Crane NXT Co (CXT)

Short-term

Turnover ratios

Activity ratios provide insights into how efficiently a company manages its assets and liabilities to generate sales and cash flow. Let's analyze the activity ratios of Crane NXT Co based on the data provided.

1. Inventory turnover:
- The inventory turnover has fluctuated over the years, ranging from 4.14 in 2019 to 19.81 in 2022.
- A higher inventory turnover indicates that Crane NXT Co is effectively managing its inventory by quickly selling its goods and replenishing stock at a faster rate.
- In 2023, the inventory turnover decreased to 7.26, suggesting that the company is taking longer to sell its inventory compared to the previous year.

2. Receivables turnover:
- The receivables turnover has been relatively stable, with values between 5.54 and 7.21.
- This ratio indicates how efficiently the company collects credit sales from customers. A higher ratio implies a shorter collection period.
- The company's ability to collect receivables improved in 2022 with a turnover of 7.11, followed by a slight increase to 6.47 in 2023.

3. Payables turnover:
- The payables turnover ratio has shown variability, with values ranging from 6.09 to 26.32.
- A higher payables turnover ratio suggests that Crane NXT Co is taking longer to pay its suppliers, potentially benefiting from extended payment terms.
- The significant increase in payables turnover in 2022 to 26.32 indicates that the company was paying its suppliers at a much faster rate compared to other years.

4. Working capital turnover:
- The working capital turnover ratio reveals how effectively the company utilizes its working capital to generate revenue.
- In 2020 and 2021, the working capital turnover ratios were higher at 5.68 and 4.52, indicating efficient utilization of working capital.
- The working capital turnover decreased to 4.49 in 2023, suggesting that the company may be less efficient in generating sales relative to its working capital in that year.

Overall, the analysis of activity ratios for Crane NXT Co reflects fluctuations in inventory management, receivables collection, payables payment terms, and working capital utilization over the five-year period, indicating changes in the company's operational efficiency and effectiveness in managing its resources.

---

Average number of days

Activity ratios provide insights into how efficiently a company manages its operating assets and liabilities. Let's analyze the activity ratios of Crane NXT Co:

1. Days of Inventory on Hand (DOH):
- The trend in DOH has been fluctuating over the past five years, indicating inconsistent inventory management.
- In 2023, the company held inventory for an average of 50.28 days, a significant increase from 18.42 days in 2022.
- The increase in DOH may suggest overstocking or slow-moving inventory, impacting cash flow and potentially leading to obsolescence.

2. Days of Sales Outstanding (DSO):
- Crane NXT Co's DSO has shown some variation but has generally remained stable over the years.
- In 2023, the company took an average of 56.38 days to collect its receivables, compared to 51.34 days in 2022.
- A higher DSO could indicate a lenient credit policy, potential collection issues, or difficulty in managing accounts receivable efficiently.

3. Number of Days of Payables:
- The days of payables for Crane NXT Co have also varied year over year, with no clear trend.
- In 2023, the company took an average of 34.09 days to pay its suppliers, an increase from 13.87 days in 2022.
- A longer payment period may indicate extended credit terms negotiated with suppliers, but it could also point to strained supplier relationships or potential liquidity constraints.

Overall, Crane NXT Co should closely monitor these activity ratios to ensure optimal management of its working capital, balance inventory levels, streamline receivables collection processes, and maintain healthy supplier relationships for sustained financial health and efficiency.

---

Long-term

Crane NXT Co's long-term activity ratios provide insights into the efficiency of the company's utilization of its assets over the years. The fixed asset turnover ratio indicates how well the company generates sales revenue from its investment in fixed assets.

Analyzing the trend of the fixed asset turnover ratio, we observe fluctuations over the five-year period. The ratio increased significantly from 2019 to 2022, indicating an improvement in the efficient utilization of fixed assets to generate sales. However, there was a notable decline in 2023 compared to the previous year, suggesting a potential decrease in the effectiveness of utilizing fixed assets to generate revenue.

On the other hand, the total asset turnover ratio reflects the company's ability to generate sales in relation to its total assets. Crane NXT Co's total asset turnover ratio also displays variability over the years. The ratios from 2020 to 2022 show an increasing trend, signaling improved efficiency in generating sales relative to total assets. However, in 2023, there was a substantial decrease in the ratio compared to 2022, indicating a potential decline in the overall efficiency of asset utilization to generate revenue.

Overall, while the company exhibited fluctuations in both fixed asset turnover and total asset turnover ratios, it is essential for Crane NXT Co to consistently monitor and enhance its asset utilization efficiency to sustain long-term growth and profitability.