CNH Industrial N.V. (CNH)

Short-term

Turnover ratios

Inventory turnover for CNH Industrial N.V. has fluctuated over the past five years, ranging from 1.85 to 3.49. The ratio indicates how efficiently the company is managing its inventory by showing how many times it sells and replaces its inventory during a specific period. A higher ratio suggests more efficient inventory management.

Unfortunately, data for receivables turnover and payables turnover are not available, which limits the ability to assess how effectively the company is collecting receivables from customers and managing its payables to suppliers.

On the other hand, the working capital turnover ratio has shown consistency over the years, with values ranging from 0.94 to 2.37. This ratio reflects how effectively the company is using its working capital to generate revenue. A higher ratio implies better management of working capital and efficient utilization of resources to drive sales. CNH Industrial N.V.'s working capital turnover indicates a reasonable effectiveness in utilizing its resources to generate revenue.

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Average number of days

Days of inventory on hand (DOH) measures how many days it takes for the company to sell its inventory. A lower number indicates efficient inventory management.
- In 2023, CNH Industrial N.V. had 120.20 days of inventory on hand, indicating an increase compared to the previous year's 104.54 days. This suggests that the company is taking longer to sell its inventory, which may tie up capital and increase storage costs.
- However, when comparing to 2021, the DOH has improved slightly from 109.07 days to 120.20 days.
- The significant decrease in 2020 from 197.10 days to 109.07 days may have been due to improved inventory management strategies.

Days of sales outstanding (DSO) reflects how long it takes for the company to collect its receivables. A lower number is favorable as it indicates a faster collection period. Unfortunately, data for DSO is missing in all years provided, limiting a comprehensive analysis of the company's accounts receivable management.

Number of days of payables is not available in the table to evaluate how many days it takes for the company to pay its suppliers. Efficient payables management can have cash flow benefits, but without data, we cannot assess CNH Industrial N.V.'s payment practices over the years.

In summary, CNH Industrial N.V. has shown fluctuations in its inventory management efficiency over the years, with some improvements seen in inventory turnover. Data for accounts receivable and payables management is missing, limiting a holistic view of the company's overall working capital management.

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Long-term

The long-term activity ratios of CNH Industrial N.V. reflect the efficiency and utilization of its assets over the years.

1. Fixed asset turnover: The fixed asset turnover ratio measures how efficiently the company generates sales from its fixed assets. CNH's fixed asset turnover has shown fluctuating trends over the past five years. The ratio decreased from 22.66 in 2021 to 12.90 in 2023, indicating a potential decrease in the efficiency of utilizing fixed assets to generate sales. However, it is important to note that the ratio remains relatively high, suggesting that the company is still able to efficiently generate revenue from its fixed assets.

2. Total asset turnover: The total asset turnover ratio assesses how effectively the company utilizes all its assets to generate revenue. CNH's total asset turnover has also displayed variability over the period. The ratio significantly increased from 4.92 in 2021 to 0.53 in 2023, with fluctuations in between. This indicates that CNH has been able to generate higher revenue relative to its total assets in recent years.

Overall, while the fixed asset turnover has shown some decline, the total asset turnover has generally improved. This could suggest that CNH has been more effective in utilizing its total assets to generate revenue, even though there may be some inefficiencies in utilizing its fixed assets compared to previous years. Further analysis and consideration of other factors are necessary to fully assess the company's long-term activity performance.