Ecolab Inc (ECL)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Inventory turnover | 6.08 | 6.10 | 4.93 | 5.11 | 5.37 |
| Receivables turnover | — | — | — | — | — |
| Payables turnover | — | — | — | — | — |
| Working capital turnover | 12.77 | 11.80 | 11.05 | 11.23 | 5.40 |
Inventory Turnover:
- The inventory turnover ratio measures how efficiently a company manages its inventory. Ecolab Inc's inventory turnover has been fluctuating over the years, reducing slightly from 5.37 in 2020 to 4.93 in 2022 before improving to 6.08 in 2024. This indicates that the company is selling its inventory faster in recent years.
Receivables Turnover:
- Ecolab Inc did not provide data for receivables turnover for the years provided. Typically, a higher receivables turnover ratio indicates that a company is collecting its accounts receivables more efficiently.
Payables Turnover:
- Ecolab Inc did not provide data for payables turnover for the years provided. The payables turnover ratio measures how quickly a company pays its suppliers. A higher ratio indicates that the company is paying its suppliers more quickly.
Working Capital Turnover:
- The working capital turnover ratio shows how efficiently a company is using its working capital to generate sales. Ecolab Inc's working capital turnover has been increasing steadily over the years, from 5.40 in 2020 to 12.77 in 2024. This implies that the company is generating more sales for each unit of working capital deployed, indicating improved efficiency in its operations.
In summary, Ecolab Inc has shown improvements in its inventory turnover and working capital turnover ratios, indicating better efficiency in managing inventory and utilizing working capital to generate sales. However, the absence of data for receivables and payables turnover ratios limits a comprehensive analysis of the company's overall activity ratios.
Average number of days
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 60.08 | 59.84 | 74.10 | 71.50 | 67.93 |
| Days of sales outstanding (DSO) | days | — | — | — | — | — |
| Number of days of payables | days | — | — | — | — | — |
Based on the provided data for Ecolab Inc, let's analyze the activity ratios:
1. Days of Inventory on Hand (DOH):
- The days of inventory on hand represent how many days it takes for the company to sell its inventory.
- The trend shows an increase in DOH from 67.93 days in December 2020 to 60.08 days in December 2024.
- A decreasing trend in DOH indicates efficient inventory management, as the company is selling inventory faster.
2. Days of Sales Outstanding (DSO):
- The data does not provide information on the days of sales outstanding, which is usually a measure of how long it takes for a company to collect its account receivables.
- Without DSO data, we are unable to evaluate the efficiency of the company's accounts receivable management.
3. Number of Days of Payables:
- Similarly, the data does not provide information on the number of days of payables. This ratio typically indicates how long a company takes to pay its suppliers.
- Without payables data, we cannot assess the company's payment practices and liquidity management related to its trade payables.
In conclusion, based on the available data, we can analyze Ecolab Inc's inventory management efficiency through the days of inventory on hand ratio, indicating a positive trend of decreasing DOH over the years. However, without information on DSO and payables, a comprehensive assessment of the company's overall activity ratios is limited.
See also:
Long-term
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Fixed asset turnover | — | — | 3.79 | 3.46 | 3.77 |
| Total asset turnover | 0.70 | 0.70 | 0.66 | 0.60 | 0.65 |
Ecolab Inc's fixed asset turnover ratio measures how efficiently the company is utilizing its fixed assets to generate revenue. The trend over the past few years shows a slight decline from 3.77 in 2020 to 3.46 in 2021, followed by an increase to 3.79 in 2022. However, there is missing data for 2023 and 2024. This indicates that in general, Ecolab Inc has been able to generate $3.46 to $3.79 in revenue for every $1 invested in fixed assets.
Total asset turnover ratio reflects the company's ability to generate sales from its total assets. Ecolab Inc's total asset turnover ratio has shown a fluctuating trend, decreasing from 0.65 in 2020 to 0.60 in 2021, then increasing to 0.66 in 2022 and further to 0.70 in both 2023 and 2024. This suggests that the company is becoming more efficient in utilizing its total assets to generate revenue over the years, reaching a level where it generates $0.70 in sales for every $1 of total assets invested.
Overall, the fixed asset turnover ratio indicates Ecolab Inc's efficiency in utilizing its fixed assets, while the total asset turnover ratio shows the company's effectiveness in generating sales from its total asset base.