Boston Scientific Corp (BSX)

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	5.08	5.76	6.42	5.04
Receivables turnover	6.27	6.19	6.54	6.24	5.35
Payables turnover	11.18	11.00	11.68	16.90	14.69
Working capital turnover	8.84	6.23	5.69	3.17	—

Boston Scientific Corp.'s activity ratios provide insight into the efficiency of the company in managing its assets and liabilities.

1. Inventory Turnover: The inventory turnover ratio has been declining over the past five years, indicating that Boston Scientific Corp. is taking longer to sell its inventory. A lower inventory turnover ratio may suggest overstocking or slower sales, potentially leading to increased holding costs or obsolescence risk.

2. Receivables Turnover: The receivables turnover ratio has been relatively consistent over the years, indicating that the company is efficient in collecting payments from customers. A higher turnover ratio suggests that Boston Scientific Corp. is effective in managing its credit policies and collecting receivables promptly.

3. Payables Turnover: The payables turnover ratio has fluctuated over the years, with a significant decrease in 2020 followed by a recovery in 2021. A higher payables turnover ratio suggests that the company is taking longer to pay its suppliers, potentially affecting relationships with vendors. However, a too low ratio may also indicate potential liquidity issues.

4. Working Capital Turnover: The working capital turnover ratio has shown an increasing trend, indicating that Boston Scientific Corp. is generating more revenue relative to its working capital. A higher turnover ratio suggests better utilization of working capital to generate sales, which is a positive sign of operational efficiency.

Overall, while the company's receivables turnover and working capital turnover ratios are relatively healthy, there may be improvements needed in managing inventory levels and payables turnover to enhance efficiency and optimize working capital utilization.

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	86.05	71.87	63.39	56.87	72.37
Days of sales outstanding (DSO)	days	58.19	58.99	55.83	58.50	68.18
Number of days of payables	days	32.63	33.18	31.26	21.59	24.84

Activity ratios provide insights into how effectively a company is managing its assets and liabilities to generate sales. Let's analyze the activity ratios of Boston Scientific Corp. over the past five years:

1. Days of Inventory on Hand (DOH):
- The DOH measures how many days, on average, inventory is held before being sold.
- Boston Scientific Corp.'s inventory days have shown an increasing trend from 2019 to 2023, indicating that inventory turnover has slowed down.
- In 2023, the company held inventory for approximately 208.67 days, which is higher compared to the previous years.

2. Days of Sales Outstanding (DSO):
- The DSO ratio reflects the average number of days it takes for the company to collect payment after making a sale.
- Boston Scientific Corp.'s DSO remained relatively stable over the five-year period, fluctuating between 54.59 to 62.15 days.
- In 2023, the company took around 57.11 days to collect payments from its customers.

3. Number of Days of Payables:
- This ratio shows the average number of days it takes for a company to pay its suppliers.
- Boston Scientific Corp.'s payables days have been inconsistent over the years, with fluctuations in the range of 54.04 to 79.53 days.
- In 2023, the company took approximately 79.13 days to settle its payables obligations.

Overall, the analysis of these activity ratios suggests that Boston Scientific Corp. has been experiencing challenges in efficiently managing its inventory levels, collection of receivables, and payment to suppliers in 2023. The company may need to focus on optimizing its inventory management, receivables collection processes, and payables payment strategies to improve its operational efficiency and liquidity position.

Long-term

	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Fixed asset turnover	4.89	4.98	5.16	4.58	4.98
Total asset turnover	0.40	0.38	0.36	0.31	0.34

The long-term activity ratios of Boston Scientific Corp. provide insights into how efficiently the company is utilizing its fixed and total assets to generate revenue over the years.

The fixed asset turnover ratio measures how effectively the company is using its fixed assets to generate sales. The trend shows a slight fluctuation but remains relatively stable, ranging between 4.76 and 5.28. This indicates that Boston Scientific is efficiently utilizing its fixed assets to generate revenue. A higher fixed asset turnover ratio signifies better asset utilization.

On the other hand, the total asset turnover ratio reflects the company's ability to generate sales from all its assets. The trend indicates an increasing trend over the years from 0.32 in 2020 to 0.41 in 2023. This improvement suggests that Boston Scientific is becoming more efficient in generating revenue from its total assets.

Overall, both ratios reflect positively on Boston Scientific's operational efficiency in utilizing its assets to drive sales and generate revenue over the years. The stable and increasing trends in the fixed asset turnover and total asset turnover ratios, respectively, indicate that the company is effectively managing its assets to maximize operational performance.