Haemonetics Corporation (HAE)

Short-term

Turnover ratios

The activity ratios of Haemonetics Corporation show how efficiently the company is managing its assets and liabilities to generate revenue and optimize cash flow.

1. Inventory turnover indicates the number of times inventory is sold and replaced within a given period. Haemonetics' inventory turnover has fluctuated over the past five years, with higher turnovers indicative of better inventory management. The recent figure of 3.71 suggests that the company is efficiently selling its inventory compared to previous years.

2. Receivables turnover measures how many times the company collects its accounts receivable during a period. Haemonetics' receivables turnover has been relatively stable over the years, showing consistent effectiveness in collecting payments from customers. The high turnover ratio of 12.56 in 2024 indicates that the company is efficient in converting credit sales into cash.

3. Payables turnover reflects the speed at which the company pays its suppliers. Haemonetics' payables turnover has remained fairly consistent, indicating the company's ability to manage its payables effectively. The ratio of 16.02 in 2024 suggests that the company is able to quickly settle its accounts payable obligations.

4. Working capital turnover measures how effectively the company is using its working capital to generate sales. A higher turnover ratio indicates efficient use of working capital. Haemonetics' working capital turnover has been steadily increasing over the years, with the figure of 5.54 in 2024 showing a strong ability to generate sales relative to its working capital.

Overall, Haemonetics Corporation appears to be efficiently managing its inventory, receivables, payables, and working capital, which is essential for sustaining operations and maximizing profitability. Tracking these activity ratios over time can provide insights into the company's operational efficiency and financial performance.

---

Average number of days

The activity ratios of Haemonetics Corporation show the efficiency of the company's operations in managing its inventory, accounts receivable, and accounts payable.

1. Days of Inventory on Hand (DOH):
- There has been a fluctuation in the days of inventory on hand over the past five years, with a peak in 2021 and a decrease in 2022. This ratio indicates the number of days it takes for the company to sell its inventory. A decrease in DOH from 137.80 days in 2021 to 98.50 days in 2024 suggests an improvement in inventory management efficiency.

2. Days of Sales Outstanding (DSO):
- The days of sales outstanding have shown some variability, with a decrease from 62.03 days in 2020 to 29.06 days in 2024. This ratio reflects the average number of days it takes for the company to collect its accounts receivable. A lower DSO indicates that the company is collecting its receivables more quickly.

3. Number of Days of Payables:
- The number of days of payables has remained relatively stable over the past five years, ranging from 18.97 days in 2020 to 22.78 days in 2024. This ratio represents the average number of days it takes for the company to pay its suppliers. A longer payment period can indicate favorable terms with suppliers.

In conclusion, Haemonetics Corporation has shown improvements in managing its inventory and accounts receivable efficiently over the years. The stability in the number of days of payables suggests consistent management of payables. These trends indicate a positive performance in the company's operational efficiency and cash flow management.

---

Long-term

Haemonetics Corporation's long-term activity ratios indicate the company's efficiency in managing its fixed assets and total assets to generate revenue over the past five years. The fixed asset turnover has shown a positive trend, increasing from 3.84 in 2020 to 8.33 in 2024, indicating that the company has become more effective in utilizing its fixed assets to generate sales. This improvement suggests that Haemonetics has been able to increase its revenue relative to its investment in fixed assets.

In contrast, the total asset turnover has fluctuated over the same period, with a notable improvement in 2022 and 2023 followed by a slight decline in 2024. Although the ratio has generally increased from 0.47 in 2021 to 1.18 in 2024, it is still relatively low compared to the fixed asset turnover ratio. This indicates that the company may have excessive investment in total assets compared to the level of sales generated.

Overall, the increase in fixed asset turnover suggests that Haemonetics has been successful in improving the utilization of its fixed assets, potentially through increased production efficiency or better asset management practices. However, the fluctuation in total asset turnover indicates potential inefficiencies in the utilization of total assets, which could be further explored to optimize the company's asset management strategies.