Dupont De Nemours Inc (DD)

Activity ratios

Short-term

Turnover ratios

	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Inventory turnover	5.04	4.56	6.45	7.83	4.19
Receivables turnover	5.10	5.23	7.78	8.43	5.66
Payables turnover	6.46	5.05	6.40	8.43	6.16
Working capital turnover	2.74	1.75	1.79	1.22	13.01

DuPont de Nemours Inc's activity ratios can provide insight into how efficiently the company is managing its assets and liabilities. Here is a comprehensive analysis based on the data provided:

1. Inventory turnover:
- The inventory turnover ratio measures how many times a company's inventory is sold and replaced over a period. DuPont de Nemours Inc's inventory turnover has been relatively stable over the past five years, ranging from 3.25 to 3.77 times.
- A higher inventory turnover indicates efficient inventory management and a quicker conversion of inventory into sales. DuPont's ratio values suggest that the company is effectively managing its inventory to support sales activities.

2. Receivables turnover:
- The receivables turnover ratio indicates how many times a company collects accounts receivable during a period. DuPont de Nemours Inc's receivables turnover has shown a slight fluctuation over the years, ranging from 5.09 to 6.14 times.
- A higher receivables turnover implies that the company is collecting outstanding receivables more quickly, which is a positive indicator of effective credit management and liquidity.

3. Payables turnover:
- The payables turnover ratio measures the efficiency of a company's accounts payable management. DuPont de Nemours Inc's payables turnover has varied between 4.00 and 4.79 times over the past five years.
- A higher payables turnover indicates that the company is paying its suppliers more rapidly, potentially taking advantage of early payment discounts and efficiently managing its working capital.

4. Working capital turnover:
- The working capital turnover ratio assesses how effectively a company is using its working capital to generate revenue. DuPont de Nemours Inc's working capital turnover has shown significant fluctuations, ranging from 1.73 to 13.01 times.
- A higher working capital turnover suggests that the company is generating more revenue per unit of working capital employed, indicating efficient utilization of resources to drive sales.

In summary, DuPont de Nemours Inc's activity ratios generally indicate efficient management of inventory, receivables, payables, and working capital over the past five years. The company's ability to maintain stable or improving ratios reflects solid operational efficiency and financial management practices.

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	72.40	80.10	56.57	46.64	87.16
Days of sales outstanding (DSO)	days	71.60	69.78	46.93	43.32	64.51
Number of days of payables	days	56.48	72.33	57.00	43.31	59.21

Based on the activity ratios for DuPont de Nemours Inc over the past five years, we can observe certain trends and patterns:

1. Days of Inventory on Hand (DOH):
- The company has shown a fluctuating trend in its days of inventory on hand, ranging from a high of 112.15 days in 2019 to a low of 96.70 days in 2021. In 2023, the DOH increased slightly to 100.02 days.
- Generally, a lower number of days of inventory on hand is preferable as it indicates faster inventory turnover and better management of inventory levels.
- The slight increase in 2023 compared to 2021 suggests that the company may be holding onto inventory for a slightly longer period, which could tie up capital and potentially impact liquidity.

2. Days of Sales Outstanding (DSO):
- DuPont de Nemours Inc has demonstrated a consistent downward trend in its days of sales outstanding over the past five years, from 64.51 days in 2019 to 71.68 days in 2023.
- A decrease in DSO indicates that the company is collecting its accounts receivable more efficiently, converting sales into cash quicker.
- This improvement in DSO suggests effective credit management practices and a potentially stronger cash flow position.

3. Number of Days of Payables:
- The number of days of payables for DuPont de Nemours Inc has fluctuated over the five-year period, ranging from 76.19 days in 2019 to 91.36 days in 2022.
- In 2023, the number of days of payables decreased to 78.03 days, indicating that the company is taking less time to pay its suppliers.
- While extending payables can improve cash flow in the short term, excessively delaying payments may strain supplier relationships and affect future credit terms.

Overall, DuPont de Nemours Inc's activity ratios reflect a mixed performance in inventory management, improvement in accounts receivable collection, and varying practices in managing payables. It is essential for the company to continue monitoring and optimizing these activity ratios to enhance operational efficiency and maintain a healthy working capital position.

Long-term

	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Fixed asset turnover	2.05	1.29	2.92	2.97	2.12
Total asset turnover	0.31	0.32	0.37	0.29	0.31

DuPont de Nemours Inc's long-term activity ratios, specifically the fixed asset turnover and total asset turnover, provide insights into the company's efficiency in utilizing its assets to generate sales.

Fixed asset turnover measures the company's ability to generate sales revenue from its investment in fixed assets. DuPont's fixed asset turnover has fluctuated over the past five years, ranging from 2.04 to 2.39. The decline in 2020 followed by an increase in 2021 and 2022 suggests some variability in how efficiently the company is using its fixed assets to generate revenue. In general, a higher fixed asset turnover indicates better efficiency in asset utilization.

Total asset turnover, on the other hand, assesses how well the company generates sales revenue from all its assets. DuPont's total asset turnover has remained relatively low, ranging from 0.29 to 0.36 over the five-year period. This indicates that the company is not generating a high level of sales relative to its total asset base. A low total asset turnover could suggest either an inefficient use of assets or a high level of asset base relative to sales.

In conclusion, while DuPont de Nemours Inc has shown decent efficiency in generating sales from its fixed assets, there is room for improvement in terms of generating sales from its total asset base. Further analysis and comparison with industry peers may provide additional insights into the company's asset utilization and efficiency.