to manage its payables more effectively.

4. Working Capital Turnover:
- The working capital turnover ratio reflects how effectively a company uses its working capital to generate sales.
- Benchmark Electronics Inc's working capital turnover ratio fluctuated slightly over the years, ranging from 2.85 to 3.25.
- The consistency in this ratio suggests that the company efficiently utilizes its working capital to support its operations and generate sales.

Overall, while Benchmark Electronics Inc faced challenges in inventory turnover in 2022 and 2023, the company demonstrated efficient management of receivables, payables, and working capital, which are crucial for maintaining healthy cash flow and operational efficiency.

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Average number of days

Based on the provided data, let's analyze Benchmark Electronics Inc's activity ratios:

1. Days of Inventory on Hand (DOH):
- The trend for DOH shows an increase from 63.62 days in 2020 to 100.96 days in 2022, indicating that the company is holding inventory for a longer period.
- However, there was a slight decrease in 2024 to 84.69 days, which might suggest improvement in inventory management efficiency.

2. Days of Sales Outstanding (DSO):
- DSO shows a relatively stable trend, with a slight increase from 55.07 days in 2020 to 62.21 days in 2022 before decreasing to 56.68 days in 2024.
- This indicates that the company has been efficient in collecting receivables and managing its accounts receivable turnover.

3. Number of Days of Payables:
- The trend for the number of days of payables shows fluctuations, with a significant increase in 2021 to 75.97 days, followed by a decrease to 52.23 days in 2023.
- This suggests that the company may have extended the payment period to suppliers in 2021 but then managed to reduce it in the following years.

Overall, Benchmark Electronics Inc has shown some variability in its activity ratios over the years. The company should focus on optimizing its inventory holding period, maintaining a stable accounts receivable turnover, and effectively managing its payables to improve its working capital management and overall operational efficiency.

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Long-term

The analysis of Benchmark Electronics Inc's long-term activity ratios reveals the following trends:

1. Fixed Asset Turnover: The fixed asset turnover ratio measures how efficiently the company generates revenue from its fixed assets. From 2020 to 2024, Benchmark Electronics Inc's fixed asset turnover ratio has shown an increasing trend, indicating that the company has been able to generate more revenue per dollar of fixed assets invested. The ratio increased from 11.08 in 2020 to 13.65 in 2022, before slightly declining to 11.80 in 2024. Overall, the company has effectively utilized its fixed assets to generate revenue during this period.

2. Total Asset Turnover: The total asset turnover ratio evaluates how efficiently the company utilizes its total assets to generate sales. Benchmark Electronics Inc's total asset turnover ratio has remained relatively stable from 2020 to 2024, with minor fluctuations. The ratio stayed at 1.18 in 2020 and 2021, before increasing to 1.30 in 2022 and then decreasing to 1.24 in 2024. This suggests that the company has been able to maintain a consistent level of revenue generation per dollar of total assets over the years.

In summary, Benchmark Electronics Inc has exhibited a positive trend in its fixed asset turnover ratio, indicating improved efficiency in utilizing fixed assets to drive revenue. The company's total asset turnover ratio has remained relatively stable, showing consistent performance in utilizing total assets to generate sales.