Honeywell International Inc (HON)

Activity ratios

Short-term

Turnover ratios

	Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Inventory turnover	120.99	3.72	4.30	4.55	4.94
Receivables turnover	—	—	—	—	—
Payables turnover	—	—	—	—	—
Working capital turnover	175.79	7.39	7.03	5.86	3.64

The activity ratios of Honeywell International Inc provide insight into the efficiency of the company in managing its working capital and operating assets.

1. Inventory Turnover:
- The inventory turnover ratio measures how effectively the company is selling its inventory. A higher ratio indicates faster inventory turnover.
- Over the years, Honeywell's inventory turnover has been declining, from 4.94 in 2020 to 3.72 in 2023, before experiencing a significant increase to 120.99 in 2024. This sudden spike in 2024 might be due to a change in accounting practices or business operations.

2. Receivables Turnover:
- The receivables turnover ratio shows how quickly the company collects its accounts receivable. A higher ratio signifies faster collection of receivables.
- The data provided shows that there is no information available for receivables turnover for the years 2020 to 2024. Without this data, it is challenging to assess how efficiently the company is managing its receivables.

3. Payables Turnover:
- Payables turnover ratio measures how quickly the company pays its suppliers. A higher ratio may indicate that the company is paying its payables more quickly.
- Similar to receivables turnover, there is no data available for payables turnover for the years 2020 to 2024. Lack of information on payables turnover hinders the analysis of the company's payment practices.

4. Working Capital Turnover:
- The working capital turnover ratio reflects how efficiently the company is using its working capital to generate sales. A higher ratio indicates better utilization of working capital.
- Honeywell's working capital turnover has shown a steady increase over the years, from 3.64 in 2020 to 175.79 in 2024. This demonstrates that the company has been effectively using its working capital to drive revenue growth and business operations.

Overall, while the inventory turnover and working capital turnover ratios provide insights into Honeywell's operational efficiency, the lack of data for receivables turnover and payables turnover limits a complete assessment of the company's overall activity management. Further information in these areas would enhance the understanding of Honeywell's performance in managing its operating assets and working capital.

Average number of days

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Days of inventory on hand (DOH)	days	3.02	98.06	84.84	80.16	73.91
Days of sales outstanding (DSO)	days	—	—	—	—	—
Number of days of payables	days	—	—	—	—	—

Based on the provided data, we can analyze the activity ratios of Honeywell International Inc as follows:

1. Days of Inventory on Hand (DOH): This ratio gives an indication of how efficiently Honeywell manages its inventory. The trend shows an increase in the number of days inventory is held over the years, from 73.91 days on December 31, 2020, to 98.06 days on December 31, 2023, before a significant decrease to 3.02 days on December 31, 2024. A higher DOH may suggest slower inventory turnover and could tie up capital.

2. Days of Sales Outstanding (DSO): Unfortunately, the data provided does not include information on DSO for Honeywell. DSO measures the average number of days it takes for a company to collect revenue after a sale has been made. Typically, a lower DSO indicates faster collection of receivables and better liquidity.

3. Number of Days of Payables: Similarly, the data does not include information on the number of days of payables for Honeywell. This ratio looks at how long it takes a company to pay its creditors. A higher number of days of payables could indicate that the company is taking longer to pay its suppliers, potentially improving its working capital position.

In conclusion, based on the provided information, we can see fluctuations in Honeywell International Inc's inventory management efficiency over the years. Monitoring and analyzing these activity ratios can help assess the company's operational effectiveness and financial health.

Long-term

	Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Fixed asset turnover	—	—	6.48	6.18	5.86
Total asset turnover	28.20	0.60	0.57	0.53	0.51

The Fixed Asset Turnover ratio measures the efficiency of Honeywell International Inc in generating sales revenue from its investment in fixed assets. Over the years, the company has shown an increasing trend in this ratio, from 5.86 in 2020 to 6.18 in 2021 and further to 6.48 in 2022. A higher fixed asset turnover ratio indicates that the company is effectively utilizing its fixed assets to generate sales.

On the other hand, the Total Asset Turnover ratio reflects the company's ability to generate sales from its total assets. In this case, Honeywell International Inc has also shown an increasing trend in this ratio, from 0.51 in 2020 to 0.53 in 2021, 0.57 in 2022, and 0.60 in 2023. However, the significant jump to 28.20 in 2024 may indicate a data anomaly or a significant event that drastically impacted the company's asset turnover efficiency.

Overall, the increasing trends in both the Fixed Asset Turnover and Total Asset Turnover ratios suggest that Honeywell International Inc is effectively utilizing its assets to generate sales revenue, which is a positive indication of operational efficiency and asset utilization.