Enersys (ENS)

Short-term

Turnover ratios

Enersys' activity ratios provide insight into how efficiently the company is managing its resources to generate sales.

1. Inventory Turnover: The inventory turnover ratio indicates how many times a company sells and replaces its inventory during a specific period. Enersys' inventory turnover has shown a declining trend from 4.32 in March 2021 to 3.41 in March 2025. This suggests that the company is holding onto its inventory for a longer period, which may indicate lower sales or potential issues with inventory management.

2. Receivables Turnover: The receivables turnover ratio measures how efficiently a company collects outstanding receivables. Enersys has seen an increasing trend in its receivables turnover, from 4.51 in March 2021 to 6.05 in March 2025. This improvement indicates that Enersys is collecting its receivables more quickly, which is a positive sign for its cash flow and liquidity.

3. Payables Turnover: The payables turnover ratio reflects how efficiently a company pays its suppliers. Enersys' payables turnover has fluctuated over the years, with a peak in March 2023 at 7.57 and a decrease to 6.22 in March 2025. This may suggest changes in the company's payment practices or relationships with suppliers.

4. Working Capital Turnover: The working capital turnover ratio measures how effectively a company utilizes its working capital to generate revenue. Enersys' working capital turnover has also shown fluctuations, with a peak in March 2024 at 3.38 and a decrease to 2.75 in March 2025. A higher ratio indicates better utilization of working capital in generating sales.

Overall, Enersys should further analyze the reasons behind the fluctuations in its activity ratios to identify areas for improvement in managing its inventory, receivables, payables, and working capital efficiently.

---

Average number of days

Enersys's Days of Inventory on Hand (DOH) have seen a general upward trend over the past five years, indicating that the company is holding onto inventory for longer periods. This could suggest potential issues with inventory management efficiency and increased carrying costs.

Regarding Days of Sales Outstanding (DSO), Enersys experienced fluctuations over the period, but generally showed improvements in collecting receivables more quickly. The decreasing trend in DSO indicates that the company is able to convert sales into cash at a faster pace, which is a positive sign for liquidity and working capital management.

In terms of the Number of Days of Payables, Enersys has shown a mixed performance with fluctuations in the time it takes to pay its suppliers. The trend has been somewhat volatile, but overall, the company tends to take more time to settle payables in recent years. This could imply either strained supplier relationships or deliberate efforts to manage cash flow by extending payment periods.

Overall, Enersys’s activity ratios suggest some areas that may require attention, particularly in inventory management, while also highlighting strengths in receivables collection efficiency. Close monitoring and potentially adjusting strategies related to inventory turnover and payables management could help improve working capital efficiency and overall financial performance.

---

Long-term

The Fixed Asset Turnover ratio for Enersys has shown a consistent improvement over the years, increasing from 5.33 in March 2021 to 6.20 in March 2023. This indicates that the company is generating more revenue relative to its investment in fixed assets, highlighting improved efficiency in utilizing its long-term assets to generate sales.

On the other hand, the Total Asset Turnover ratio has displayed some fluctuations over the same period. It increased from 0.86 in March 2021 to 1.03 in March 2023, suggesting that the company has been more effective in leveraging its total assets to generate sales during these years. However, the ratio decreased to 0.91 by March 2025, indicating a potential decline in the company's efficiency in generating sales from its total assets.

Overall, the improvement in the Fixed Asset Turnover ratio signifies enhanced operational efficiency in terms of utilizing fixed assets, while the fluctuation in the Total Asset Turnover ratio suggests some variability in the company's overall efficiency in generating sales from its total asset base.