Ecolab Inc (ECL)

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	8.98	8.66	7.97	7.48	7.10	6.91	7.04	7.32	7.51	7.90	7.48	7.67	8.49	8.95	9.88	8.47	11.98	8.15	7.94	7.83
Receivables turnover	5.11	5.03	4.98	5.10	4.98	4.88	4.84	4.98	4.89	4.94	4.88	4.75	5.06	5.23	5.85	4.97	5.07	5.14	5.06	5.17
Payables turnover	8.58	8.88	8.88	8.79	7.36	7.86	7.95	8.17	8.10	8.80	8.74	9.16	9.40	10.40	11.17	10.13	12.05	10.18	9.95	10.41
Working capital turnover	11.90	12.77	15.38	18.70	11.18	10.59	12.44	13.62	11.34	6.00	4.67	5.07	5.65	6.96	7.18	6.85	12.39	15.55	20.26	24.59

Ecolab, Inc.'s activity ratios provide insights into how effectively the company manages its assets and liabilities to generate sales.

1. Inventory turnover: This ratio measures how efficiently Ecolab is managing its inventory levels. The increasing trend in inventory turnover from Q1 2023 to Q4 2023 indicates that the company is selling its inventory more quickly. A high turnover ratio suggests that Ecolab is effectively managing its inventory levels to meet customer demand.

2. Receivables turnover: Ecolab's receivables turnover ratio indicates how quickly the company is collecting payments from its customers. The consistent range of values from Q1 2022 to Q4 2023 suggests that the collection process is stable. A higher ratio signifies that Ecolab is efficient in collecting payments owed by customers.

3. Payables turnover: This ratio reflects how efficiently Ecolab is paying its suppliers for goods and services. The increasing trend in payables turnover from Q1 2022 to Q4 2023 indicates that the company is taking longer to pay its suppliers. A higher turnover ratio may signify favorable credit terms from suppliers, but it could also mean a potential strain on supplier relationships.

4. Working capital turnover: The working capital turnover ratio measures how efficiently Ecolab utilizes its working capital to generate sales. The increasing trend from Q1 2022 to Q4 2023 suggests that the company is using its working capital more effectively to support its operations. A higher turnover ratio indicates that Ecolab is generating more sales with a lower investment in working capital.

Overall, the activity ratios of Ecolab, Inc. reflect a mix of efficient inventory management, stable accounts receivable collection, evolving payment practices with suppliers, and improving efficiency in leveraging working capital to drive sales.

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	40.64	42.14	45.80	48.77	51.43	52.82	51.84	49.88	48.59	46.21	48.80	47.57	42.98	40.78	36.93	43.08	30.46	44.81	45.95	46.63
Days of sales outstanding (DSO)	days	71.37	72.56	73.34	71.60	73.29	74.84	75.46	73.33	74.66	73.90	74.83	76.81	72.15	69.74	62.43	73.49	72.05	71.05	72.10	70.64
Number of days of payables	days	42.52	41.12	41.08	41.50	49.58	46.42	45.94	44.67	45.08	41.48	41.74	39.84	38.81	35.10	32.69	36.03	30.28	35.85	36.70	35.07

The activity ratios of Ecolab, Inc. reflect the efficiency of the company in managing its inventory, accounts receivable, and accounts payable.

1. Days of Inventory on Hand (DOH):
- The trend of DOH indicates that Ecolab has been able to reduce the number of days it holds inventory over the quarters, from 74.10 days in Q4 2022 to 59.69 days in Q4 2023.
- A lower DOH suggests that the company is managing its inventory more efficiently by selling products quickly, reducing storage costs and potential obsolescence.

2. Days of Sales Outstanding (DSO):
- The DSO has seen some fluctuations but has improved slightly from 74.15 days in Q4 2022 to 71.98 days in Q4 2023.
- This shows that Ecolab has been able to collect its accounts receivable more promptly, indicating effective credit management and potentially reducing the risk of bad debts.

3. Number of Days of Payables:
- The number of days of payables has shown a decreasing trend, indicating that the company is taking longer to pay its suppliers from 71.43 days in Q4 2022 to 62.45 days in Q4 2023.
- While a longer payable period can help improve cash flow, it may also strain relationships with suppliers if it leads to delayed payments.

Overall, Ecolab's activity ratios suggest that the company has been successful in managing its working capital components efficiently, with improvements in inventory turnover and accounts receivable collection, but also extending its payable period.

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	4.45	4.56	4.48	4.42	4.36	4.31	4.19	4.03	3.91	4.09	3.96	3.78	3.95	4.17	4.43	3.81	4.60	3.83	3.80	3.77
Total asset turnover	0.71	0.69	0.69	0.69	0.67	0.67	0.65	0.63	0.61	0.70	0.66	0.64	0.68	0.72	0.77	0.67	0.71	0.71	0.71	0.70

Ecolab, Inc. has shown consistency and improvement in its long-term activity ratios in recent quarters. The fixed asset turnover ratio has been steadily increasing from 3.99 in Q1 2022 to 4.41 in Q4 2023. This indicates that the company is generating more revenue relative to its investment in fixed assets, reflecting operational efficiency and effective utilization of its fixed assets.

Moreover, the total asset turnover ratio has also shown a positive trend, increasing from 0.62 in Q1 2022 to 0.70 in Q4 2023. This ratio demonstrates how efficiently Ecolab is using its total assets to generate revenue. The continuous improvement in this ratio suggests that the company is effectively managing its assets and maximizing its revenue generation capabilities over time.

Overall, Ecolab, Inc.'s long-term activity ratios reflect strong operational performance and effective asset utilization, indicating a sound financial health and management strategy.