Emerson Electric Company (EMR)

Activity ratios

Short-term

Turnover ratios

	Sep 30, 2024	Jun 30, 2024	Mar 31, 2024	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
Inventory turnover	7.29	6.48	6.18	5.72	6.40	6.53	7.19	7.77	9.42	6.96	6.63	6.70	7.55	7.10	7.20	7.11	7.48	7.00	7.40	7.56
Receivables turnover	5.05	5.15	4.82	4.70	4.92	5.42	6.24	6.75	5.72	5.60	6.39	6.77	6.15	6.49	6.21	6.33	5.99	6.85	6.80	6.74
Payables turnover	11.91	11.92	11.47	11.27	10.06	11.18	12.11	12.74	12.86	7.91	7.76	7.45	7.34	7.64	8.08	8.44	8.41	10.32	10.02	9.46
Working capital turnover	3.91	13.73	12.21	17.57	1.72	1.79	12.18	22.08	26.94	34.15	3.46	3.36	8.36	8.53	10.25	12.87	5.56	9.08	195.30	21.47

Emerson Electric Company's activity ratios provide insight into how efficiently the company manages its resources.

1. Inventory Turnover: The inventory turnover ratio measures how many times a company sells and replaces its inventory during a specific period. Emerson Electric's inventory turnover has been relatively stable over the past few quarters, ranging from 5.72 to 9.42. A higher turnover indicates that the company is efficiently managing its inventory levels.

2. Receivables Turnover: This ratio shows how many times a company collects its accounts receivable during a period. Emerson Electric's receivables turnover has fluctuated between 4.70 and 6.77, suggesting varying effectiveness in collecting outstanding payments. A higher turnover is generally favorable as it indicates faster cash inflows.

3. Payables Turnover: The payables turnover ratio measures how quickly a company pays its suppliers. Emerson Electric's payables turnover has varied between 7.45 and 12.86, indicating differences in the company's payment terms with suppliers. A higher turnover may imply a more efficient use of trade credit.

4. Working Capital Turnover: This ratio evaluates how effectively a company utilizes its working capital to generate revenue. Emerson Electric's working capital turnover has shown significant fluctuations, with a wide range of values from 1.72 to 195.30. A higher turnover indicates a more efficient utilization of working capital.

Overall, while Emerson Electric's activity ratios reflect some fluctuations, the company generally demonstrates efficiency in managing its inventory, receivables, payables, and working capital. Monitoring these ratios over time can help assess the company's operational effectiveness and potential areas for improvement.

Average number of days

		Sep 30, 2024	Jun 30, 2024	Mar 31, 2024	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
Days of inventory on hand (DOH)	days	50.04	56.35	59.01	63.83	57.07	55.91	50.78	46.97	38.74	52.46	55.07	54.49	48.36	51.38	50.68	51.36	48.82	52.11	49.31	48.27
Days of sales outstanding (DSO)	days	72.32	70.90	75.70	77.60	74.26	67.39	58.46	54.05	63.85	65.15	57.10	53.93	59.36	56.23	58.80	57.64	60.93	53.31	53.65	54.15
Number of days of payables	days	30.64	30.61	31.82	32.38	36.28	32.66	30.13	28.64	28.38	46.15	47.04	49.01	49.73	47.79	45.18	43.22	43.43	35.35	36.44	38.57

The activity ratios for Emerson Electric Company indicate various trends in managing its inventory, receivables, and payables efficiently.

Days of Inventory on Hand (DOH): The company has shown fluctuations in its inventory management over the periods analyzed. The DOH has ranged between 38.74 days to 63.83 days, with a recent decrease from 59.01 days to 50.04 days. This suggests that Emerson Electric has been able to reduce the number of days it takes to sell its inventory, which can lead to cost savings and improved liquidity.

Days of Sales Outstanding (DSO): The DSO ratio reflects the average number of days it takes for the company to collect its accounts receivable. Emerson Electric has shown some variability in its collection efficiency, with DSO ranging from 53.31 days to 77.60 days. The recent increase in DSO from 70.90 days to 72.32 days may indicate a slowdown in collecting payments from customers.

Number of Days of Payables: This ratio indicates how long it takes for the company to pay its suppliers. Emerson Electric has managed its payables effectively, with the number of days of payables ranging from 28.38 days to 49.73 days. A recent decrease from 31.82 days to 30.64 days in the number of days of payables may suggest improved liquidity or more efficient cash management practices.

Overall, Emerson Electric Company's activity ratios show a mixed picture of inventory management, receivables collection, and payables management. The company may need to focus on maintaining a balance between these areas to optimize working capital and improve overall financial performance.

Long-term

	Sep 30, 2024	Jun 30, 2024	Mar 31, 2024	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
Fixed asset turnover	6.20	6.27	6.11	5.86	6.40	7.23	7.73	8.20	8.77	5.72	5.30	5.04	4.89	4.88	4.67	4.55	4.55	4.82	5.06	5.06
Total asset turnover	0.39	0.37	0.35	0.34	0.35	0.37	0.48	0.51	0.55	0.52	0.64	0.69	0.74	0.73	0.72	0.71	0.73	0.79	0.83	0.87

Emerson Electric Company's long-term activity ratios indicate the efficiency with which the company is utilizing its assets to generate sales revenue. The fixed asset turnover ratio has fluctuated over the periods presented, ranging from a low of 4.55 to a high of 8.77. This ratio measures how well the company is using its fixed assets to generate sales, with higher ratios generally indicating better efficiency.

On the other hand, the total asset turnover ratio has also varied, with values between 0.34 and 0.87. This ratio reflects the company's overall efficiency in generating sales from all of its assets, including both fixed and current assets. A higher total asset turnover ratio suggests that the company is more efficient in its use of all assets to generate revenue.

In analyzing these ratios, Emerson Electric Company's performance appears to have been somewhat inconsistent, with fluctuations in both fixed asset turnover and total asset turnover ratios. It is important for the company to closely monitor these ratios and strive for improvement in asset utilization efficiency to enhance overall operational performance and profitability.