CONMED Corporation (CNMD)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Inventory turnover | 1.79 | 1.43 | 1.91 | 2.06 | 2.61 |
| Receivables turnover | 5.14 | 5.46 | 5.50 | 4.87 | 5.05 |
| Payables turnover | 6.44 | 6.46 | 7.61 | 7.54 | 7.69 |
| Working capital turnover | 4.08 | 3.67 | 3.84 | 3.81 | 4.56 |
Conmed Corp.'s activity ratios provide insights into how efficiently the company is managing its resources.
1. Inventory turnover: The inventory turnover ratio indicates how many times inventory is sold and replaced over a period. Conmed Corp.'s inventory turnover has been fluctuating over the past five years, ranging from a low of 1.43 in 2022 to a high of 2.61 in 2019. A lower ratio may suggest excessive inventory levels or slow-moving inventory, while a higher ratio indicates efficient inventory management.
2. Receivables turnover: The receivables turnover ratio reflects how quickly the company collects outstanding receivables. Conmed Corp.'s receivables turnover has been relatively consistent, ranging from 4.87 in 2020 to 5.50 in 2021. A higher ratio generally indicates effective credit and collection policies.
3. Payables turnover: The payables turnover ratio measures how quickly the company pays its suppliers. Conmed Corp.'s payables turnover has been fairly stable, ranging from 6.44 in 2023 to 7.69 in 2019. A lower ratio may suggest a longer payment cycle, while a higher ratio could indicate efficient management of payment terms.
4. Working capital turnover: The working capital turnover ratio assesses how efficiently the company utilizes its working capital to generate sales. Conmed Corp.'s working capital turnover has fluctuated over the years, with a range from 3.67 in 2022 to 4.56 in 2019. A higher ratio generally indicates effective utilization of working capital.
Overall, Conmed Corp. should focus on monitoring and improving its inventory turnover to potentially reduce excess inventory or improve sales, while continuing its effective management of receivables, payables, and working capital turnover to maintain 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 | 204.38 | 255.78 | 191.03 | 176.86 | 139.61 |
| Days of sales outstanding (DSO) | days | 71.04 | 66.80 | 66.41 | 74.97 | 72.27 |
| Number of days of payables | days | 56.64 | 56.49 | 47.99 | 48.38 | 47.47 |
Conmed Corp.'s activity ratios provide insights into the efficiency of the company's operations and management of its working capital.
1. Days of Inventory on Hand (DOH): This ratio measures how many days it takes for Conmed Corp. to sell its inventory. A decreasing trend in DOH indicates that the company is managing its inventory more efficiently over the years. However, the sudden increase in 2022 followed by a decrease in 2023 may signify fluctuations in inventory management.
2. Days of Sales Outstanding (DSO): DSO reveals the average number of days it takes for Conmed Corp. to collect its accounts receivable. The lower the DSO, the better the company is at collecting payments from customers. A slight increase in DSO in 2023 compared to previous years may indicate potential issues with receivables management.
3. Number of Days of Payables: This ratio measures how long it takes for Conmed Corp. to pay its suppliers. A longer payment period can indicate stronger bargaining power with suppliers. The relatively stable trend in the number of days of payables suggests that the company has maintained consistency in managing its payables.
Overall, Conmed Corp. should continue to monitor and analyze these activity ratios to ensure efficient management of its working capital and optimize its operational efficiency.
Long-term
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Fixed asset turnover | 10.31 | 9.04 | 9.28 | 7.74 | 8.03 |
| Total asset turnover | 0.54 | 0.46 | 0.57 | 0.49 | 0.54 |
The long-term activity ratios of Conmed Corp., as reflected through its fixed asset turnover and total asset turnover ratios, provide insights into the company's efficiency in utilizing its assets to generate sales.
The fixed asset turnover ratio has exhibited a fluctuating trend over the past five years, with a notable increase in 2023 compared to the previous year. This indicates that Conmed Corp. generated $10.31 in sales for every dollar invested in fixed assets in 2023, reflecting improved efficiency in utilizing its long-term assets to drive revenue.
On the other hand, the total asset turnover ratio reflects a similar pattern of fluctuation, demonstrating a significant increase in 2021 followed by a slight decline in 2023. This ratio indicates that the company generated $0.54 in sales for every dollar of total assets in 2023, reflecting the effectiveness of Conmed Corp. in leveraging its overall asset base to generate revenue.
Overall, the increasing trend in both the fixed asset turnover and total asset turnover ratios suggests that Conmed Corp. has been improving its efficiency in managing its long-term assets and utilizing its overall asset base to drive sales growth over the years, albeit with some fluctuations in performance. This trend indicates a positive operational performance in terms of asset utilization and revenue generation efficiency.