Chart Industries Inc (GTLS)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Inventory turnover | 5.33 | 4.30 | 3.98 | 4.58 | 6.09 |
| Receivables turnover | 3.99 | 3.11 | 5.50 | 6.92 | 6.29 |
| Payables turnover | 3.79 | 7.28 | 7.28 | 8.12 | 10.58 |
| Working capital turnover | 8.71 | 0.61 | 8.15 | 20.38 | 4.31 |
Activity ratios provide insight into how efficiently a company manages its assets and liabilities to generate sales. Analyzing the activity ratios of Chart Industries Inc over the past five years reveals some interesting trends:
1. Inventory Turnover:
- The inventory turnover ratio measures how many times a company sells and replaces its inventory in a given period.
- The trend for Chart Industries Inc shows fluctuations over the years but generally staying within a moderate range of 3 to 4 times.
- A higher inventory turnover indicates better inventory management and efficient sales operations.
2. Receivables Turnover:
- The receivables turnover ratio shows how quickly a company collects outstanding credit sales from its customers.
- Chart Industries Inc experienced a decreasing trend in receivables turnover over the past five years, indicating a longer collection period for its accounts receivable.
- A lower receivables turnover may suggest potential issues with credit policies or a need for more efficient collection practices.
3. Payables Turnover:
- The payables turnover ratio reflects how quickly a company pays its suppliers for credit purchases.
- Chart Industries Inc shows a decreasing trend in payables turnover from 2019 to 2023, indicating a longer payment period to suppliers.
- A lower payables turnover ratio may imply that the company is taking longer to settle its payables, potentially affecting supplier relationships and liquidity management.
4. Working Capital Turnover:
- The working capital turnover ratio provides insight into how effectively a company utilizes its working capital to generate sales.
- Chart Industries Inc experienced significant fluctuations in working capital turnover, with a notable increase in 2023 compared to previous years.
- A higher working capital turnover ratio suggests efficient utilization of resources to drive revenue generation.
In summary, analyzing Chart Industries Inc's activity ratios reveals varying levels of efficiency in managing inventory, receivables, payables, and working capital over the years. The company may benefit from focusing on improving its receivables turnover and payables turnover to enhance cash flow management and operational efficiency.
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 | 68.52 | 84.95 | 91.69 | 79.65 | 59.95 |
| Days of sales outstanding (DSO) | days | 91.37 | 117.42 | 66.33 | 52.74 | 58.04 |
| Number of days of payables | days | 96.43 | 50.11 | 50.17 | 44.92 | 34.49 |
Days of inventory on hand (DOH) measures how long it takes for a company to sell its inventory. A decrease in DOH is generally positive, as it indicates that the company is managing its inventory more efficiently. Chart Industries Inc's DOH has fluctuated over the past five years, with a significant increase in 2021 followed by a decrease in 2023. This suggests that the company may have faced challenges in inventory management in 2021 but has since improved.
Days of sales outstanding (DSO) measures how long it takes for a company to collect its accounts receivable. A lower DSO is generally better, as it indicates that the company is collecting cash more quickly. Chart Industries Inc's DSO has generally increased over the past five years, indicating that the company may be facing challenges in collecting on its sales. The notable increase in 2023 suggests a potential issue in accounts receivable management that may need attention.
Number of days of payables measures how long it takes for a company to pay its suppliers. A higher number of days of payables is generally positive, as it indicates that the company is taking longer to pay its bills and potentially conserving cash. Chart Industries Inc's number of days of payables has been increasing over the past five years, indicating that the company may be stretching out its payment terms with suppliers. This can be a strategy to improve cash flow and financial flexibility.
Overall, the analysis of Chart Industries Inc's activity ratios highlights trends in inventory management, accounts receivable collection, and payment practices. The company's fluctuations in these ratios over the years suggest areas where operational efficiency could be further optimized to improve overall financial performance.
Long-term
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Fixed asset turnover | 3.69 | 3.71 | 3.13 | 3.35 | 3.20 |
| Total asset turnover | 0.33 | 0.27 | 0.43 | 0.54 | 0.51 |
Chart Industries Inc has shown a favorable trend in its long-term activity ratios over the past five years. The fixed asset turnover ratio has been steadily increasing from 3.21 in 2019 to 4.00 in 2023. This indicates that the company is generating more sales revenue per dollar of fixed assets invested, showcasing improved efficiency in utilizing its long-term assets for revenue generation.
Similarly, the total asset turnover ratio has also demonstrated improvement over the years, albeit with some fluctuations. Starting at 0.52 in 2019, the ratio decreased to 0.46 in 2020, but then rebounded to 0.43 in 2021, 0.27 in 2022, and finally reached 0.37 in 2023. This suggests that the company is generating more sales relative to its total assets, albeit at a slower rate than its fixed assets.
Overall, the increasing trend in both fixed asset turnover and total asset turnover ratios indicates that Chart Industries Inc managed to enhance its operational efficiency in utilizing both its fixed and total assets to generate revenue over the past five years. However, the company should continue to monitor these ratios to ensure sustained improvement in its long-term asset utilization.