ChampionX Corporation (CHX)

Short-term

Turnover ratios

Based on the provided data, we can analyze ChampionX Corporation's activity ratios as follows:

1. Inventory Turnover:
- The inventory turnover ratio measures how efficiently a company manages its inventory. ChampionX Corporation's inventory turnover has been increasing steadily from 3.47 in 2020 to 4.92 in 2024. This suggests that the company is selling its inventory more frequently over the years.

2. Receivables Turnover:
- The receivables turnover ratio reflects how quickly a company collects its accounts receivables. ChampionX Corporation's receivables turnover has shown a consistent improvement, increasing from 3.40 in 2020 to 7.79 in 2024. This indicates that the company is collecting its receivables at a faster rate.

3. Payables Turnover:
- The payables turnover ratio assesses how quickly a company pays its suppliers. ChampionX Corporation's payables turnover has been relatively stable, with a slight increase from 4.97 in 2020 to 5.37 in 2024. This suggests the company has been managing its payables effectively.

4. Working Capital Turnover:
- The working capital turnover ratio measures how efficiently a company utilizes its working capital. ChampionX Corporation's working capital turnover has fluctuated but maintained a relatively stable trend, ranging from 2.95 in 2020 to 5.95 in 2022. This indicates the company's effective management of working capital in generating sales.

In summary, ChampionX Corporation has shown improvements in its inventory turnover, receivables turnover, and working capital turnover ratios, indicating better efficiency in managing inventory, collecting receivables, and utilizing working capital. The payables turnover ratio has remained stable, reflecting effective management of payables. Overall, the company's activity ratios demonstrate positive trends in operational efficiency and financial management.

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Average number of days

ChampionX Corporation's activity ratios indicate the efficiency of the company in managing its inventory, receivables, and payables.

1. Days of Inventory on Hand (DOH):
- The trend in the Days of Inventory on Hand has been improving over the years, decreasing from 105.31 days in 2020 to 74.16 days in 2024. This suggests that ChampionX has been able to manage its inventory more effectively, reducing the number of days it takes to sell the inventory on hand.

2. Days of Sales Outstanding (DSO):
- ChampionX has significantly improved its Days of Sales Outstanding, reducing it from 107.49 days in 2020 to 46.88 days in 2024. This indicates that the company is collecting its receivables faster, which is a positive sign of effective credit management and liquidity.

3. Number of Days of Payables:
- The Number of Days of Payables has fluctuated over the years but has relatively remained stable. It decreased from 73.37 days in 2020 to 58.95 days in 2022 but then increased to 68.00 days in 2024. This may indicate changes in the company's payment terms with suppliers.

Overall, the trends in these activity ratios suggest that ChampionX Corporation has been improving its efficiency in managing inventory, receivables, and payables, which can contribute to better working capital management and operational performance.

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Long-term

ChampionX Corporation has shown a significant improvement in its fixed asset turnover ratio over the years, increasing from 2.22 in 2020 to 5.18 in 2024. This indicates that the company has been able to generate more sales revenue relative to its investment in fixed assets, reflecting improved efficiency in utilizing its long-term assets to generate sales.

In terms of total asset turnover, ChampionX has also displayed a positive trend, rising from 0.55 in 2020 to 1.05 in 2024. This increase suggests that the company has become more efficient in generating sales revenue relative to its total assets over the years.

Overall, the long-term activity ratios of ChampionX Corporation demonstrate a strengthening operational performance and asset utilization efficiency, which is generally viewed positively by investors and stakeholders.