ICU Medical Inc (ICUI)

Short-term

Turnover ratios

The activity ratios provide insights into how efficiently ICU Medical, Inc. is managing its assets and liabilities.

1. Inventory turnover: ICU Medical's inventory turnover has been relatively stable over the quarters, ranging from 1.85 to 2.27. A higher turnover indicates that the company is selling its inventory quickly, which is generally desirable. However, the fluctuation in the turnover may signal variability in sales or inventory management.

2. Receivables turnover: The receivables turnover has shown a consistent increasing trend from Q1 2022 to Q4 2023, indicating that ICU Medical is collecting its accounts receivable more efficiently. A higher turnover ratio suggests that the company is effective in collecting payments from customers.

3. Payables turnover: The payables turnover has also been increasing steadily, from 4.94 in Q1 2022 to 10.13 in Q4 2023. This implies that the company is taking longer to pay its suppliers, which can indicate improved cash flow management. However, excessively delaying payments could strain supplier relationships.

4. Working capital turnover: The working capital turnover has shown a generally increasing trend over the quarters, indicating that ICU Medical is generating revenue more efficiently relative to its working capital. A higher turnover ratio suggests that the company is effectively utilizing its working capital to drive sales.

In summary, ICU Medical, Inc. has generally shown improvements in managing its inventory, receivables, payables, and working capital efficiently over the quarters. These trends indicate the company's efforts to optimize its asset and liability management for better operational performance.

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Average number of days

Days of inventory on hand (DOH) measures how many days a company holds inventory before selling it. A higher DOH value indicates that the company may be overstocked or facing difficulties in selling its inventory quickly, tying up capital in unsold goods.

For ICU Medical, Inc., the trend in DOH has been increasing over the past few quarters, indicating a potential inefficiency in managing inventory levels. The company held inventory for an average of 170.42 days in Q4 2023, compared to 160.56 days in Q4 2022.

Days of sales outstanding (DSO) reflects the average number of days it takes for a company to collect revenue after a sale is made. A lower DSO value typically indicates more efficient credit management and quicker cash collection.

ICU Medical, Inc. has shown a consistent improvement in DSO, with the number of days declining from 36.06 days in Q4 2022 to 26.55 days in Q4 2023. This trend suggests that the company has been more effective in collecting cash from customers in a timely manner.

Number of days of payables measures how long it takes a company to pay its suppliers. A longer number of days suggests the company is taking longer to settle its payables, potentially indicating cash flow or liquidity challenges.

ICU Medical, Inc. has been able to extend its payment period to suppliers, with the number of days of payables increasing from 49.81 days in Q4 2022 to 36.04 days in Q4 2023. This extension may help the company preserve cash and manage working capital effectively.

Overall, while ICU Medical, Inc. has shown improvements in DSO and days of payables, the increasing trend in days of inventory on hand warrants attention as it may indicate possible inefficiencies in managing inventory levels.

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Long-term

The long-term activity ratios of ICU Medical, Inc. provide insights into how efficiently the company is utilizing its assets to generate sales revenue.

1. Fixed Asset Turnover: This ratio indicates how effectively the company is using its fixed assets to generate sales. A higher ratio signifies that the company is using its fixed assets efficiently to generate revenue. ICU Medical's fixed asset turnover ratio has been relatively stable over the quarters, ranging from 2.29 to 3.72. The increasing trend from Q1 2022 to Q2 2023 indicates improvements in utilizing fixed assets to generate sales.

2. Total Asset Turnover: This ratio measures how efficiently the company is utilizing all its assets to generate sales. A higher total asset turnover ratio indicates better asset utilization. ICU Medical's total asset turnover ratio has also shown a consistent upward trend, ranging from 0.32 to 0.52 over the quarters. This suggests that the company is improving in generating sales relative to its total asset base.

Overall, both the fixed asset turnover and total asset turnover ratios of ICU Medical have been showing positive trends, indicating efficient asset utilization to drive sales growth. This trend suggests that the company is effectively managing its assets to generate revenue, which is a favorable indicator of operational efficiency and financial performance.