Enovis Corp (ENOV)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Inventory turnover | 3.88 | 4.15 | 10.86 | 5.61 | 5.89 |
| Receivables turnover | 5.83 | 5.70 | 5.87 | 5.72 | 5.73 |
| Payables turnover | 13.72 | 13.04 | 24.92 | 9.60 | 9.36 |
| Working capital turnover | 3.23 | 6.63 | 2.93 | 5.38 | 5.89 |
Enovis Corp's activity ratios provide insights into the efficiency of the company's operations in managing its assets and liabilities.
The inventory turnover ratio has been on a declining trend over the past five years, indicating that Enovis Corp is taking longer to sell its inventory. This could suggest potential inefficiencies in inventory management or changes in customer demand.
Conversely, the receivables turnover ratio has remained relatively stable over the same period, implying that Enovis Corp has been able to collect its receivables efficiently. A consistent receivables turnover ratio suggests that the company has effective credit policies and is successful in collecting payments from customers.
The payables turnover ratio has shown fluctuations but generally indicates that Enovis Corp is taking a reasonable amount of time to pay its suppliers. A higher payables turnover ratio suggests that the company is managing its payables effectively and may be negotiating favorable credit terms with suppliers.
The working capital turnover ratio reflects how efficiently Enovis Corp is utilizing its working capital to generate sales. The ratio has shown variability over the years, with a significant decrease in 2023 compared to the previous year. A lower working capital turnover ratio may indicate inefficiencies in utilizing working capital to support sales activities.
Overall, the analysis of Enovis Corp's activity ratios highlights areas of strength and potential areas for improvement in the company's operational efficiency and management of assets and liabilities.
Average number of days
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 94.17 | 88.04 | 33.61 | 65.06 | 61.94 |
| Days of sales outstanding (DSO) | days | 62.60 | 64.01 | 62.14 | 63.76 | 63.65 |
| Number of days of payables | days | 26.61 | 27.99 | 14.64 | 38.04 | 38.99 |
The activity ratios of Enovis Corp provide insight into its management of inventory, receivables, and payables.
1. Days of Inventory on Hand (DOH):
- Enovis Corp's days of inventory on hand increased over the past five years, indicating a longer time taken to sell inventory.
- The trend suggests that the company may be carrying excess inventory or facing challenges in turning over its inventory efficiently.
2. Days of Sales Outstanding (DSO):
- Enovis Corp's days of sales outstanding remained relatively stable over the years, indicating consistent collection practices for accounts receivable.
- The DSO indicates the average number of days it takes for the company to collect on its credit sales, with a lower number being more favorable.
3. Number of Days of Payables:
- Enovis Corp's number of days of payables decreased from 2021 to 2022 but then increased in 2023.
- A longer period of payables suggests that the company is taking more time to pay its suppliers, potentially indicating a strategic use of trade credit to manage cash flow.
Overall, Enovis Corp's activity ratios reflect areas where the company may need to improve its working capital management, particularly in terms of inventory turnover and payables management. A focused effort on optimizing these ratios could lead to enhanced efficiency and profitability for the company.
Long-term
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Fixed asset turnover | 6.28 | 6.44 | 15.96 | 6.08 | 6.56 |
| Total asset turnover | 0.38 | 0.36 | 0.44 | 0.40 | 0.44 |
The fixed asset turnover ratio measures how efficiently a company generates sales revenue from its investments in fixed assets. Enovis Corp's fixed asset turnover has been trending downwards over the past five years, from 6.77 in 2019 to 6.30 in 2023. This indicates a decrease in the company's ability to generate sales from its fixed assets, potentially due to changes in the company's operations or utilization of fixed assets.
On the other hand, the total asset turnover ratio reflects how well a company utilizes all its assets to generate revenue. Enovis Corp's total asset turnover has also shown a decreasing trend over the same period, declining from 0.45 in 2019 to 0.38 in 2023. This suggests that the company's overall efficiency in generating sales revenue from its total assets has decreased over the years.
Overall, the decreasing trends in both the fixed asset turnover and total asset turnover ratios for Enovis Corp indicate a potential decline in the company's efficiency in utilizing its assets to generate sales revenue. Further analysis would be necessary to understand the factors driving these trends and to assess the company's overall long-term asset management strategies.