FMC Corporation (FMC)

Short-term

Turnover ratios

The inventory turnover ratio measures how efficiently a company manages its inventory. FMC Corporation's inventory turnover has experienced fluctuations over the years, decreasing from 2.36 in 2020 to 1.54 in 2023, before rebounding to 2.16 in 2024. A declining inventory turnover may indicate inefficiencies in managing inventory levels or challenges in selling products.

The receivables turnover ratio, which indicates how effectively the company collects its receivables, is not available for FMC Corporation for any of the years provided. This lack of information makes it difficult to assess the company's efficiency in collecting payments from customers.

Similarly, the payables turnover ratio, which evaluates how quickly the company pays its suppliers, is also not provided for FMC Corporation. Without this ratio, it is challenging to gauge the company's payment practices and relationships with suppliers.

The working capital turnover ratio assesses how efficiently the company utilizes its working capital to generate sales. FMC Corporation's working capital turnover has shown a decreasing trend, declining from 3.00 in 2020 to 2.19 in 2024. A decreasing working capital turnover may indicate challenges in effectively utilizing working capital to drive sales growth.

In summary, FMC Corporation's activity ratios reflect mixed performance in managing inventory, working capital, and collection of receivables. The lack of information on receivables and payables turnover limits a comprehensive assessment of the company's efficiency in managing accounts receivables and payables. It would be beneficial for FMC Corporation to focus on improving inventory management, working capital utilization, and potentially provide more transparency on its receivables and payables turnover in future financial reporting.

---

Average number of days

To analyze FMC Corporation's activity ratios:

1. Days of Inventory on Hand (DOH):
- As of December 31, 2020, FMC Corporation had 154.39 days of inventory on hand, indicating the average number of days the company holds inventory before selling it.
- This ratio increased to 178.56 days by December 31, 2021, suggesting a lengthening of the inventory holding period.
- Subsequently, by December 31, 2022, the DOH decreased to 173.45 days, implying a slight improvement in inventory management efficiency.
- However, the ratio spiked significantly to 237.02 days by December 31, 2023, which may indicate potential issues such as overstocking or slowing sales.
- Finally, as of December 31, 2024, the DOH decreased to 168.87 days, signaling a potential improvement in inventory turnover.

2. Days of Sales Outstanding (DSO):
- The data provided does not include information on Days of Sales Outstanding for the years under consideration. DSO is a key metric in evaluating how quickly a company collects payment from its customers.

3. Number of Days of Payables:
- Similarly, information on the Number of Days of Payables is not available in the dataset. This ratio is crucial for understanding how long a company takes to pay its suppliers.

Overall, the analysis of FMC Corporation's DOH over the years reveals fluctuations in inventory management efficiency. The increasing trend up to 2023 followed by a decrease in 2024 suggests potential shifts in the company's inventory policies and sales dynamics. Additional information on DSO and payables turnover would provide a more holistic view of FMC Corporation's overall liquidity and efficiency in managing cash flow.

---

Long-term

FMC Corporation's fixed asset turnover has shown a consistent increasing trend over the past few years, reflecting the efficiency with which the company generates revenue from its fixed assets. The ratio has increased from 6.02 in 2020 to 6.83 in 2022. This indicates that the company is effectively utilizing its fixed assets to generate sales.

On the other hand, the total asset turnover ratio, which measures how efficiently the company is using all its assets to generate revenue, has shown some fluctuations. The ratio increased from 0.46 in 2020 to 0.52 in 2022, indicating an improvement in the company's overall asset utilization efficiency. However, there was a slight decrease in 2023 and 2024, with the ratio dropping to 0.38 and 0.36, respectively.

Overall, the increasing trend in the fixed asset turnover and the improvement in the total asset turnover up to 2022 suggest that FMC Corporation has been effectively managing its assets to generate revenue. However, the fluctuations in the total asset turnover in 2023 and 2024 may require further investigation to understand the factors impacting the company's asset utilization efficiency during those years.