Haemonetics Corporation (HAE)

Short-term

Turnover ratios

Haemonetics Corporation's activity ratios provide insight into how efficiently the company is managing its resources.

1. Inventory Turnover: This ratio measures how many times the company's inventory is sold and replaced during a period. Haemonetics' inventory turnover has slightly increased over the years, from 1.46 in 2021 to 1.95 in 2024, indicating an improvement in inventory management efficiency.

2. Receivables Turnover: The receivables turnover ratio shows how efficiently the company is collecting its accounts receivable. Haemonetics' receivables turnover remained relatively stable over the years, ranging from 6.23 in 2022 to 6.52 in 2023, suggesting a consistent collection process.

3. Payables Turnover: This ratio measures how many times a company pays its suppliers during a period. Haemonetics' payables turnover decreased from 9.40 in 2021 to 8.42 in 2024, suggesting a longer time taken to pay suppliers, which could impact relationships with vendors.

4. Working Capital Turnover: The working capital turnover ratio compares net sales to working capital, showing how efficiently the company is utilizing its working capital to generate revenue. Haemonetics' working capital turnover fluctuated over the years, with a notable increase from 1.98 in 2021 to 3.17 in 2022, indicating improved efficiency in using working capital.

Overall, Haemonetics Corporation has shown varying levels of efficiency in managing its inventories, receivables, payables, and working capital over the years, with some ratios improving while others fluctuate. It is essential for the company to maintain a balance in these activity ratios to ensure sustainable and efficient operations.

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Average number of days

To analyze Haemonetics Corporation's activity ratios, we will focus on three key metrics: Days of Inventory on Hand (DOH), Days of Sales Outstanding (DSO), and Number of Days of Payables.

1. Days of Inventory on Hand (DOH):
- The trend in DOH shows a significant improvement from 249.15 days as of March 31, 2021, to 171.03 days as of March 31, 2023. This indicates that the company is managing its inventory more efficiently, possibly by reducing excess inventory levels or improving inventory turnover.

2. Days of Sales Outstanding (DSO):
- DSO increased slightly from 53.49 days as of March 31, 2021, to 57.59 days as of March 31, 2024. This suggests that the average time it takes for the company to collect its accounts receivable has increased over the period. However, the impact of this increase may be mitigated by other factors, such as changes in sales volume or customer credit policies.

3. Number of Days of Payables:
- The number of days of payables has seen a slight increase from 38.84 days as of March 31, 2021, to 43.36 days as of March 31, 2024. This metric indicates the average number of days the company takes to pay its suppliers. An increase in this metric may imply a change in payment terms or cash flow management strategies.

Overall, analyzing these activity ratios provides important insights into Haemonetics Corporation's operational efficiency and management of working capital. The improving trend in DOH reflects better inventory management, while the slight increase in DSO and payables days requires further investigation to understand the underlying reasons and their impact on the company's overall financial performance.

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Long-term

Haemonetics Corporation's fixed asset turnover has shown a positive trend over the years, increasing from 3.14 in 2021 to 3.84 in 2022 and then relatively stabilizing at 3.76 in 2023. This indicates that the company is generating more revenue relative to its investment in fixed assets, reflecting efficient utilization of its long-term assets to generate sales.

In terms of total asset turnover, Haemonetics Corporation has also displayed a steady increase in efficiency from 0.48 in 2021 to 0.53 in 2022, and then further improvement to 0.60 in both 2023 and 2024. This indicates that the company is generating more revenue for each dollar invested in total assets, demonstrating effective management of its overall asset base to drive sales.

Overall, the trend in both fixed asset turnover and total asset turnover ratios suggests that Haemonetics Corporation is effectively utilizing its long-term assets to generate sales and has been improving its overall asset efficiency over the years.