Cognex Corporation (CGNX)

Short-term

Turnover ratios

Cognex Corporation's inventory turnover has shown a declining trend over the years, decreasing from 8.50 in 2020 to 4.34 in 2024. This decreasing trend indicates that the company's efficiency in managing its inventory has declined, as it takes longer to sell its inventory.

On the other hand, the receivables turnover ratio has fluctuated but generally maintained within a moderate range, indicating that the company is efficient in collecting payments from its customers. The ratio was highest in 2022 at 7.87 but decreased slightly to 6.26 in 2024.

In terms of payables turnover, Cognex Corporation has shown some inconsistency in its payment practices to suppliers. The ratio was highest in 2020 at 31.79 but dropped significantly in 2021 to 13.40, indicating a change in the company's payment behavior. It has since shown some improvement but remains below the initial level with a ratio of 17.97 in 2024.

The working capital turnover ratio, which measures how effectively the company utilizes its working capital to generate sales, has fluctuated but remained relatively stable over the years. The ratio was highest in 2021 at 2.29 and lowest in 2023 at 1.57, showing some variability in the company's working capital utilization efficiency.

Overall, Cognex Corporation has shown mixed performance in its activity ratios, with varying trends in inventory turnover, receivables turnover, payables turnover, and working capital turnover. Monitoring these ratios can provide insights into the company's operational efficiency and effectiveness in managing its resources.

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Average number of days

Cognex Corporation's activity ratios indicate the efficiency of its operations over the years.

1. Days of Inventory on Hand (DOH):
- In 2020, the company held inventory for an average of 42.92 days, which increased to 69.94 days in 2021 before rising further to 74.36 days in 2022. This trend continued with 102.12 days in 2023 but improved slightly to 84.11 days in 2024.
- The increase in DOH over the years may suggest potential issues with inventory management and slower inventory turnover, which could tie up working capital and impact profitability.

2. Days of Sales Outstanding (DSO):
- The DSO decreased from 58.96 days in 2020 to 47.38 days in 2021, indicating faster collection of accounts receivable. This trend continued with 46.38 days in 2022 before slightly increasing to 51.55 days in 2023 and 58.35 days in 2024.
- The fluctuation in DSO may imply changes in the company's credit policy or the ability of customers to settle payments promptly.

3. Number of Days of Payables:
- Cognex Corporation took 11.48 days, 27.24 days, 16.45 days, 13.50 days, and 20.32 days to pay its accounts payable in 2020, 2021, 2022, 2023, and 2024 respectively.
- The variations in the days of payables could indicate changes in payment terms with suppliers or shifts in the company's cash flow management strategies.

Overall, analyzing these activity ratios collectively can provide insights into Cognex Corporation's effectiveness in managing its inventory, accounts receivable, and accounts payable, which are crucial components of its working capital cycle and overall operational performance.

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Long-term

The Fixed Asset Turnover ratio measures how efficiently a company generates revenue from its fixed assets. Cognex Corporation's Fixed Asset Turnover ratio has shown variability over the years, decreasing from 13.34 in 2021 to 7.80 in 2023 and then slightly increasing to 9.30 in 2024. This indicates that the company may have experienced fluctuations in utilizing its fixed assets to generate sales during this period.

On the other hand, the Total Asset Turnover ratio reflects the company's ability to generate sales from its total assets. Cognex Corporation's Total Asset Turnover ratio has ranged from 0.41 in 2023 to 0.52 in 2021, with a slight decrease to 0.46 in 2024. This demonstrates that the company may have faced challenges in efficiently utilizing its total assets to generate revenue consistently throughout the years.

Overall, the trends in Cognex Corporation's long-term activity ratios suggest that the company has experienced some fluctuations in its asset utilization efficiency, both in terms of fixed assets and total assets, which could potentially impact its overall operational performance and profitability.