Hillenbrand Inc (HI)

Short-term

Turnover ratios

Hillenbrand Inc's activity ratios provide insight into its operational efficiency and management of working capital. The inventory turnover ratio has decreased from 6.71 in 2019 to 3.17 in 2023, indicating a decline in the rate at which inventory is being sold. This could signify challenges in managing inventory levels or changes in demand for the company's products.

Conversely, the receivables turnover ratio has shown a fluctuating pattern, with a peak of 6.43 in 2021 and a low of 4.29 in 2023. This suggests variations in the efficiency of collecting outstanding receivables. The payables turnover ratio has also exhibited fluctuations, indicating changes in the company's payment policies and relationships with suppliers.

Moreover, Hillenbrand's working capital turnover has displayed an increasing trend, rising from 4.17 in 2019 to 8.93 in 2023. This indicates that the company is generating more revenue per unit of working capital invested, reflecting improved operational efficiency.

Overall, the analysis of Hillenbrand Inc's activity ratios highlights areas of strength and potential challenges in its management of inventory, receivables, payables, and working capital efficiency over the last five years.

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Average number of days

Based on the provided data, Hillenbrand Inc's activity ratios show the following trends:

Days of Inventory on Hand (DOH):
The DOH has been increasing steadily over the years, indicating that the company is holding inventory for a longer period. This could be a signal of inefficiency or challenges in managing inventory levels.

Days of Sales Outstanding (DSO):
The DSO has varied over the years, with a general trend of decrease from 2019 to 2021, followed by an increase in 2022 and 2023. This suggests that the collection period for receivables has been somewhat volatile, potentially impacting the company's cash flow and working capital management.

Number of Days of Payables:
The number of days of payables has shown fluctuations over the years but has generally trended upwards. This implies that the company is taking longer to pay its suppliers, potentially signaling stretching of payment terms or strained vendor relationships.

In summary, the activity ratios indicate that Hillenbrand Inc may be facing challenges in managing its inventory levels, collecting receivables, and optimizing its payables. These trends should be carefully monitored to assess their impact on the company's working capital and operational efficiency.

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Long-term

The long-term activity ratios of Hillenbrand Inc show the effectiveness of the company in utilizing its assets to generate sales over the years. The fixed asset turnover ratio has fluctuated, indicating a change in the efficiency of generating sales from fixed assets. In 2023, the ratio decreased to 8.81 from 10.47 in 2022, suggesting a decrease in the company's ability to generate sales from its fixed assets. However, it is still higher than it was in 2020, indicating an improved performance from two years ago.

Meanwhile, the total asset turnover ratio also shows a declining trend, reaching 0.51 in 2023 from 0.76 in 2022. This suggests a decrease in the company's ability to generate sales from its total assets. The declining trend may indicate a less efficient use of assets to generate sales, which could be a concern for the company's overall asset management and efficiency in generating revenue.

Overall, the long-term activity ratios for Hillenbrand Inc indicate fluctuations and a declining trend in the company's ability to generate sales from both fixed and total assets. Further analysis and consideration of the company's operational and investment strategies are recommended to understand the reasons behind these trends and to assess potential implications for future performance.