Chemours Co (CC)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Inventory turnover | 4.59 | 4.41 | 5.53 | 4.90 | 5.06 |
| Receivables turnover | 9.54 | 10.60 | 8.53 | 9.27 | 7.89 |
| Payables turnover | 5.36 | 5.02 | 5.23 | 5.45 | 5.92 |
| Working capital turnover | 4.31 | 5.02 | 4.13 | 3.98 | 4.30 |
Inventory turnover for Chemours Co has shown consistency over the past five years, indicating that the company efficiently manages its inventory levels. The slight fluctuations in inventory turnover may be a result of changes in sales or production processes.
Receivables turnover has also been relatively stable, with a decreasing trend from 2019 to 2021 followed by a slight increase in 2022 and 2023. This suggests that Chemours Co effectively collects payments from its customers, although there could have been some changes in credit policies or customer payment behavior.
Payables turnover has shown some variability, but overall remained relatively consistent, indicating that the company effectively manages its accounts payable by paying suppliers in a timely manner. The decrease from 2019 to 2022 may suggest changes in supplier relationships or payment terms.
Working capital turnover has fluctuated over the years, showing a general declining trend from 2019 to 2021, followed by a slight increase in 2022 and 2023. This ratio measures how effectively the company utilizes its working capital to generate sales. The fluctuations in working capital turnover could be influenced by changes in sales volume or working capital management strategies.
Overall, the activity ratios suggest that Chemours Co has been effectively managing its inventory, accounts receivable, accounts payable, and working capital to support its operations and generate sales. However, further analysis and comparison with industry benchmarks may provide more insights into the company's operational efficiency.
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 | 79.45 | 82.80 | 65.97 | 74.46 | 72.10 |
| Days of sales outstanding (DSO) | days | 38.27 | 34.42 | 42.81 | 39.37 | 46.26 |
| Number of days of payables | days | 68.11 | 72.72 | 69.75 | 66.93 | 61.68 |
Activity ratios provide insight into how efficiently a company manages its assets and liabilities to generate sales. Let's analyze Chemours Co's activity ratios based on the data provided:
1. Days of Inventory on Hand (DOH):
- The trend in DOH shows an increase from 2019 to 2022, indicating a potential inefficiency in managing inventory levels.
- However, in 2023, there was a slight decrease compared to the previous year, which could suggest improved inventory management efficiency.
- A higher DOH indicates that inventory is held for a longer period before being sold, tying up capital and potentially leading to obsolete inventory concerns.
2. Days of Sales Outstanding (DSO):
- DSO measures how long it takes for the company to collect payments from its customers.
- The trend in DSO shows fluctuations over the years, with a decrease in 2022 followed by an increase in 2023.
- A lower DSO is favorable as it indicates quicker collection of receivables, improving cash flow and liquidity.
3. Number of Days of Payables:
- Days of payables represent how long it takes for the company to pay its suppliers.
- The trend in payables days has been fluctuating over the years without a clear pattern.
- A higher number of days of payables can indicate that the company is taking longer to settle its payables, potentially improving cash flow but also straining supplier relationships.
In conclusion, Chemours Co should focus on optimizing its inventory levels to reduce DOH, improving collections to lower DSO, and efficiently managing payables to maintain supplier relationships while enhancing cash flow.
Long-term
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Fixed asset turnover | 1.81 | 2.09 | 1.95 | 1.36 | 1.49 |
| Total asset turnover | 0.71 | 0.87 | 0.81 | 0.67 | 0.73 |
The fixed asset turnover ratio measures how efficiently a company generates sales from its investments in fixed assets. Chemours Co's fixed asset turnover has been relatively stable over the past five years, ranging from 1.36 to 2.09.
A higher fixed asset turnover ratio indicates that Chemours is effectively utilizing its fixed assets to generate sales. In this case, the company's fixed asset turnover ratio has shown a slight decrease in recent years, which may suggest a less efficient utilization of fixed assets compared to earlier periods.
On the other hand, the total asset turnover ratio reflects the efficiency with which Chemours is using all its assets to generate sales. The total asset turnover ratio has also fluctuated over the past five years, from 0.67 to 0.87.
A lower total asset turnover ratio suggests that Chemours may not be efficiently utilizing its total assets to generate sales. The trend of the total asset turnover ratio increasing from 0.67 in 2020 to 0.87 in 2022 and then slightly decreasing to 0.71 in 2023 indicates that the company may have improved its overall asset utilization but experienced a slight decline in the most recent year.
Overall, the fixed asset turnover and total asset turnover ratios provide insights into how effectively Chemours Co is utilizing its assets to generate sales. Investors and stakeholders may monitor these ratios to assess the company's operational efficiency and asset management strategies over time.