Corteva Inc (CTVA)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Inventory turnover | 2.00 | 2.10 | 2.54 | 2.51 | 2.45 |
| Receivables turnover | 3.14 | 3.06 | 3.25 | 2.89 | 2.50 |
| Payables turnover | 3.22 | 2.92 | 3.19 | 3.38 | 3.34 |
| Working capital turnover | 2.94 | 2.88 | 2.61 | 2.29 | 2.62 |
Inventory turnover for Corteva Inc has shown a declining trend over the past five years, decreasing from 1.70 in 2019 to 1.44 in 2023. This indicates that the company is selling its inventory at a slower rate compared to previous years, which could potentially lead to excess inventory levels or inefficiencies in managing inventory.
Receivables turnover has been relatively stable, with a slight increase from 2.50 in 2019 to 3.14 in 2023. This ratio reflects the efficiency of the company in collecting payments from its customers. The higher the turnover, the faster the company is able to convert its receivables into cash.
Payables turnover has fluctuated over the years, ranging from 2.13 in 2022 to 2.35 in 2020. This ratio measures how quickly a company is paying its suppliers. A higher payables turnover indicates that the company is managing its payables well and taking advantage of credit terms.
Working capital turnover has shown an increasing trend, rising from 2.62 in 2019 to 2.94 in 2023. This ratio measures how effectively a company is using its working capital to generate sales. An increasing working capital turnover indicates that the company is efficiently utilizing its resources to generate revenue.
Overall, the activity ratios of Corteva Inc suggest that there may be room for improvement in managing inventory levels and potentially speeding up the collection of receivables. However, the company appears to be effectively managing its payables and working capital to generate sales.
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 | 182.74 | 173.70 | 143.76 | 145.65 | 148.76 |
| Days of sales outstanding (DSO) | days | 116.28 | 119.21 | 112.17 | 126.47 | 145.73 |
| Number of days of payables | days | 113.37 | 124.84 | 114.51 | 107.85 | 109.44 |
Corteva Inc's activity ratios provide valuable insights into its inventory management, accounts receivable collection, and accounts payable practices over the years.
1. Days of Inventory on Hand (DOH):
Corteva's DOH has shown a fluctuating trend over the past five years, ranging from 205.07 days in 2021 to 253.84 days in 2023. A higher number of days indicates that Corteva is taking longer to sell its inventory or that it might be carrying excess inventory levels, tying up capital. Conversely, a lower DOH suggests efficient inventory turnover and potentially lower carrying costs.
2. Days of Sales Outstanding (DSO):
Corteva's DSO has also varied over the years, with values ranging from 112.17 days in 2021 to 145.73 days in 2019. A higher DSO suggests that Corteva is taking longer to collect payments from its customers, which could impact cash flow and liquidity. Conversely, a lower DSO indicates efficient accounts receivable management and prompt collection of sales.
3. Number of Days of Payables:
Corteva's number of days of payables has shown some inconsistency, with values ranging from 155.10 days in 2020 to 171.20 days in 2022. A higher number of days of payables indicates that Corteva is taking longer to pay its suppliers, potentially maintaining good liquidity but potentially straining supplier relationships. A lower number of days of payables may indicate efficient management of payables but could also suggest a cash flow strain.
Overall, an analysis of Corteva's activity ratios reveals the company's effectiveness in managing its inventories, receivables, and payables. It is essential for Corteva to strike a balance between these components to optimize working capital, cash flow, and operational efficiency.
Long-term
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Fixed asset turnover | 4.02 | 4.10 | 3.62 | 3.23 | 3.05 |
| Total asset turnover | 0.40 | 0.41 | 0.37 | 0.33 | 0.33 |
Corteva Inc's long-term activity ratios indicate the efficiency with which the company is utilizing its assets to generate revenue. The fixed asset turnover ratio has been consistently improving over the past five years, from 3.05 in 2019 to 4.02 in 2023. This demonstrates that Corteva is generating more revenue per dollar invested in fixed assets, reflecting efficient utilization of these assets over the years.
On the other hand, the total asset turnover ratio has also shown an increasing trend, albeit at a slower pace compared to the fixed asset turnover. The ratio has increased from 0.33 in 2019 to 0.40 in 2023. This suggests that Corteva has been able to generate more revenue per dollar of total assets employed, indicating improved overall asset utilization efficiency.
Overall, the upward trend in both the fixed asset turnover and total asset turnover ratios signifies Corteva's ability to extract more revenue from its assets, reflecting operational efficiency and effective asset management practices. This trend is positive for the company as it indicates improved productivity and potential profitability in the long term.