ESCO Technologies Inc (ESE)
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 | 2.90 | 3.15 | 2.96 | 3.00 | 2.99 | 3.24 | 2.80 | 2.73 | 2.75 | 3.02 | 3.17 | 3.04 | 3.13 | 3.39 | 2.99 | 3.20 | 3.30 | 3.51 | 3.03 | 3.23 |
| Receivables turnover | 4.93 | 4.77 | 4.85 | 4.99 | 5.51 | 5.18 | 4.76 | 5.45 | 5.36 | 4.88 | 5.30 | 5.68 | 5.02 | 5.05 | 5.48 | 4.99 | 4.96 | 4.65 | 4.78 | 5.00 |
| Payables turnover | 7.54 | 6.67 | 7.43 | 7.00 | 7.37 | 6.67 | 7.06 | 6.66 | 7.13 | 7.85 | 8.79 | 9.38 | 10.21 | 9.07 | 8.37 | 8.43 | 8.34 | 6.87 | 6.47 | 6.91 |
| Working capital turnover | 3.21 | 3.56 | 3.27 | 3.31 | 3.64 | 3.35 | 3.07 | 3.25 | 3.33 | 3.74 | 3.30 | 3.90 | 3.65 | 3.87 | 2.79 | 3.00 | 3.24 | 3.33 | 3.22 | 3.42 |
Esco Technologies, Inc.'s activity ratios provide insights into the company's efficiency in managing its resources.
1. Inventory Turnover:
- Esco's inventory turnover has shown some fluctuation over the periods, ranging from a low of 2.74 to a high of 3.24.
- The average inventory turnover rate indicates that the company is able to sell and replace its inventory approximately 3 times a year.
- A higher turnover rate suggests efficient management of inventory levels and a quicker conversion of inventory into sales.
2. Receivables Turnover:
- Esco's receivables turnover has been relatively consistent, with minor fluctuations between 4.77 and 5.55.
- The average receivables turnover rate indicates that the company collects its accounts receivable approximately 5 times a year.
- A higher turnover rate suggests that Esco efficiently collects outstanding customer balances and manages its credit policies effectively.
3. Payables Turnover:
- Esco's payables turnover has ranged from 6.67 to 7.54, showing some variability.
- The average payables turnover rate indicates that the company pays its suppliers approximately 7 times a year.
- A higher turnover rate implies that Esco is efficiently managing its payables and taking advantage of payment terms without negatively impacting supplier relationships.
4. Working Capital Turnover:
- Esco's working capital turnover has also shown variability, ranging from 3.08 to 3.66.
- The average working capital turnover rate indicates that the company generates sales approximately 3.35 times for every dollar of working capital invested.
- A higher turnover rate indicates that Esco is utilizing its working capital efficiently to generate revenues.
Overall, Esco Technologies, Inc.'s activity ratios suggest a generally efficient management of inventory, receivables, payables, and working capital, which is crucial for maintaining financial health and sustaining growth in the long run.
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 | 125.72 | 115.76 | 123.20 | 121.62 | 122.05 | 112.81 | 130.22 | 133.59 | 132.75 | 120.68 | 115.11 | 120.15 | 116.53 | 107.75 | 122.25 | 113.89 | 110.57 | 104.13 | 120.59 | 113.15 |
| Days of sales outstanding (DSO) | days | 73.98 | 76.52 | 75.28 | 73.07 | 66.21 | 70.48 | 76.73 | 66.97 | 68.12 | 74.79 | 68.84 | 64.24 | 72.76 | 72.27 | 66.64 | 73.22 | 73.54 | 78.50 | 76.44 | 72.98 |
| Number of days of payables | days | 48.38 | 54.70 | 49.13 | 52.13 | 49.54 | 54.70 | 51.71 | 54.77 | 51.20 | 46.48 | 41.54 | 38.93 | 35.75 | 40.24 | 43.60 | 43.30 | 43.79 | 53.17 | 56.42 | 52.79 |
The activity ratios for Esco Technologies, Inc. indicate the efficiency of the company in managing its operations and working capital.
1. Days of Inventory on Hand (DOH): The trend in DOH shows an increase from Q3 2022 to Q1 2024, with the highest level in Q2 2022 (133.23 days) and a recent decrease in Q4 2023 (115.76 days). This suggests that the company is holding inventory for a longer period, which may tie up cash and increase carrying costs. Esco should focus on optimizing inventory levels to improve liquidity and reduce obsolete inventory risks.
2. Days of Sales Outstanding (DSO): The DSO ratio reflects the average number of days it takes for the company to collect receivables from its customers. The trend indicates a fluctuation in collection efficiency, with the highest DSO in Q3 2022 (76.46 days) and the lowest in Q1 2023 (65.77 days). A lower DSO signifies faster collections, improving cash flow and liquidity. Esco should aim to reduce DSO further to enhance its working capital management.
3. Number of Days of Payables: The days of payables ratio demonstrate how long it takes the company to pay its suppliers. The trend shows a fluctuating pattern, with the highest level in Q4 2022 (54.70 days) and a recent decrease in Q1 2024 (48.38 days). A longer payables period can provide Esco with more cash on hand, but it should also maintain good relationships with suppliers by paying on time.
Overall, Esco Technologies, Inc. needs to focus on improving its inventory management, accelerating receivables collection, and maintaining adequate payables terms to enhance operational efficiency and optimize its use of working capital.
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 | 6.02 | 6.09 | 6.00 | 5.86 | 5.65 | 5.47 | 5.15 | 4.88 | 4.68 | 4.63 | 5.05 | 4.94 | 5.09 | 5.20 | 5.35 | 5.62 | 5.88 | 6.34 | 5.31 | 6.02 |
| Total asset turnover | 0.54 | 0.56 | 0.55 | 0.54 | 0.54 | 0.52 | 0.49 | 0.47 | 0.45 | 0.45 | 0.51 | 0.52 | 0.52 | 0.53 | 0.52 | 0.54 | 0.56 | 0.55 | 0.61 | 0.62 |
The long-term activity ratios of Esco Technologies, Inc., as reflected by the fixed asset turnover and total asset turnover ratios, have shown consistent and generally positive trends over the past eight quarters.
The fixed asset turnover ratio, which measures the efficiency of the company in generating sales from its investment in fixed assets, has been steadily increasing from 4.89 in Q2 2022 to 6.08 in Q1 2024. This indicates that Esco Technologies has been able to generate more revenue from its fixed assets over time, reflecting an improvement in asset utilization efficiency.
On the other hand, the total asset turnover ratio, which measures how effectively the company is utilizing all its assets to generate sales, has also shown a slightly increasing trend from 0.47 in Q2 2022 to 0.55 in Q1 2024. Although the increase is not as significant as that of the fixed asset turnover ratio, it still suggests that Esco Technologies has been making better use of its total assets to generate revenues.
Overall, the increasing trend in both fixed asset turnover and total asset turnover ratios indicates that Esco Technologies has been improving its efficiency in utilizing its assets to generate sales, which is a positive sign for the company's operational performance and potential future growth.