Crane Company (CR)

Short-term

Turnover ratios

Based on the data provided for Crane Company's activity ratios, here is a detailed analysis:

1. Inventory Turnover:
- The inventory turnover ratio measures how efficiently a company manages its inventory. It indicates how many times the company's inventory is sold and replaced over a specific period.
- From 2020 to 2024, Crane Company's inventory turnover has been relatively stable, ranging from 3.32 to 4.63 times per year.
- A higher inventory turnover ratio generally signifies that the company is efficiently managing its inventory. However, a decreasing trend in this ratio could indicate possible issues with overstocking or slowing sales.

2. Receivables Turnover:
- The receivables turnover ratio shows how many times a company collects its accounts receivable balance in a given period.
- The data shows that receivables turnover is not available for the years provided (indicated by "—"). This could suggest that there is no accounts receivable or that the data is not provided.
- Without this information, it is difficult to assess how quickly Crane Company is collecting payments from its customers.

3. Payables Turnover:
- The payables turnover ratio measures how quickly a company pays its suppliers for goods or services purchased on credit.
- Similar to receivables turnover, payables turnover data is not available for the years provided.
- The absence of payables turnover data limits our ability to evaluate how effectively Crane Company manages its trade payables.

4. Working Capital Turnover:
- The working capital turnover ratio calculates how efficiently a company utilizes its working capital to generate sales.
- Crane Company's working capital turnover has fluctuated significantly over the years, from 2.48 to 15.29 in 2024 and 2022 respectively.
- A higher working capital turnover ratio indicates that the company is effectively utilizing its resources to generate revenue. On the other hand, a lower ratio may suggest inefficient utilization of working capital.

In conclusion, while Crane Company's inventory turnover has remained relatively steady, the lack of data for receivables turnover and payables turnover hinders a comprehensive analysis of the company's efficiency in managing its receivables and payables. The fluctuations in working capital turnover highlight the fluctuating efficiency in utilizing working capital to generate sales.

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Average number of days

The activity ratios of Crane Company indicate trends in the company's efficiency in managing its inventory, sales, and payables over the years.

1. Days of Inventory on Hand (DOH):
- The DOH measures how many days, on average, inventory is held before being sold.
- In 2020, the company had 82.69 days of inventory on hand, which increased slightly to 83.00 days in 2021 before decreasing to 78.88 days in 2022.
- However, there was a significant increase in 2023, with 100.58 days of inventory on hand, followed by a further rise to 109.90 days in 2024.
- The increasing trend from 2022 onwards indicates potential issues with inventory management and potential risks related to obsolete or slow-moving inventory.

2. Days of Sales Outstanding (DSO):
- DSO measures the average number of days it takes for the company to collect revenue after a sale has been made.
- The data shows "\u2014 days" for all years, which might indicate that the company uses cash sales or operates on a prepayment basis, resulting in no outstanding sales receivables.

3. Number of Days of Payables:
- This ratio indicates how long it takes the company to pay its suppliers.
- Similar to DSO, the data shows "\u2014 days" for all years, suggesting that the company might be paying its suppliers promptly or on shorter credit terms.

Overall, the analysis of these activity ratios suggests that Crane Company might have effective accounts receivable and payable management strategies. However, the significant increase in days of inventory on hand in recent years could be a red flag, requiring further investigation into the company's inventory management practices and potential impacts on working capital and cash flow.

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Long-term

Crane Company's long-term activity ratios, specifically the Fixed Asset Turnover and Total Asset Turnover, show the efficiency of the company in utilizing its assets to generate sales revenue.

1. Fixed Asset Turnover:
- The Fixed Asset Turnover ratio measures how effectively a company is using its fixed assets to generate sales.
- From the data provided, we see an increasing trend in the Fixed Asset Turnover ratio over the years: from 8.92 in 2020 to 13.59 in 2022.
- The significant increase in the Fixed Asset Turnover ratio indicates that Crane Company has been able to generate more sales revenue for each dollar invested in fixed assets.
- The absence of data for 2023 and 2024 may suggest that there could be changes or challenges within the company that have impacted the calculation of this ratio for those years.

2. Total Asset Turnover:
- The Total Asset Turnover ratio measures how efficiently a company is using all its assets to generate revenue.
- The trend for Crane Company's Total Asset Turnover ratio shows some fluctuations: from 0.64 in 2020 to 0.89 in 2023 and then slightly decreasing to 0.81 in 2024.
- The increase in the Total Asset Turnover ratio from 2020 to 2023 indicates that the company has been able to generate more revenue relative to its total assets during those years.
- The slight decrease in the Total Asset Turnover ratio in 2024 may indicate a potential inefficiency in utilizing total assets to generate sales revenue compared to the previous year.

In conclusion, the analysis of Crane Company's long-term activity ratios shows improvements in asset turnover efficiency over the years, highlighting the company's ability to generate more sales revenue for each dollar invested in both fixed assets and total assets. The fluctuations in the Total Asset Turnover ratio between 2023 and 2024 may warrant further investigation into the company's asset management strategies.