Cabot Corporation (CBT)

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 4.94 5.29 5.48 5.46 4.90 5.17 4.92 4.83 5.18 4.99 4.94 4.94 5.16 5.89 5.72 5.28 5.39 5.69 5.09 4.72
Receivables turnover 5.40 5.66 5.93 5.55 5.54 5.17 4.70 4.91 5.50 5.29 5.00 4.78 5.13 6.25 7.69 6.73 6.69 6.30 5.50 6.07
Payables turnover — 7.06 — — — 6.45 — — — 5.44 — — — 6.69 — — — 6.80 — —
Working capital turnover 4.55 4.89 4.72 5.08 5.29 6.04 5.33 10.46 12.88 12.26 4.75 4.79 4.74 5.82 5.69 5.11 5.21 5.46 4.87 8.64

Cabot Corp.'s activity ratios provide insights into how efficiently the company is managing its assets and liabilities to generate sales and optimize working capital.

1. Inventory Turnover: The trend in Cabot Corp.'s inventory turnover indicates a relatively stable performance, with values ranging between 4.90 and 5.48 over the past eight quarters. The company is able to turn over its inventory roughly 5 times a year, indicating efficient management of its inventory levels.

2. Receivables Turnover: Cabot Corp.'s receivables turnover has also shown consistency, fluctuating between 5.17 and 5.93. This suggests that the company is successful in collecting its accounts receivable approximately 5 to 6 times per year, showcasing effective credit management practices.

3. Payables Turnover: Limited data is available for Cabot Corp.'s payables turnover, with values reported only for Q4 2022 and Q4 2023. A payables turnover ratio of 6.45 to 7.06 indicates that the company is managing its trade payables effectively by settling them roughly 6 to 7 times per year.

4. Working Capital Turnover: Cabot Corp.'s working capital turnover ratio has displayed variability over the past eight quarters, ranging from 4.55 to 10.46. A higher working capital turnover indicates that the company is efficiently utilizing its working capital to generate sales, with a peak observed in Q2 2022.

Overall, Cabot Corp.'s activity ratios suggest that the company is effectively managing its resources, maintaining optimal levels of inventory, receivables, and payables to support its operations and drive sales.

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 73.89 69.06 66.61 66.84 74.48 70.54 74.12 75.53 70.50 73.14 73.88 73.95 70.68 61.98 63.81 69.19 67.69 64.14 71.75 77.27
Days of sales outstanding (DSO) days 67.53 64.53 61.58 65.73 65.85 70.62 77.74 74.39 66.35 69.06 73.02 76.30 71.11 58.37 47.49 54.24 54.59 57.97 66.37 60.13
Number of days of payables days — 51.70 — — — 56.62 — — — 67.13 — — — 54.56 — — — 53.68 — —

Cabot Corp.'s activity ratios reflect its efficiency in managing inventory, collecting receivables, and paying its suppliers.

1. Days of Inventory on Hand (DOH): The trend shows that Cabot Corp. has been gradually reducing the number of days inventory is held, which indicates better management of its inventory levels. This can help improve cash flow by reducing carrying costs and potential obsolescence.

2. Days of Sales Outstanding (DSO): The trend in DSO shows that Cabot Corp. has been successful in collecting receivables more quickly over the periods reported. A decreasing trend in DSO suggests effective credit management, timely collections, and possibly, more aggressive strategies in ensuring prompt payment from customers.

3. Number of Days of Payables: The data provided does not include consistent information on days payables outstanding. However, in the periods where data is available, there seems to be an effort to extend payment periods to suppliers, as shown by the increasing trend in days payables outstanding. This can be a strategic move to preserve cash flow and improve working capital management.

Overall, the activity ratios indicate that Cabot Corp. is making improvements in its operational efficiency, leading to better utilization of resources and potentially enhancing profitability in the long run. It is essential to continue monitoring these ratios to ensure sustained efficiency in the company's operations.

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 2.72 2.78 2.99 3.15 3.31 3.40 3.23 3.01 2.87 2.48 2.33 2.07 1.95 1.99 1.97 2.27 2.32 2.48 2.51 2.60
Total asset turnover 1.06 1.09 1.20 1.21 1.22 1.23 1.15 1.10 1.10 1.03 0.98 0.91 0.88 0.94 0.92 1.00 1.03 1.11 1.08 1.03

The fixed asset turnover ratio measures how effectively a company is utilizing its fixed assets to generate sales. By looking at the data provided for Cabot Corp., we observe a consistent decline in the fixed asset turnover ratio over the past eight quarters. The ratio has decreased from 3.40 in Q4 2022 to 2.72 in Q1 2024, indicating that the company is generating less revenue per dollar of fixed assets.

On the other hand, the total asset turnover ratio reflects how efficiently a company is using all its assets to generate sales. In the case of Cabot Corp., the total asset turnover ratio has also shown a declining trend, albeit less steep than the fixed asset turnover ratio. It decreased from 1.23 in Q4 2022 to 1.06 in Q1 2024. This suggests that the company's overall efficiency in generating sales from all its assets has decreased over the period.

Both ratios indicate a decreasing trend in Cabot Corp.'s long-term activity efficiency. This may signal potential issues with asset utilization and operational efficiency that warrant further investigation and corrective action by the company's management.