Gates Industrial Corporation plc (GTES)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Inventory turnover | 3.42 | 3.51 | 3.13 | 3.46 | 4.09 |
| Receivables turnover | 4.47 | 4.33 | 4.78 | 3.86 | 4.31 |
| Payables turnover | 4.83 | 4.91 | 4.21 | 4.21 | 5.19 |
| Working capital turnover | 2.20 | 2.33 | 2.44 | 2.37 | 2.37 |
- Inventory Turnover: Gates Industrial Corporation plc's inventory turnover has been relatively stable over the past five years, ranging from 3.13 to 4.09 times. This indicates that the company is efficient in managing its inventory levels and turning over its inventory into sales. A slight decrease in 2021 was followed by a recovery in 2022 and 2023.
- Receivables Turnover: The company's receivables turnover has also been consistent over the years, ranging from 3.86 to 4.78 times. This indicates that Gates Industrial Corporation plc efficiently collects its accounts receivable, with higher ratios indicating a quicker collection process. The peak in 2021 was followed by a slight decrease in 2022 and a recovery in 2023.
- Payables Turnover: Gates Industrial Corporation plc's payables turnover has fluctuated over the years, ranging from 4.21 to 5.19 times. A higher turnover ratio reflects a shorter time taken by the company to pay off its suppliers. The company maintained a stable performance in this aspect with minor fluctuations in the turnover ratio.
- Working Capital Turnover: The working capital turnover ratio for Gates Industrial Corporation plc has shown stability over the years, ranging from 2.20 to 2.44 times. This ratio indicates how efficiently the company is utilizing its working capital to generate sales revenue. The consistent turnover ratios reflect a steady performance in utilizing working capital effectively to support the company's operations.
Overall, the activity ratios of Gates Industrial Corporation plc suggest efficient management of inventory, receivables, payables, and working capital, contributing to the company's operational effectiveness and financial performance.
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 | 106.83 | 103.97 | 116.69 | 105.50 | 89.18 |
| Days of sales outstanding (DSO) | days | 81.65 | 84.37 | 76.40 | 94.56 | 84.75 |
| Number of days of payables | days | 75.55 | 74.41 | 86.60 | 86.65 | 70.33 |
Days of inventory on hand (DOH) for Gates Industrial Corporation plc have shown fluctuating trends over the past five years, ranging from 89.18 days in 2019 to 116.69 days in 2021. The increase in 2021 indicates a longer period that inventory is held before being sold, which may imply potential liquidity issues or inefficiencies in managing inventory levels. However, the ratio decreased in 2022 and further in 2023, suggesting improved inventory management efficiency in recent years.
Days of sales outstanding (DSO) have also varied, with the highest ratio observed in 2020 at 94.56 days and the lowest in 2021 at 76.40 days. A lower DSO indicates quicker collection of receivables, which can improve cash flow and liquidity. Gates Industrial Corporation plc has generally maintained DSO within a reasonable range over the past five years, reflecting effective credit management practices.
The number of days of payables for Gates Industrial Corporation plc has ranged from 70.33 days in 2019 to 86.65 days in 2020. A higher number of days of payables indicates the company takes longer to pay its suppliers, which can be beneficial in managing cash flow. However, a significant increase in payables days from 2020 to 2021 may suggest potential strain on supplier relationships or cash flow constraints during that period.
Overall, Gates Industrial Corporation plc has exhibited varying trends in activity ratios over the past five years, with fluctuations in inventory management, accounts receivable collection, and accounts payable practices. It is important for the company to continuously monitor and improve these ratios to optimize working capital management and overall financial performance.
Long-term
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Fixed asset turnover | 5.69 | 5.61 | 5.22 | 3.98 | 4.26 |
| Total asset turnover | 0.49 | 0.49 | 0.46 | 0.38 | 0.42 |
The long-term activity ratios of Gates Industrial Corporation plc indicate the company's efficiency in utilizing its assets to generate sales over the past five years.
The fixed asset turnover ratio has shown a generally increasing trend from 2019 to 2023, reaching a high of 5.69 in 2023. This suggests that the company has been able to generate more revenue from its fixed assets over the years, indicating improved efficiency in utilizing its property, plant, and equipment to generate sales.
On the other hand, the total asset turnover ratio has been relatively stable over the same period, hovering around the range of 0.38 to 0.49. This indicates that the company has been able to generate consistent levels of revenue relative to its total assets.
Overall, the fixed asset turnover ratio reflects the effectiveness of Gates Industrial Corporation plc in utilizing its fixed assets to generate sales, while the total asset turnover ratio provides insight into the company's overall efficiency in generating revenue from all its assets. The increasing trend in fixed asset turnover suggests improving asset utilization efficiency, which could be a positive indicator of operational performance.