Eastman Chemical Company (EMN)

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 4.25 4.30 3.97 4.20 4.46 4.34 4.64 4.98 5.30 4.60 4.71 4.42 4.71 4.89 4.70 4.16 4.24 4.27 4.22 4.37
Receivables turnover 10.37 10.65 10.64 9.78 10.67 9.59 9.02 9.08 8.29 7.35 7.25 7.03 6.30 7.88 9.62 8.74 7.79 7.93 7.85 7.65
Payables turnover 4.96 — — — 5.25 5.11 5.05 5.04 5.27 5.10 5.02 5.11 6.18 7.17 8.70 6.63 6.02 6.13 5.67 5.70
Working capital turnover 10.18 9.85 11.11 10.26 20.08 12.14 12.76 6.01 6.25 5.66 3.84 4.85 5.64 4.87 5.28 5.95 6.05 6.94 7.49 8.28

Eastman Chemical Co's activity ratios provide insight into the efficiency of the company's operations and management of its working capital.

- Inventory turnover has been relatively stable over the quarters, ranging from 3.97 to 4.64. This indicates that the company is effectively managing its inventory levels and converting them into sales.

- Receivables turnover shows a slight fluctuation but generally remains above 6.5, indicating that Eastman is efficient in collecting payments from its customers.

- Payables turnover has shown some variability, with the highest turnover in Q4 2022 at 6.4 and the lowest in Q3 2023 at 3.82. This suggests differences in the company's payment terms with suppliers.

- Working capital turnover has been consistently high, especially in Q4 2022 at 20.08, demonstrating the company's ability to generate revenue relative to the amount of working capital invested.

Overall, Eastman Chemical Co's activity ratios suggest that the company is effectively managing its inventory, receivables, payables, and working capital to support its operational efficiency and profitability.

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 85.93 84.85 91.86 86.93 81.88 84.01 78.68 73.23 68.83 79.32 77.56 82.67 77.46 74.61 77.58 87.80 86.18 85.44 86.39 83.46
Days of sales outstanding (DSO) days 35.19 34.26 34.31 37.32 34.22 38.07 40.47 40.19 44.04 49.65 50.37 51.91 57.90 46.29 37.95 41.76 46.88 46.03 46.52 47.70
Number of days of payables days 73.52 — — — 69.47 71.42 72.30 72.40 69.24 71.63 72.75 71.41 59.04 50.91 41.93 55.04 60.67 59.53 64.42 64.07

The activity ratios of Eastman Chemical Co for the past eight quarters indicate fluctuating trends in efficiency and effectiveness of managing its inventory, receivables, and payables.

Days of Inventory on Hand (DOH) have shown some variability ranging from a low of 73.23 days in Q1 2022 to a high of 91.86 days in Q2 2023. This ratio measures how many days it takes for the company to sell its inventory. A lower number indicates better inventory management and faster turnover.

Days of Sales Outstanding (DSO) have also fluctuated, with a low of 44.06 days in Q4 2022 to a high of 55.79 days in Q1 2022. DSO measures how long it takes the company to collect payments from its customers. A lower DSO suggests that the company is efficient in collecting receivables.

The number of days of payables has varied significantly, with a low of 57.02 days in Q4 2022 to a high of 95.65 days in Q3 2023. This ratio indicates the number of days it takes for the company to pay its suppliers. An increasing number of days of payables may suggest the company is taking longer to settle its payables, which could have cash flow implications.

Overall, the company's performance in managing inventory, receivables, and payables has shown mixed results over the past eight quarters. It is essential for Eastman Chemical Co to closely monitor these activity ratios to ensure efficient working capital management and sustainable financial health.

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 1.66 1.73 1.82 1.95 2.05 2.19 2.20 2.16 2.10 1.93 1.81 1.58 1.53 1.55 1.59 1.66 1.66 1.71 1.74 1.78
Total asset turnover 0.63 0.64 0.66 0.69 0.72 0.73 0.73 0.68 0.68 0.61 0.58 0.53 0.53 0.53 0.54 0.55 0.58 0.59 0.59 0.61

The fixed asset turnover for Eastman Chemical Co has been showing a decreasing trend over the past eight quarters, with a significant drop from 2.05 in Q4 2022 to 1.66 in Q4 2023. This indicates that the company is generating less revenue per dollar of fixed assets invested. This declining trend may raise concerns about the efficiency of utilizing fixed assets to generate sales.

On the other hand, the total asset turnover ratio has also been on a decreasing trend, albeit less steep compared to fixed asset turnover. The ratio decreased from 0.72 in Q4 2022 to 0.63 in Q4 2023. This suggests that the company is generating less revenue per dollar of total assets, which may raise questions about the overall efficiency of asset utilization in generating sales.

In summary, the declining trends in both fixed asset turnover and total asset turnover ratios for Eastman Chemical Co indicate potential inefficiencies in utilizing assets to generate sales. Further analysis and evaluation of the company's operational and strategic decisions may be necessary to address these concerns and improve long-term sustainability.