Henry Schein Inc (HSIC)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Inventory turnover | 6.47 | 6.09 | 6.28 | 6.42 | 6.57 |
| Receivables turnover | 6.58 | 8.74 | 8.53 | 7.07 | 8.17 |
| Payables turnover | 11.50 | 11.91 | 11.09 | 9.65 | 10.67 |
| Working capital turnover | 6.79 | 7.14 | 8.06 | 6.68 | 8.57 |
Inventory turnover measures how efficiently a company manages its inventory levels, with a higher ratio indicating that inventory is being sold or used more frequently. Henry Schein Inc's inventory turnover has fluctuated over the years but remains within a relatively consistent range, suggesting stable inventory management.
Receivables turnover reflects how quickly a company collects outstanding receivables from its customers. A higher ratio indicates that receivables are being collected more efficiently. Henry Schein Inc's receivables turnover has varied considerably, with a significant decrease in 2023 compared to the previous year.
Payables turnover measures how quickly a company pays its suppliers, with a higher ratio indicating faster payment. Henry Schein Inc's payables turnover has been relatively stable over the years, with a slight decrease in 2023 compared to the prior year.
Working capital turnover indicates how effectively a company utilizes its working capital to generate revenue. A higher ratio suggests efficient utilization of working capital. Henry Schein Inc's working capital turnover has also fluctuated over the years, with a noticeable decrease in 2023 compared to the preceding year.
Overall, the activity ratios of Henry Schein Inc show a mixed performance in managing inventory, receivables, payables, and working capital turnover. Further analysis and comparison with industry benchmarks may provide additional insights into the company's operational efficiency and effectiveness.
Average number of days
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 56.46 | 59.94 | 58.10 | 56.87 | 55.54 |
| Days of sales outstanding (DSO) | days | 55.50 | 41.76 | 42.79 | 51.59 | 44.66 |
| Number of days of payables | days | 31.73 | 30.66 | 32.91 | 37.81 | 34.22 |
Days of inventory on hand (DOH) measures how many days, on average, a company holds its inventory before selling it. A lower DOH indicates a more efficient management of inventory. Henry Schein Inc's DOH has fluctuated over the years, with a decrease from 59.94 days in 2022 to 56.46 days in 2023, suggesting an improvement in inventory management efficiency.
Days of sales outstanding (DSO) reflects the average number of days it takes for a company to collect payment after making a sale. A lower DSO is favorable as it indicates faster cash conversion from sales. Henry Schein Inc's DSO has varied over the years, with a notable increase from 2022 to 2023 (41.76 days to 55.50 days), indicating a potential delay in collecting payments from customers.
Number of days of payables shows the average number of days it takes for a company to pay its suppliers. A higher number of days indicates that the company may be taking longer to settle its payables, which can be advantageous for cash flow management. In the case of Henry Schein Inc, the number of days of payables has been relatively stable over the years, with a minor increase from 30.66 days in 2022 to 31.73 days in 2023.
Overall, Henry Schein Inc's activity ratios reflect some fluctuations in inventory management and accounts receivable collection efficiency, with a stable trend in payables management. Continued monitoring and potential improvements in these areas could enhance the company's operational effectiveness and cash flow management.
Long-term
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Fixed asset turnover | 10.55 | 13.32 | 33.79 | 29.47 | 30.90 |
| Total asset turnover | 1.16 | 1.46 | 1.46 | 1.30 | 1.42 |
The Fixed Asset Turnover ratio for Henry Schein Inc has exhibited a declining trend over the past five years, indicating a decrease in the efficiency of generating sales revenue from its investment in fixed assets. In particular, the ratio decreased from 30.90 in 2019 to 10.55 in 2023, suggesting a significant reduction in the utilization of fixed assets to generate sales.
On the other hand, the Total Asset Turnover ratio has been relatively stable over the same period, fluctuating within a narrow range between 1.16 and 1.46. This indicates that the company has been able to efficiently utilize its total assets to generate sales revenue.
Overall, the different trends observed in the Fixed Asset Turnover and Total Asset Turnover ratios suggest that while the company's overall asset utilization efficiency has been maintained, there may be specific challenges or changes in the management of fixed assets that have impacted the generation of sales revenue from this asset category. It would be advisable for Henry Schein Inc to further analyze and address the declining trend in the Fixed Asset Turnover ratio to ensure optimal utilization of its fixed assets in generating sales.