Eaton Corporation PLC (ETN)

Activity ratios

Short-term

Turnover ratios

	Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Inventory turnover	3.64	3.90	4.04	4.48	5.88
Receivables turnover	—	—	—	—	—
Payables turnover	—	—	—	—	—
Working capital turnover	6.31	5.91	8.70	65.65	5.49

Based on the provided data, let's analyze the activity ratios of Eaton Corporation PLC:

1. Inventory Turnover:
- The inventory turnover ratio indicates how many times inventory is sold and replaced during a period.
- The trend for Eaton Corporation PLC shows a decrease in inventory turnover from 5.88 in 2020 to 3.64 in 2024.
- A decreasing trend in inventory turnover may suggest inefficient inventory management or potential issues with sales and demand.

2. Receivables Turnover:
- No data is available for receivables turnover in the provided information.
- Receivables turnover ratio measures the efficiency of a company in collecting its outstanding receivables.
- Lack of data for this ratio makes it difficult to assess the efficiency of Eaton Corporation PLC in collecting receivables.

3. Payables Turnover:
- No data is available for payables turnover in the provided information.
- Payables turnover ratio assesses how quickly a company pays its suppliers.
- Without this ratio, it is challenging to evaluate Eaton Corporation PLC's payment behavior towards its suppliers.

4. Working Capital Turnover:
- The working capital turnover ratio signifies how efficiently a company utilizes its working capital to generate sales.
- Eaton Corporation PLC's working capital turnover fluctuated significantly over the years, with a peak of 65.65 in 2021 and a low of 5.91 in 2023.
- Such fluctuation could indicate changes in the company's working capital management strategies or operational efficiency.

In summary, while the inventory turnover ratio for Eaton Corporation PLC has been on a declining trend, the lack of data for receivables turnover and payables turnover limits a comprehensive assessment of the company's overall activity ratio performance. The fluctuation in working capital turnover suggests varying efficiency levels in utilizing working capital for generating sales over the years.

Average number of days

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Days of inventory on hand (DOH)	days	100.35	93.63	90.30	81.52	62.04
Days of sales outstanding (DSO)	days	—	—	—	—	—
Number of days of payables	days	—	—	—	—	—

Eaton Corporation PLC's activity ratios indicate the efficiency of its inventory management. The Days of Inventory on Hand (DOH) has been increasing steadily over the years, from 62.04 days as of December 31, 2020, to 100.35 days as of December 31, 2024. This suggests that the company is holding inventory for a longer period, which may tie up capital and indicate potential issues with inventory turnover.

The Days of Sales Outstanding (DSO) and Number of Days of Payables data are not provided, indicating a lack of information on the company's accounts receivable and accounts payable turnover. However, it is essential to monitor these metrics in conjunction with DOH to assess the overall efficiency of Eaton Corporation PLC's working capital management.

Overall, the increasing trend in DOH warrants further investigation into the company's inventory management practices and potential impact on cash flow and profitability. Further details on DSO and payables turnover would provide a more complete picture of Eaton Corporation PLC's liquidity and operational efficiency.

Long-term

	Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Fixed asset turnover	—	—	5.58	5.60	6.02
Total asset turnover	0.65	0.60	0.59	0.58	0.56

Eaton Corporation PLC's long-term activity ratios indicate the efficiency with which the company utilizes its assets.

The Fixed Asset Turnover ratio shows a gradual decline from 6.02 in 2020 to 5.60 in 2021 and further to 5.58 in 2022. This decline suggests that Eaton is generating slightly less revenue relative to its investment in fixed assets over this period. The absence of data for 2023 and 2024 makes it challenging to provide a complete trend analysis for this ratio.

In contrast, the Total Asset Turnover ratio exhibits a more positive trend, increasing from 0.56 in 2020 to 0.65 in 2024. This improvement indicates that Eaton has been more effective in generating revenue from its total assets, including both fixed and current assets, over the years, which could be a sign of increased operational efficiency or better asset utilization.

Overall, while the Fixed Asset Turnover ratio shows a slight decrease, the Total Asset Turnover ratio demonstrates a favorable upward trend, suggesting that Eaton Corporation PLC has been making efficient use of its assets to generate revenue and improve its operational performance over the analyzed period.