GE HealthCare Technologies Inc. (GEHC)

Short-term

Turnover ratios

1. Inventory Turnover:
- The inventory turnover ratio measures how efficiently a company manages its inventory.
- GE HealthCare Technologies Inc. had an inventory turnover of 1.94 in December 31, 2022, which improved to 2.20 by December 31, 2023 and remained at 2.20 by December 31, 2024.
- This indicates that the company is turning over its inventory more frequently in recent years, suggesting better inventory management.

2. Receivables Turnover:
- The receivables turnover ratio reflects how quickly a company collects its accounts receivables.
- GE HealthCare Technologies Inc. had a receivables turnover of 5.34 in December 31, 2022. There is missing data for December 31, 2023, and an exceptionally high turnover of 187.33 by December 31, 2024.
- The missing data for 2023 makes it challenging to assess trends, but the significant increase in 2024 could indicate a more efficient collection of receivables.

3. Payables Turnover:
- The payables turnover ratio measures how quickly a company pays its suppliers.
- GE HealthCare Technologies Inc. had a payables turnover of 1.42 in December 31, 2022, which slightly increased to 1.46 by December 31, 2023, and then decreased to 1.41 by December 31, 2024.
- The slight fluctuations indicate that the company has been consistent in its payment practices to suppliers over the years.

4. Working Capital Turnover:
- The working capital turnover ratio indicates how efficiently a company is utilizing its working capital to generate sales.
- GE HealthCare Technologies Inc. had a working capital turnover of 16.15 in December 31, 2022, which significantly increased to 44.18 by December 31, 2023, and further rose to 54.91 by December 31, 2024.
- The increasing trend in working capital turnover signifies that the company is effectively utilizing its working capital to support sales growth.

In summary, GE HealthCare Technologies Inc. has shown improvements in inventory turnover and working capital turnover, with some fluctuations in receivables turnover and payables turnover. Overall, these activity ratios indicate that the company has been managing its operating cycle efficiently and effectively utilizing its resources to support sales growth.

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Average number of days

Based on the provided data for GE HealthCare Technologies Inc., the activity ratios show the following trends:

1. Days of Inventory on Hand (DOH):
- As of December 31, 2022, the company had 188.31 days of inventory on hand, which decreased to 165.76 days by December 31, 2023, and remained relatively stable at 165.82 days by December 31, 2024. A decreasing trend in DOH indicates a more efficient management of inventory, as the company is selling inventory more quickly or maintaining lower levels of inventory.

2. Days of Sales Outstanding (DSO):
- As of December 31, 2022, the DSO was 68.37 days, but the value for December 31, 2023, is not provided ("— days"), implying a lack of data or an unusual situation. By December 31, 2024, the DSO significantly decreased to 1.95 days. A lower DSO suggests that the company is collecting receivables faster, which is a positive sign of efficient credit and collection management.

3. Number of Days of Payables:
- The number of days of payables was 257.26 days as of December 31, 2022, decreased slightly to 249.22 days by December 31, 2023, and increased slightly to 258.44 days by December 31, 2024. An upward trend in the number of days of payables may indicate that the company is taking longer to pay its suppliers, potentially improving cash flow management.

Overall, the trends in the activity ratios of GE HealthCare Technologies Inc. suggest improvements in inventory management and collection of receivables, with a relatively stable trend in payables management over the period analyzed.

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Long-term

Based on the provided data for GE HealthCare Technologies Inc., we can analyze its long-term activity ratios for the years ending December 31, 2022, 2023, and 2024.

1. Fixed Asset Turnover:
- The fixed asset turnover ratio measures the efficiency of the company's use of its fixed assets to generate sales. A higher ratio indicates better utilization of fixed assets. In this case, the fixed asset turnover ratios for the years 2022, 2023, and 2024 were 9.09, 8.84, and 8.74, respectively.
- The decreasing trend in the fixed asset turnover ratio from 2022 to 2024 suggests a slight decline in the company's efficiency in utilizing its fixed assets to generate revenue. However, the ratios are relatively high, indicating that GE HealthCare Technologies Inc. effectively generates sales from its fixed assets.

2. Total Asset Turnover:
- The total asset turnover ratio reflects how efficiently the company uses its total assets to generate revenue. A higher ratio indicates more effective asset utilization. In this case, the total asset turnover ratios for the years 2022, 2023, and 2024 were 0.66, 0.58, and 0.58, respectively.
- The constant total asset turnover ratios from 2023 to 2024 indicate a consistent level of asset utilization to generate sales. However, the ratios are relatively low, suggesting that GE HealthCare Technologies Inc. may not be efficiently using its total assets to generate revenue compared to industry standards.

In conclusion, GE HealthCare Technologies Inc. demonstrates high efficiency in utilizing its fixed assets to generate sales, as indicated by the relatively high fixed asset turnover ratios. However, there is room for improvement in utilizing total assets more effectively to increase revenue generation, given the lower total asset turnover ratios observed.