Flowserve Corporation (FLS)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Inventory turnover | 3.73 | 3.44 | 3.26 | 3.67 | 3.91 |
| Receivables turnover | — | — | — | — | — |
| Payables turnover | — | — | — | — | — |
| Working capital turnover | 3.17 | 3.41 | 2.99 | 2.82 | 2.12 |
Flowserve Corporation's inventory turnover ratio has shown a slight decrease over the years, from 3.91 in 2020 to 3.73 in 2024. This indicates that the company is selling its inventory less efficiently in recent years.
The receivables turnover ratio is not provided in the data, indicating that we lack information to assess how quickly Flowserve is collecting payments from its customers.
Similarly, the payables turnover ratio is also not available, making it challenging to evaluate how efficiently the company is managing its payables.
On the other hand, the working capital turnover ratio has shown a fluctuating trend, with an increase from 2020 to 2023 and then a slight decrease in 2024. This indicates that Flowserve has been using its working capital effectively to generate sales, although there was a minor decline in 2024.
Overall, based on the data provided, Flowserve Corporation should focus on improving its inventory turnover and monitor its working capital turnover to ensure efficient use of resources. Additionally, disclosing information on receivables and payables turnover would provide a more comprehensive view of the company's operational efficiency.
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 | 97.84 | 106.25 | 111.86 | 99.37 | 93.26 |
| Days of sales outstanding (DSO) | days | — | — | — | — | — |
| Number of days of payables | days | — | — | — | — | — |
Based on the provided data for Flowserve Corporation, let's analyze the activity ratios:
1. Days of Inventory on Hand:
- In 2020, the company had 93.26 days' worth of inventory on hand, which increased to 99.37 days in 2021, further rising to 111.86 days in 2022, before decreasing to 106.25 days in 2023 and then to 97.84 days in 2024. The fluctuation in this ratio indicates changes in the management of inventory levels over the years.
2. Days of Sales Outstanding (DSO):
- Data for Days of Sales Outstanding is missing for all years provided. Typically, this ratio measures how efficiently a company is collecting its accounts receivable. The absence of data may indicate a lack of information regarding the company's credit policies or collection efficiency.
3. Number of Days of Payables:
- Similar to DSO, data for the Number of Days of Payables is not available for the years provided. This ratio helps in understanding how long it takes for a company to pay its suppliers. The absence of this data makes it challenging to assess the company's payment practices and liquidity management in relation to suppliers.
In summary, based on the limited data available, Flowserve Corporation's inventory management has shown fluctuations over the years, but further insights into the collection of receivables and payment to suppliers are needed to have a comprehensive view of the company's working capital management and operational efficiency.
Long-term
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Fixed asset turnover | — | — | 5.35 | 4.99 | 6.69 |
| Total asset turnover | 0.83 | 0.85 | 0.75 | 0.75 | 0.70 |
To analyze Flowserve Corporation's long-term activity ratios, we will focus on the Fixed Asset Turnover and Total Asset Turnover ratios from the provided data.
1. Fixed Asset Turnover:
- The Fixed Asset Turnover ratio measures the efficiency with which Flowserve generates sales revenue from its investment in fixed assets.
- In 2020, Flowserve's Fixed Asset Turnover was 6.69, indicating that the company generated $6.69 in sales for every $1 invested in fixed assets.
- By 2021, the ratio decreased to 4.99, suggesting a decline in the efficiency of utilizing fixed assets to generate revenue.
- In 2022, there was a slight improvement in the ratio to 5.35, indicating a better utilization of fixed assets compared to the previous year.
- Unfortunately, data for 2023 and 2024 are unavailable, so we are unable to track the trend for those years.
2. Total Asset Turnover:
- The Total Asset Turnover ratio reflects Flowserve's ability to generate sales in relation to its total assets.
- In 2020, Flowserve's Total Asset Turnover was 0.70, indicating that the company generated $0.70 in sales for every $1 of total assets.
- Over the next two years, the ratio remained relatively stable at 0.75, suggesting a consistent performance in generating sales relative to total assets.
- By 2023, there was an improvement in the ratio to 0.85, indicating a more efficient use of total assets to generate sales.
- In 2024, the ratio slightly decreased to 0.83, but it still remained higher than the 2020 figure, suggesting continued effectiveness in utilizing assets to drive revenue.
In conclusion, the analysis of Flowserve Corporation's Fixed Asset Turnover and Total Asset Turnover ratios reveals fluctuations in efficiency over the years, with improvements noted in certain periods. It is essential for the company to monitor and optimize its asset utilization to enhance operational performance and profitability in the long term.