Celanese Corporation (CE)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Inventory turnover | 4.08 | 2.92 | 4.29 | 5.03 | 5.11 |
| Receivables turnover | 5.38 | 3.87 | 4.77 | 4.18 | 4.83 |
| Payables turnover | 6.37 | 5.41 | 5.63 | 6.17 | 6.79 |
| Working capital turnover | 5.01 | 3.68 | 6.54 | 3.12 | 6.22 |
The analysis of Celanese Corp's activity ratios reveals the following trends over the past five years:
1. Inventory Turnover: The inventory turnover ratio has fluctuated over the years, ranging from a low of 2.60 in 2022 to a high of 4.52 in 2019. The ratio indicates the number of times inventory is sold and replaced within a specific period. A higher ratio suggests efficient management of inventory levels.
2. Receivables Turnover: The receivables turnover ratio has shown an upward trend, increasing from 4.71 in 2022 to 6.13 in 2023. This ratio reflects how quickly the company collects outstanding receivables from customers. A higher turnover indicates effective credit and collection policies.
3. Payables Turnover: The payables turnover ratio has remained relatively stable over the years, ranging from 4.80 in 2022 to 6.01 in 2019. This ratio measures how quickly the company pays its suppliers. A lower ratio may suggest favorable credit terms with suppliers.
4. Working Capital Turnover: The working capital turnover ratio has exhibited significant fluctuations, with a peak of 6.56 in 2021 and a low of 3.16 in 2020. This ratio indicates how efficiently the company utilizes its working capital to generate sales. A higher turnover ratio reflects effective management of working capital.
Overall, the analysis of Celanese Corp's activity ratios suggests varying levels of efficiency in managing inventory, collecting receivables, paying suppliers, and utilizing working capital over the past five years. An upward trend in receivables turnover and stable payables turnover may indicate improved liquidity management, while fluctuations in inventory turnover and working capital turnover warrant further investigation into operational efficiencies and financial performance.
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 | 89.50 | 124.81 | 85.13 | 72.63 | 71.48 |
| Days of sales outstanding (DSO) | days | 67.86 | 94.21 | 76.53 | 87.33 | 75.63 |
| Number of days of payables | days | 57.34 | 67.47 | 64.80 | 59.19 | 53.72 |
Analyzing Celanese Corp's activity ratios provides insights into how efficiently the company manages its inventory, accounts receivable, and accounts payable.
- Days of Inventory on Hand (DOH): The trend in Days of Inventory on Hand shows a fluctuating pattern over the last five years, increasing from 80.77 days in 2019 to 140.53 days in 2022 before decreasing to 103.19 days in 2023. A higher DOH indicates that Celanese may be carrying excess inventory, which ties up capital and could potentially lead to storage costs and obsolescence risks. The recent decrease in DOH in 2023 suggests an improvement in inventory management efficiency.
- Days of Sales Outstanding (DSO): The Days of Sales Outstanding ratio has also shown variability, with a peak of 80.16 days in 2020 and a low of 59.52 days in 2023. A higher DSO indicates that Celanese takes longer to collect on its sales, which may signal potential liquidity issues or credit risks. The downward trend in DSO from 2020 to 2023 suggests a positive development in the company's accounts receivable management.
- Number of Days of Payables: The trend in the Number of Days of Payables has been relatively stable over the years, ranging from 60.69 days in 2019 to 75.97 days in 2022. The ability to extend payment terms with suppliers can provide cash flow benefits to Celanese, allowing for better working capital management. However, excessively delaying payments may strain relationships with suppliers. The slight increase in the Number of Days of Payables from 2022 to 2023 indicates a potential shift in Celanese's payment practices.
Overall, while Celanese has experienced fluctuations in its activity ratios over the years, recent improvements in inventory and accounts receivable management suggest a positive trend towards enhancing operational efficiency and optimizing working capital utilization.
Long-term
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Fixed asset turnover | 1.92 | 1.67 | 2.03 | 1.42 | 1.69 |
| Total asset turnover | 0.40 | 0.36 | 0.71 | 0.51 | 0.66 |
The long-term activity ratios of Celanese Corp indicate how efficiently the company is utilizing its assets to generate sales.
1. Fixed Asset Turnover:
- The fixed asset turnover measures how efficiently the company is utilizing its fixed assets to generate revenue. A higher ratio indicates more efficient use of fixed assets.
- Celanese Corp's fixed asset turnover has fluctuated over the past five years. In 2023, the ratio improved to 1.96 from 1.73 in 2022, implying that the company generated $1.96 in sales for every $1 of fixed assets.
- The trend shows variability, with the ratio dropping to 1.44 in 2020 before increasing to 2.04 in 2021 and then decreasing to 1.96 in 2023.
2. Total Asset Turnover:
- The total asset turnover ratio measures how effectively the company is utilizing all its assets to generate revenue. A higher ratio indicates better asset utilization.
- Celanese Corp's total asset turnover has also varied over the past five years. In 2023, the ratio was 0.41, representing a decrease from the previous year.
- The trend shows some inconsistency, with the ratio reaching its highest at 0.71 in 2021 and its lowest point at 0.37 in 2022.
Overall, the analysis of Celanese Corp's long-term activity ratios suggests fluctuations in asset utilization efficiency over the years, with improvements in fixed asset turnover in 2023, but a decline in total asset turnover during the same period. Further investigation into the company's asset management practices and operational efficiency may be warranted to identify opportunities for improvement.