Corning Incorporated (GLW)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Inventory turnover | 3.25 | 3.33 | 3.64 | 3.13 | 3.22 |
| Receivables turnover | 8.01 | 8.24 | 7.03 | 5.30 | 6.27 |
| Payables turnover | 5.91 | 5.37 | 5.59 | 6.62 | 4.71 |
| Working capital turnover | 4.35 | 6.23 | 4.94 | 2.67 | 2.92 |
The activity ratios for Corning, Inc. provide insight into the efficiency of the company in managing its inventory, receivables, payables, and working capital over the past five years.
1. Inventory turnover:
- Corning's inventory turnover ratio has been relatively stable over the period, ranging from 3.19 to 3.64 times. This indicates that the company is managing its inventory effectively, with the ability to sell and replace its inventory multiple times a year.
2. Receivables turnover:
- Corning's receivables turnover has shown an increasing trend, from 5.30 in 2020 to 8.01 in 2023. This suggests that the company is collecting its receivables more efficiently, possibly due to improved credit policies or better debtor management.
3. Payables turnover:
- The payables turnover ratio has fluctuated over the years, with a high of 6.62 in 2020 and a low of 4.71 in 2019. A higher turnover ratio indicates that the company is paying its suppliers faster, which could impact cash flow and relationships with suppliers.
4. Working capital turnover:
- Corning's working capital turnover has shown variability, with a peak of 6.23 in 2022 and a low of 2.67 in 2020. This ratio reflects how efficiently the company is using its working capital to generate revenue. A higher turnover ratio indicates that the company is efficiently managing its working capital to support its operating activities.
Overall, the activity ratios suggest that Corning, Inc. has been fairly efficient in managing its inventory, receivables, payables, and working capital over the years. The increasing receivables turnover and relatively stable inventory turnover ratios are positive indicators of effective operations. However, the fluctuating payables turnover ratio may warrant further investigation into the company's cash management practices and supplier relationships.
Average number of days
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 112.40 | 109.47 | 100.41 | 116.52 | 113.39 |
| Days of sales outstanding (DSO) | days | 45.58 | 44.27 | 51.94 | 68.88 | 58.26 |
| Number of days of payables | days | 61.81 | 68.00 | 65.24 | 55.14 | 77.56 |
Activity ratios help analyze how efficiently a company manages its assets and liabilities. Looking at Corning, Inc.'s activity ratios over the past five years, we can see the following trends:
1. Days of Inventory on Hand (DOH): This ratio measures how long it takes for the company to sell its inventory. Corning's DOH has been fluctuating over the years, ranging from 100.41 days in 2021 to 114.50 days in 2020. The increase in 2020 may indicate slower inventory turnover, while the decrease in 2021 suggests improved inventory management.
2. Days of Sales Outstanding (DSO): DSO reflects how long it takes for the company to collect on its sales. Corning's DSO has generally decreased over the years, from 68.88 days in 2020 to 45.58 days in 2023. This trend indicates that Corning has been able to collect payments from customers more quickly, which is a positive sign of efficient accounts receivable management.
3. Number of Days of Payables: This ratio shows how long it takes for the company to pay its suppliers. Corning's days of payables have varied over the years, with a noticeable decrease from 77.56 days in 2019 to 55.14 days in 2020. A decrease in this ratio implies that the company is paying its suppliers more quickly, which could indicate improved supplier relationships or negotiation terms.
Overall, the analysis of Corning, Inc.'s activity ratios suggests that the company has made progress in managing its inventory, collecting receivables more efficiently, and potentially optimizing its payables. These improvements indicate a positive trend in the company's operational efficiency and financial performance.
See also:
Corning Incorporated Short-term (Operating) Activity Ratios
Long-term
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Fixed asset turnover | 0.86 | 0.92 | 0.89 | 0.72 | 0.75 |
| Total asset turnover | 0.44 | 0.48 | 0.47 | 0.37 | 0.40 |
The fixed asset turnover ratio for Corning, Inc. has fluctuated over the past five years, ranging from 0.72 in 2020 to 0.92 in 2022. This ratio measures how efficiently the company is utilizing its fixed assets to generate sales revenue. A higher fixed asset turnover ratio indicates better utilization of fixed assets.
On the other hand, the total asset turnover ratio, which reflects the company's ability to generate sales from its total assets, has also varied over the same period. It has ranged from 0.37 in 2020 to 0.48 in 2022. A higher total asset turnover ratio suggests a more efficient use of all assets to generate revenue.
In general, both the fixed asset turnover and total asset turnover ratios for Corning, Inc. have shown some improvement over the years, indicating an overall increase in efficiency in utilizing its assets to generate revenue. However, the company may still have room for further enhancement in asset utilization to increase its financial performance.