ICU Medical Inc (ICUI)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Inventory turnover | 2.14 | 2.27 | 2.84 | 2.57 | 2.35 |
| Receivables turnover | 13.98 | 10.28 | 12.43 | 10.24 | 6.26 |
| Payables turnover | 10.13 | 7.33 | 10.17 | 11.26 | 6.18 |
| Working capital turnover | 3.06 | 3.08 | 1.59 | 1.75 | 2.00 |
Inventory turnover measures how many times a company's inventory is sold and replaced during a period. ICU Medical's inventory turnover has shown a slight fluctuation over the past five years, ranging from 2.14 in 2023 to 2.84 in 2021. This indicates that the company's inventory is turning over approximately two to three times a year.
Receivables turnover reflects how efficiently a company collects cash from its customers. ICU Medical's receivables turnover has been steadily increasing, reaching 13.75 in 2023 from 6.13 in 2019. This improvement suggests that the company is managing its accounts receivable more effectively.
Payables turnover measures how quickly a company pays its suppliers. ICU Medical's payables turnover has exhibited variability, with values ranging from 6.18 in 2019 to 11.26 in 2020. In 2023, the payables turnover was 10.13, indicating that the company is paying its suppliers approximately 10 times a year.
Working capital turnover assesses how efficiently a company utilizes its working capital to generate sales. ICU Medical's working capital turnover has shown fluctuations, with the highest value of 3.08 in 2022 and the lowest of 1.59 in 2021. In 2023, the working capital turnover was 3.06, suggesting that the company generated approximately $3.06 in revenue for every dollar of working capital invested.
Overall, ICU Medical's activity ratios reflect varying degrees of efficiency in managing inventory, receivables, payables, and working capital over the years, indicating opportunities for further optimization in these areas to enhance operational performance.
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 | 170.42 | 160.56 | 128.44 | 142.00 | 155.15 |
| Days of sales outstanding (DSO) | days | 26.10 | 35.49 | 29.36 | 35.64 | 58.29 |
| Number of days of payables | days | 36.04 | 49.81 | 35.90 | 32.40 | 59.10 |
The activity ratios for ICU Medical, Inc. provide insights into the management of the company's inventory, receivables, and payables over the last five years.
1. Days of Inventory on Hand (DOH):
- The trend in DOH shows an increase from 2019 to 2021, indicating a longer time it takes for the company to sell its inventory. However, in 2023, there was a notable increase in efficiency as DOH decreased to 170.42 days.
- The rise in DOH could be a cause for concern as it may suggest excessive inventory levels or slower turnover, tying up capital and increasing holding costs.
2. Days of Sales Outstanding (DSO):
- DSO measures how long it takes for the company to collect payments from its customers. A lower DSO is preferable as it indicates a faster collection of receivables.
- ICU Medical showed improvement in DSO from 2019 to 2021, with a notable decrease in 2021, suggesting improved efficiency in collecting payments from customers.
3. Number of Days of Payables:
- The number of days of payables measures how long it takes the company to pay its trade payables. A higher number suggests that the company is taking longer to settle its payables.
- ICU Medical's number of days of payables has fluctuated over the years, with a decrease in 2020 and 2021 indicating faster payment of trade payables. However, in 2023, the number of days of payables increased to 36.04 days.
Overall, ICU Medical has shown mixed performance in managing its activity ratios. While there have been improvements in DSO and payables management, the increase in DOH in 2023 may require further scrutiny to optimize inventory turnover and working capital efficiency.
Long-term
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Fixed asset turnover | 3.69 | 3.58 | 2.81 | 2.72 | 2.78 |
| Total asset turnover | 0.52 | 0.50 | 0.70 | 0.72 | 0.75 |
The fixed asset turnover ratio for ICU Medical, Inc. has shown a positive trend over the past five years, increasing from 2.78 in 2019 to 3.69 in 2023. This indicates that the company has been able to generate more revenue from its fixed assets, such as property, plant, and equipment, over time.
On the other hand, the total asset turnover ratio has experienced fluctuations during the same period, decreasing from 0.75 in 2019 to 0.52 in 2023. This implies that the company's ability to generate sales from all its assets, including fixed and current assets, has slightly decreased over time.
Overall, the increasing trend in fixed asset turnover suggests that ICU Medical, Inc. is becoming more efficient in utilizing its fixed assets to generate revenue. However, the fluctuating total asset turnover ratio may indicate changes in the company's asset structure or operational efficiency that need closer examination to ensure sustainable growth and profitability.