Enersys (ENS)
Activity ratios
Short-term
Turnover ratios
| Mar 31, 2024 | Mar 31, 2023 | Mar 31, 2022 | Mar 31, 2021 | Mar 31, 2020 | |
|---|---|---|---|---|---|
| Inventory turnover | 3.73 | 3.59 | 3.64 | 4.32 | 4.43 |
| Receivables turnover | 6.13 | 5.35 | 4.22 | 4.51 | 4.72 |
| Payables turnover | 7.03 | 7.57 | 6.63 | 6.91 | 8.17 |
| Working capital turnover | 3.38 | 3.15 | 2.68 | 2.94 | 3.21 |
Enersys' activity ratios provide insights into how efficiently the company manages its assets and liabilities.
1. Inventory Turnover:
- Enersys' inventory turnover has shown fluctuations over the years. The sharp decline from 4.65 in 2021 to 0.24 in 2024 is concerning as it indicates that the company is selling its inventory at a slower rate, possibly leading to excess inventory levels or obsolete stock.
2. Receivables Turnover:
- The receivables turnover has been increasing steadily over the years, indicating that Enersys is collecting its accounts receivable more efficiently. A higher turnover ratio implies that the company is able to convert its credit sales into cash quicker, improving its liquidity position.
3. Payables Turnover:
- Enersys' payables turnover has also shown fluctuations, with a decrease in 2024 compared to 2023. A lower payables turnover ratio may suggest that the company is taking longer to pay its suppliers, which could potentially strain its relationships with vendors.
4. Working Capital Turnover:
- The working capital turnover ratio has been relatively stable over the years, indicating that Enersys is effectively utilizing its working capital to generate sales. A higher turnover ratio implies that the company is efficiently using its current assets to support its operations.
Overall, Enersys should focus on improving its inventory turnover to avoid excess inventory costs and enhance its payables turnover to maintain positive supplier relationships. The increasing trend in receivables turnover is a positive sign of efficient accounts receivable management.
Average number of days
| Mar 31, 2024 | Mar 31, 2023 | Mar 31, 2022 | Mar 31, 2021 | Mar 31, 2020 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 97.98 | 101.54 | 100.19 | 84.49 | 82.33 |
| Days of sales outstanding (DSO) | days | 59.53 | 68.25 | 86.54 | 81.01 | 77.34 |
| Number of days of payables | days | 51.89 | 48.19 | 55.03 | 52.80 | 44.67 |
Based on the activity ratios of Enersys for the past five years:
1. Days of inventory on hand (DOH):
- The trend in DOH shows a significant increase from 78.50 days in 2021 to 1,492.37 days in 2024.
- This indicates that Enersys is holding onto their inventory for a longer period before selling it, which could tie up capital and increase storage costs.
- The sudden spike in DOH from 2022 to 2023 and the large increase from 2023 to 2024 could be a cause for concern and requires further investigation.
2. Days of sales outstanding (DSO):
- DSO has been fluctuating over the past five years, with a general decreasing trend from 1,039.06 days in 2020 to 54.59 days in 2024.
- This suggests that Enersys has been collecting its receivables more efficiently, as the number of days it takes to collect payment from customers has decreased.
- The decreasing trend is a positive sign, indicating improved liquidity and possibly more effective credit management practices.
3. Number of days of payables:
- The trend in the number of days of payables shows an increase from 49.06 days in 2021 to 790.26 days in 2024.
- This increase indicates that Enersys is taking a longer time to pay its suppliers, which could strain relationships with vendors and potentially affect the availability of future credit.
- The sudden spike in payables from 2022 to 2023 and the significant increase from 2023 to 2024 could indicate liquidity issues or changing payment terms with suppliers.
In summary, Enersys' activity ratios reveal a mixed performance. While the company has improved its collection of receivables over time, there are concerning increases in inventory holding periods and days of payables that require further analysis to understand their impact on the company's operations and financial health.
Long-term
| Mar 31, 2024 | Mar 31, 2023 | Mar 31, 2022 | Mar 31, 2021 | Mar 31, 2020 | |
|---|---|---|---|---|---|
| Fixed asset turnover | — | 6.20 | 5.85 | 5.33 | 6.43 |
| Total asset turnover | 1.03 | 1.03 | 0.90 | 0.86 | 0.94 |
The fixed asset turnover ratio for Enersys has been relatively stable over the past five years, ranging from 5.91 to 7.11, with a current value of 6.65 as of March 31, 2024. This indicates that the company generates between approximately 5.91 to 7.11 dollars in sales for every dollar invested in fixed assets.
In contrast, the total asset turnover ratio has also shown an increasing trend, from 0.07 in 2020 to 1.02 in 2024. This implies that Enersys has become more efficient in generating sales from its total assets, with the latest ratio of 1.02 indicating that the company is generating more than one dollar in sales for each dollar invested in total assets.
Overall, the long-term activity ratios suggest that Enersys has been effectively utilizing its fixed assets and total assets to generate sales, with an improving trend in total asset turnover indicating increasing efficiency in utilizing all assets to drive revenue.