Henry Schein Inc (HSIC)
Activity ratios
Short-term
Turnover ratios
Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
---|---|---|---|---|---|
Inventory turnover | 6.66 | 6.47 | 6.09 | 6.28 | 6.42 |
Receivables turnover | 8.55 | 6.58 | 8.74 | 8.53 | 7.07 |
Payables turnover | 12.53 | 11.50 | 11.91 | 11.09 | 9.65 |
Working capital turnover | 10.74 | 6.79 | 7.14 | 8.06 | 6.68 |
Henry Schein Inc's inventory turnover has been relatively stable over the past five years, ranging from 6.09 to 6.66 times. This indicates that the company efficiently manages its inventory levels, with products being sold and replenished at a consistent rate.
The receivables turnover ratio shows an increasing trend from 7.07 in 2020 to 8.55 in 2024. This suggests that Henry Schein is collecting its accounts receivable more quickly, which is a positive indicator of effective credit policies and strong customer payment processes.
On the other hand, the payables turnover ratio has also increased steadily from 9.65 in 2020 to 12.53 in 2024. This shows that the company is taking longer to pay its suppliers, which could indicate improved cash management or better negotiation terms with vendors.
The working capital turnover ratio has fluctuated over the years, but showed a significant increase in 2024 to 10.74 times. This implies that Henry Schein is effectively utilizing its working capital to generate revenue, potentially through increased sales or more efficient operations.
In conclusion, Henry Schein Inc's activity ratios suggest efficient management of inventory, receivables, payables, and working capital, which are all key components of the company's operational efficiency and financial health.
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 | 54.82 | 56.46 | 59.94 | 58.10 | 56.87 |
Days of sales outstanding (DSO) | days | 42.68 | 55.50 | 41.76 | 42.79 | 51.59 |
Number of days of payables | days | 29.13 | 31.73 | 30.66 | 32.91 | 37.81 |
Based on the provided data, let's analyze Henry Schein Inc's activity ratios over the five-year period:
1. Days of Inventory on Hand (DOH):
- The company's DOH has shown a fluctuating trend over the years, ranging from 56.87 days in 2020 to 54.82 days in 2024.
- A higher number of days indicates that inventory is moving slower or there is excess inventory on hand.
- Henry Schein Inc should aim to manage its inventory efficiently to avoid tying up capital in excess inventory.
2. Days of Sales Outstanding (DSO):
- The DSO metric reflects the average number of days it takes for the company to collect its accounts receivable.
- Henry Schein Inc has shown improvements in this ratio, with DSO decreasing from 51.59 days in 2020 to 42.68 days in 2024.
- A lower DSO indicates that the company is collecting its receivables more quickly, which is a positive sign of efficient credit and collection management.
3. Number of Days of Payables:
- This ratio measures how quickly a company pays its suppliers.
- Henry Schein Inc has consistently reduced its number of days of payables from 37.81 days in 2020 to 29.13 days in 2024.
- A lower number of days of payables may suggest that the company is managing its payables more efficiently, but it could also indicate a strain on supplier relationships if the payment terms are too aggressive.
Overall, Henry Schein Inc has shown improvements in its Days of Sales Outstanding and Days of Payables ratios, which can be interpreted as positive signs of effective working capital management. However, the company should continue to monitor its inventory levels to ensure optimal efficiency and cost control.
Long-term
Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
---|---|---|---|---|---|
Fixed asset turnover | 10.61 | 10.55 | 13.32 | 33.79 | 29.47 |
Total asset turnover | 1.24 | 1.16 | 1.46 | 1.46 | 1.30 |
Henry Schein Inc's fixed asset turnover ratio has shown a general decreasing trend over the past few years, indicating that the company is generating less revenue relative to its investment in fixed assets. The ratio decreased from 29.47 in 2020 to 10.61 in 2024.
On the other hand, the total asset turnover ratio has been more volatile but relatively stable overall. While there was an increase from 1.30 in 2020 to 1.46 in 2021 and 2022, the ratio then decreased to 1.16 in 2023 before slightly recovering to 1.24 in 2024.
This suggests that, despite the decline in fixed asset turnover, Henry Schein Inc is still effectively utilizing its total assets to generate revenue, although there may be room for improvement in its efficiency in utilizing fixed assets specifically.