Donaldson Company Inc (DCI)
Activity ratios
Short-term
Turnover ratios
| Jul 31, 2025 | Jul 31, 2024 | Jul 31, 2023 | Jul 31, 2022 | Jul 31, 2021 | |
|---|---|---|---|---|---|
| Inventory turnover | 4.68 | 4.85 | 5.43 | 4.46 | 4.90 |
| Receivables turnover | 5.57 | 5.70 | 5.72 | 5.36 | 5.16 |
| Payables turnover | 6.52 | 6.09 | 7.45 | 6.62 | 6.40 |
| Working capital turnover | 5.24 | 5.47 | 6.48 | 4.26 | 4.48 |
The activity ratios of Donaldson Company Inc., as reflected in the provided data, exhibit varying trends over the period from July 31, 2021, to July 31, 2025.
Inventory Turnover:
The inventory turnover ratio experienced some fluctuations, with a notable decrease from 4.90 in 2021 to 4.46 in 2022, indicating slightly slower inventory movement during that period. Subsequently, there was an improvement, with the ratio increasing to 5.43 in 2023, suggesting enhanced inventory management or increased sales efficiency. However, the ratio declined again to 4.85 in 2024 and further to 4.68 in 2025, indicating a modest slowdown in inventory turnover in the latter years.
Receivables Turnover:
The receivables turnover ratio showed a consistent upward trend, rising from 5.16 in 2021 to 5.72 in 2023. This indicates increasing efficiency in collecting accounts receivable over this period. The ratio remained relatively stable afterward, with slight decreases to 5.70 in 2024 and 5.57 in 2025, suggesting maintained, albeit slightly reduced, receivables collection efficiency.
Payables Turnover:
The payables turnover ratio increased from 6.40 in 2021 to a peak of 7.45 in 2023, reflecting a pattern of quicker payments to suppliers or a reduction in the payables period. After reaching this peak, the ratio decreased to 6.09 in 2024, indicating a slowing down in payment frequency, but then slightly increased again to 6.52 in 2025, suggesting a modest recovery in paying practices.
Working Capital Turnover:
The working capital turnover ratio displayed some volatility, decreasing from 4.48 in 2021 to 4.26 in 2022, implying a reduction in the efficiency of working capital utilization. The ratio then surged significantly to 6.48 in 2023, indicating improved capacity to generate sales from the working capital employed. Subsequently, the ratio declined to 5.47 in 2024 and further to 5.24 in 2025, reflecting a reduction in efficiency but still above the 2021 and 2022 levels.
Summary:
Overall, Donaldson Company Inc.'s activity ratios suggest periods of improved operational efficiency, particularly notable in receivables collection and working capital utilization in 2023. The inventory turnover experienced some decline after initial improvements, pointing towards potential challenges in inventory management or sales growth sustaining. The payables turnover shows a trend of quicker payments peaking in 2023 before settling to more moderate levels. These ratios indicate a dynamic operational environment with periods of enhanced efficiency interspersed with slight regressions, typical of a company adapting to changing market conditions.
Average number of days
| Jul 31, 2025 | Jul 31, 2024 | Jul 31, 2023 | Jul 31, 2022 | Jul 31, 2021 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 77.96 | 75.26 | 67.22 | 81.89 | 74.56 |
| Days of sales outstanding (DSO) | days | 65.49 | 64.09 | 63.80 | 68.06 | 70.69 |
| Number of days of payables | days | 55.95 | 59.90 | 49.02 | 55.18 | 56.99 |
The analysis of Donaldson Company Inc.'s activity ratios over the period from July 31, 2021, to July 31, 2025, reveals notable trends and shifts in operational efficiency.
Days of Inventory on Hand (DOH):
The DOH metric indicates the average number of days inventory is held before it is sold. In 2021, the DOH was approximately 74.56 days, which increased to 81.89 days in 2022, suggesting a buildup in inventory levels or slower turnover. Subsequently, the DOH decreased significantly to 67.22 days in 2023, indicating improved inventory management or faster sales. However, the figure slightly increased again to 75.26 days in 2024 and further to 77.96 days in 2025, reflecting a potential rebounding or stabilization of inventory levels, possibly due to market conditions or changes in inventory strategy.
Days of Sales Outstanding (DSO):
The DSO measures the average number of days to collect receivables from customers. It decreased from approximately 70.69 days in 2021 to 63.80 days in 2023, signifying an improvement in receivables collection efficiency. The DSO remained relatively stable, increasing slightly to 64.09 days in 2024 and 65.49 days in 2025, indicating a modest elongation in collection periods but still maintaining a generally efficient receivables process relative to the earlier period.
Number of Days of Payables:
This ratio reflects the average period the company takes to pay its suppliers. The payable days decreased from 56.99 days in 2021 to 49.02 days in 2023, suggesting a strategy to pay suppliers more quickly or improved cash management. In 2024, the payable period increased to 59.90 days, then decreased slightly to 55.95 days in 2025. The fluctuation indicates adjustments in payment policies, potentially balancing cash flow management and supplier relationship considerations.
Overall Observation:
Across these activity ratios, there is evidence of operational adjustments aimed at optimizing working capital. The reduction in DOH and DSO during 2022 and 2023 hints at efforts to improve inventory turnover and receivables collections. Subsequently, the slight increases in these ratios in 2024 and 2025 may reflect shifts in inventory and receivables management strategies or external market factors. The variation in days payable suggests a dynamic approach to managing the timing of payments to suppliers, balancing liquidity and supplier relations.
These trends collectively demonstrate an active management of operational efficiency, with periods of improvement followed by strategic adjustments, aligning with broader economic conditions and internal corporate policies.
Long-term
| Jul 31, 2025 | Jul 31, 2024 | Jul 31, 2023 | Jul 31, 2022 | Jul 31, 2021 | |
|---|---|---|---|---|---|
| Fixed asset turnover | — | 5.09 | 5.25 | 5.56 | 4.62 |
| Total asset turnover | 1.24 | 1.23 | 1.24 | 1.27 | 1.19 |
The analysis of Donaldson Company Inc.'s long-term activity ratios reveals insights into the company's utilization of its assets over the analyzed period.
Starting with the Fixed Asset Turnover ratio, which measures how effectively the company generates sales from its fixed assets, the data indicates an initial increase from 4.62 as of July 31, 2021, to 5.56 by July 31, 2022. This suggests an improvement in the efficiency of utilizing fixed assets during that period. However, the ratio declines slightly to 5.25 in July 2023 and further to 5.09 in July 2024, indicating a marginal decrease in fixed asset productivity. The absence of data beyond July 2024 prevents assessment of subsequent trends, but the slight decline from its peak suggests a possible stabilization or minor decline in fixed asset utilization.
In contrast, the Total Asset Turnover ratio, reflecting overall asset efficiency, shows relatively stable performance across the same period. It increased modestly from 1.19 in July 2021 to 1.27 in July 2022, then experienced a slight decline to 1.24 in 2023, with minimal fluctuations in subsequent years, reaching 1.23 in July 2024 and slightly rising again to 1.24 in July 2025. This stability indicates that the company's overall asset efficiency has remained relatively consistent, with no significant fluctuations over time.
Collectively, these ratios suggest that while the company's fixed asset efficiency experienced some improvements followed by a minor downturn, its overall asset utilization remained stable. The modest variations hint at stable operational performance and asset management strategies, with no evident signs of significant changes either in asset investment or in sales-generation efficiency during the analyzed period.