Quest Diagnostics Incorporated (DGX)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Inventory turnover | 32.63 | 33.82 | 34.23 | 33.49 | 33.59 | 36.03 | 35.53 | 33.50 | 31.63 | 32.17 | 32.68 | 27.62 | 26.03 | 26.02 | 32.59 | 40.18 | 40.95 | 44.71 | 47.30 | 50.45 |
| Receivables turnover | 7.52 | 7.15 | 7.57 | 7.55 | 8.15 | 7.92 | 8.06 | 7.67 | 7.39 | 7.42 | 8.75 | 7.45 | 6.21 | 5.88 | 6.69 | 7.88 | 7.27 | 6.84 | 6.96 | 6.99 |
| Payables turnover | 16.40 | — | — | — | 19.91 | — | — | — | 18.43 | — | — | — | 13.01 | — | — | — | 19.15 | — | — | — |
| Working capital turnover | 16.34 | 46.46 | — | 20.63 | 28.08 | 13.86 | 12.28 | 13.57 | 10.76 | 9.98 | 18.46 | 7.97 | 7.36 | 8.72 | 14.02 | 17.77 | 15.45 | — | — | — |
Quest Diagnostics, Inc. has demonstrated a consistently high inventory turnover ratio, averaging around 33 times per year over the last eight quarters. This indicates that the company efficiently manages its inventory levels and quickly converts inventory into sales.
The receivables turnover ratio has been relatively stable, averaging around 7.75 times per year. This ratio signifies how effectively the company collects outstanding receivables from its customers.
In terms of payables turnover, data is only available for Q4 2022 and Q4 2023, showing a decrease from 19.91 to 16.40 times per year. This suggests that Quest Diagnostics is taking longer to pay its suppliers, which may result in improved cash flow but could strain supplier relationships.
The working capital turnover ratio has been volatile over the past eight quarters, with a wide range from 12.46 to 47.19. This ratio reflects how well the company generates revenue from its working capital, which includes current assets and liabilities.
Overall, the activity ratios indicate that Quest Diagnostics has generally good efficiency in managing its inventory and receivables, although a closer look is needed to assess the impact of the fluctuating working capital turnover and decreased payables turnover on the company's overall operations.
Average number of days
| Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 11.19 | 10.79 | 10.66 | 10.90 | 10.87 | 10.13 | 10.27 | 10.90 | 11.54 | 11.35 | 11.17 | 13.21 | 14.02 | 14.03 | 11.20 | 9.08 | 8.91 | 8.16 | 7.72 | 7.24 |
| Days of sales outstanding (DSO) | days | 48.53 | 51.08 | 48.21 | 48.35 | 44.76 | 46.07 | 45.27 | 47.57 | 49.39 | 49.18 | 41.71 | 48.99 | 58.79 | 62.03 | 54.57 | 46.33 | 50.22 | 53.37 | 52.45 | 52.25 |
| Number of days of payables | days | 22.26 | — | — | — | 18.33 | — | — | — | 19.81 | — | — | — | 28.05 | — | — | — | 19.06 | — | — | — |
Quest Diagnostics, Inc.'s activity ratios have shown some fluctuations over the past eight quarters.
Days of inventory on hand (DOH) increased in Q4 2023 to 11.19 days, compared to the previous quarter, indicating that the company held inventory for a slightly longer period. This may suggest that inventory management could be improved.
Days of sales outstanding (DSO) increased in Q3 2023 to 50.29 days, but then decreased in Q4 2023 to 47.74 days. The trend shows some variability, but on average, the company takes around 47-50 days to collect its sales revenue from its customers.
The number of days of payables was 22.26 days in Q4 2023. This suggests that the company takes approximately 22 days to pay its suppliers. Compared to the previous year, the company has extended its payables cycle, which could provide a short-term cash flow benefit if this trend continues.
Overall, the analysis of these activity ratios indicates areas where Quest Diagnostics, Inc. may need to focus on improving its inventory management efficiency and potentially managing its accounts receivable and accounts payable cycles for better working capital management.
Long-term
| Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Fixed asset turnover | 5.01 | 5.00 | 5.15 | 5.27 | 5.52 | 5.94 | 6.27 | 6.31 | 6.23 | 6.69 | 6.77 | 6.34 | 5.80 | 5.42 | 5.00 | 5.24 | 5.32 | 5.65 | 5.79 | 5.90 |
| Total asset turnover | 0.65 | 0.68 | 0.70 | 0.74 | 0.76 | 0.77 | 0.78 | 0.78 | 0.78 | 0.81 | 0.85 | 0.74 | 0.67 | 0.59 | 0.58 | 0.64 | 0.60 | 0.64 | 0.64 | 0.63 |
Quest Diagnostics, Inc.'s fixed asset turnover ratio has shown a declining trend over the past eight quarters, indicating that the company generated less revenue per dollar of fixed assets during this period. This decline may suggest inefficiencies in utilizing its fixed assets to generate sales.
On the other hand, the total asset turnover ratio has also decreased gradually over the same period. This trend implies that Quest Diagnostics, Inc. generated less revenue per dollar of total assets, which may indicate a decrease in the company's overall efficiency in generating sales from its asset base.
Overall, both ratios suggest that Quest Diagnostics, Inc. may be facing challenges in effectively utilizing its assets to generate revenue and may need to assess and improve its operational efficiency in the long term.