Garmin Ltd (GRMN)

Activity ratios

Short-term

Turnover ratios

Dec 31, 2023 Sep 30, 2023 Jun 30, 2023 Mar 31, 2023 Dec 31, 2022 Sep 30, 2022 Jun 30, 2022 Mar 31, 2022 Dec 31, 2021 Sep 30, 2021 Jun 30, 2021 Mar 31, 2021 Dec 31, 2020 Sep 30, 2020 Jun 30, 2020 Mar 31, 2020 Dec 31, 2019 Sep 30, 2019 Jun 30, 2019 Mar 31, 2019
Inventory turnover 2.14 1.95 1.94 1.79 1.89 1.75 1.84 2.01 2.10 2.44 2.81 2.88 3.03 2.66 2.57 2.67 2.75 2.63 2.97 3.19
Receivables turnover 6.44 7.07 6.89 — 7.38 7.63 7.09 8.43 5.87 7.68 6.58 7.88 4.92 5.97 7.12 7.64 5.30 6.41 5.93 7.50
Payables turnover 11.37 10.47 10.70 12.71 13.46 9.99 8.39 9.00 6.97 8.51 8.68 9.62 8.92 9.27 10.83 10.55 8.59 8.37 8.96 11.19
Working capital turnover 1.66 1.80 1.86 1.63 1.77 1.94 1.98 1.73 1.76 1.86 2.00 1.68 1.67 1.77 1.78 1.78 1.85 2.09 2.42 1.80

Garmin Ltd's activity ratios show the efficiency of the company in managing its assets and operations. The inventory turnover ratio has been fluctuating over the periods but generally indicates how many times the company's inventory was sold and replaced during the period. A decreasing trend in inventory turnover may suggest slower sales or excess inventory levels.

The receivables turnover ratio reflects how many times receivables are collected during a period. Garmin Ltd's receivables turnover has varied, indicating changes in the efficiency of collecting receivables. A higher turnover suggests a faster collection process, thereby improving cash flow.

The payables turnover ratio reveals how efficiently the company pays its suppliers. Garmin Ltd's payables turnover fluctuates, showing variations in how quickly the company settles its obligations. A higher turnover may indicate quicker payment cycles or strong negotiation power with suppliers.

The working capital turnover ratio measures how efficiently working capital is utilized to generate sales. Garmin Ltd's turnover ratios show variations, indicating changes in how effectively working capital is managed to support operations. A consistent or improving ratio may suggest effective utilization of resources to drive revenue growth.

In conclusion, Garmin Ltd's activity ratios reflect fluctuations in inventory management, receivables collection efficiency, payables management, and working capital utilization over the periods analyzed. Monitoring these ratios can provide insights into the company's operational efficiency and effectiveness in managing its resources.

Average number of days

Dec 31, 2023 Sep 30, 2023 Jun 30, 2023 Mar 31, 2023 Dec 31, 2022 Sep 30, 2022 Jun 30, 2022 Mar 31, 2022 Dec 31, 2021 Sep 30, 2021 Jun 30, 2021 Mar 31, 2021 Dec 31, 2020 Sep 30, 2020 Jun 30, 2020 Mar 31, 2020 Dec 31, 2019 Sep 30, 2019 Jun 30, 2019 Mar 31, 2019
Days of inventory on hand (DOH) days 170.30 187.22 188.43 203.43 193.35 208.58 197.98 181.70 173.79 149.81 129.88 126.79 120.40 137.31 141.90 136.46 132.87 138.81 122.96 114.51
Days of sales outstanding (DSO) days 56.71 51.65 52.95 — 49.43 47.84 51.46 43.27 62.17 47.51 55.44 46.30 74.20 61.12 51.29 47.75 68.82 56.95 61.55 48.65
Number of days of payables days 32.11 34.85 34.11 28.72 27.11 36.55 43.51 40.56 52.39 42.87 42.06 37.95 40.90 39.36 33.71 34.59 42.50 43.60 40.74 32.62

Days of inventory on hand (DOH) for Garmin Ltd have shown some fluctuations over the periods, ranging from a low of 114.51 days to a high of 208.58 days. Higher DOH values indicate a longer time it takes for the company to sell its inventory, which may suggest inefficient inventory management or slow-moving products.

Days of sales outstanding (DSO) have also varied, with a range from 43.27 days to 74.20 days. Lower DSO values are generally favorable as they indicate quicker collection of receivables, showing efficient credit and collection policies. However, in some periods, DSO has increased, indicating a longer time taken to collect cash from customers, which may impact cash flow.

The number of days of payables for Garmin Ltd has fluctuated as well, with a range from 27.11 days to 52.39 days. A higher number of days of payables means the company is taking longer to pay its suppliers, which can be advantageous for cash flow management but may strain supplier relationships if excessively prolonged.

Overall, these activity ratios provide insights into Garmin Ltd's management of inventory, receivables, and payables, highlighting areas that may require attention to optimize working capital efficiency and cash flow management.

Long-term

Dec 31, 2023 Sep 30, 2023 Jun 30, 2023 Mar 31, 2023 Dec 31, 2022 Sep 30, 2022 Jun 30, 2022 Mar 31, 2022 Dec 31, 2021 Sep 30, 2021 Jun 30, 2021 Mar 31, 2021 Dec 31, 2020 Sep 30, 2020 Jun 30, 2020 Mar 31, 2020 Dec 31, 2019 Sep 30, 2019 Jun 30, 2019 Mar 31, 2019
Fixed asset turnover 4.29 4.29 4.18 4.14 4.23 4.45 4.45 4.63 4.64 5.04 5.07 5.11 4.88 4.83 4.71 5.07 5.14 5.04 4.93 5.06
Total asset turnover 0.61 0.64 0.63 0.62 0.63 0.64 0.63 0.66 0.63 0.65 0.66 0.63 0.59 0.60 0.60 0.63 0.61 0.62 0.63 0.64

Garmin Ltd's fixed asset turnover ratio has been relatively stable over the past five quarters, ranging from 4.14 to 5.07. This indicates that the company generated between $4.14 and $5.07 in sales for every dollar invested in fixed assets during these periods. The consistency in this ratio suggests that Garmin is efficiently utilizing its fixed assets to generate revenue.

On the other hand, the total asset turnover ratio for Garmin has fluctuated between 0.59 and 0.66 over the same period. This ratio reflects the company's ability to generate sales from its total assets. While the total asset turnover ratio has shown some variability, it has generally remained around the 0.63 mark. This implies that Garmin is efficient in utilizing its total assets to generate revenue, although there has been some fluctuation in this efficiency over time.

Overall, Garmin's long-term activity ratios suggest that the company is effectively managing its assets to generate sales, with a relatively stable performance in fixed asset turnover and some variability in total asset turnover.