Danaher Corporation (DHR)

Short-term

Turnover ratios

Activity ratios provide insights into how efficiently a company manages its assets and generates revenues. Let's analyze the activity ratios of Danaher Corporation based on the provided data:

1. Inventory Turnover:
- The inventory turnover ratio for Danaher Corporation has been relatively stable over the years, ranging from 4.03 to 4.71.
- This indicates that the company is able to sell and replace its inventory efficiently. A higher ratio suggests better inventory management.

2. Receivables Turnover:
- The data shows that receivables turnover information is not available for the given years, indicated by "—".
- Receivables turnover ratio measures how quickly a company collects its outstanding receivables. The absence of this data limits the analysis of Danaher's efficiency in collecting receivables.

3. Payables Turnover:
- Similar to receivables, payables turnover data is also not provided for the specified years, denoted by "—".
- Payables turnover ratio reflects how efficiently a company pays its suppliers. The lack of this information hinders the assessment of Danaher's payables management.

4. Working Capital Turnover:
- The working capital turnover ratio indicates how effectively a company utilizes its working capital to generate revenue.
- Danaher's working capital turnover has shown significant fluctuations, with values ranging from 3.48 to 8.85.
- A higher ratio implies that the company efficiently uses its working capital to generate sales, reflecting good operational efficiency.

In conclusion, based on the available data, Danaher Corporation demonstrates effective management of inventory and working capital turnover. However, the absence of information on receivables and payables turnover limits a comprehensive assessment of the company's overall efficiency in managing its assets and liabilities.

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Average number of days

Danaher Corporation's Days of Inventory on Hand (DOH) has shown a fluctuating trend over the years, increasing from 85.29 days in 2020 to 90.65 days in 2022 and then decreasing to 77.51 days in 2023 before rising again to 87.96 days in 2024. This indicates that the company has been managing its inventory levels differently each year.

The Days of Sales Outstanding (DSO), which measures the average number of days it takes for the company to collect revenue after a sale, is not available for analysis as the data is not provided for any of the years.

The Number of Days of Payables, representing the average number of days the company takes to pay its suppliers, is also not available for analysis as the data is not provided for any of the years.

In conclusion, while Danaher's inventory management efficiency has shown variation over the years, additional information is needed to fully assess the effectiveness of its accounts receivable and accounts payable processes.

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See also:

Danaher Corporation Short-term (Operating) Activity Ratios

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Long-term

Danaher Corporation's long-term activity ratios, namely the Fixed Asset Turnover and Total Asset Turnover, provide insights into how efficiently the company is utilizing its assets over the long term.

1. Fixed Asset Turnover:
- The Fixed Asset Turnover ratio measures the company's ability to generate sales revenue from its investment in fixed assets.
- From the data provided, we observe an increasing trend in the Fixed Asset Turnover ratio from 6.83 in December 31, 2020 to 7.96 in December 31, 2022.
- This indicates that Danaher Corporation has been able to generate more revenue from its fixed assets over time, implying improved efficiency in asset utilization.
- However, the absence of data for December 31, 2023 and 2024 makes it challenging to ascertain the continued trend and evaluate the company's performance in those years.
- Overall, the increasing trend in Fixed Asset Turnover suggests that Danaher is effectively managing and utilizing its fixed assets to drive revenue growth.

2. Total Asset Turnover:
- The Total Asset Turnover ratio reflects the company's overall efficiency in generating sales from all its assets, including both fixed and current assets.
- The data reveals a fluctuating trend in the Total Asset Turnover ratio over the years, with values of 0.29 in December 31, 2020, increasing to 0.37 in December 31, 2022, but subsequently dropping to 0.28 in December 31, 2023, and then increasing to 0.31 in December 31, 2024.
- The fluctuations in the Total Asset Turnover ratio may be indicative of changes in the company's asset structure, sales volume, or operational efficiency during these periods.
- A higher Total Asset Turnover ratio signifies better asset utilization and efficiency in generating sales revenue relative to the size of the asset base.
- While the fluctuating trend might warrant further investigation into the factors driving these changes, the general increase from 2020 to 2022 followed by a slight decrease and increase in 2023 and 2024, respectively, suggests that Danaher has been fairly effective in utilizing its total assets to generate sales revenue.

In conclusion, both the Fixed Asset Turnover and Total Asset Turnover ratios indicate that Danaher Corporation has shown efficiency in utilizing its assets to generate revenue, with the latter reflecting the company's overall performance in asset turnover. The trends observed highlight the company's ability to efficiently leverage its asset base for sales growth, although the fluctuations in the Total Asset Turnover ratio may necessitate a closer examination of the underlying factors influencing the company's long-term activity ratios.

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See also:

Danaher Corporation Long-term (Investment) Activity Ratios