Eastman Chemical Company (EMN)

Short-term

Turnover ratios

Based on the provided data on activity ratios for Eastman Chemical Company, let's analyze the key ratios:

1. Inventory Turnover:
The inventory turnover ratio measures how efficiently the company manages its inventory. Eastman Chemical Company's inventory turnover has been relatively stable over the quarters, ranging between 3.56 and 5.34. An increasing trend in inventory turnover, as seen from Q1 2024 to Q3 2024, indicates that the company is selling inventory at a faster rate, which is a positive sign.

2. Receivables Turnover:
The receivables turnover ratio reflects how efficiently the company collects its accounts receivable. However, data is unavailable for this ratio, indicating that the company may not report specific figures or that it manages receivables differently.

3. Payables Turnover:
Similar to receivables turnover, data is unavailable for payables turnover, suggesting that Eastman Chemical Company may not disclose this information or have a different approach to managing payables.

4. Working Capital Turnover:
The working capital turnover ratio indicates how effectively the company is utilizing its working capital to generate revenue. Eastman Chemical Company's working capital turnover has shown significant fluctuations over the quarters, with a notable increase from Q3 2021 to Q4 2022. A higher working capital turnover ratio implies that the company is using its resources more efficiently to generate sales.

Overall, Eastman Chemical Company's activity ratios reflect varying levels of efficiency in managing inventory and working capital. The stable inventory turnover and significant fluctuations in working capital turnover highlight the importance of monitoring these ratios to assess the company's operational performance and efficiency.

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Average number of days

Based on the provided data, let's analyze the activity ratios of Eastman Chemical Company:

1. Days of Inventory on Hand (DOH):
- The trend in DOH for Eastman Chemical Company shows some fluctuations over the periods analyzed, ranging from 68.38 days to 102.65 days.
- A decrease in DOH indicates the company is managing its inventory efficiently and selling products quickly. Conversely, an increase may suggest overstocking or slower sales.
- It is important to monitor inventory turnover and sales to ensure optimal inventory levels to meet demand and avoid holding excess inventory.

2. Days of Sales Outstanding (DSO):
- The data provided does not include specific values for Days of Sales Outstanding, which is used to measure how long it takes for the company to collect payments from customers.
- DSO is critical in assessing the company's credit and collection policies, as a lower DSO indicates efficient collections and better liquidity.

3. Number of Days of Payables:
- Similar to DSO, specific data for the Number of Days of Payables is not available in the provided information.
- This ratio, which measures how long it takes the company to pay its suppliers, is essential for managing cash flows and maintaining good relationships with vendors.

In summary, while the Days of Inventory on Hand ratio showed fluctuations, without data on DSO and Days of Payables, a comprehensive analysis of the company's complete activity cycle is limited. Monitoring these ratios over time and comparing them to industry benchmarks can provide valuable insights into Eastman Chemical Company's operational efficiency and financial health.

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Long-term

The Fixed Asset Turnover ratio for Eastman Chemical Company has been fluctuating over the past few years, starting at 1.66 in March 2020 and reaching a peak of 2.20 in June 2022 before declining slightly to 1.82 in June 2023 and then increasing to 2.06 in September 2023. It is important to note that the data for December 2023 and onwards is not available.

On the other hand, the Total Asset Turnover ratio has also shown variability during the same period, starting at 0.55 in March 2020, increasing to 0.68 by December 2021, and then experiencing some fluctuations but staying within the range of 0.62 to 0.76 until December 2024.

Overall, the Fixed Asset Turnover ratio indicates how efficiently Eastman Chemical Company is utilizing its fixed assets to generate revenue, with a general increasing trend until September 2023. The Total Asset Turnover ratio reflects the company's ability to generate sales from all its assets, showing some fluctuations but generally maintaining a stable performance over the years.