IDEXX Laboratories Inc (IDXX)

Short-term

Turnover ratios

The activity ratios of Idexx Laboratories, Inc. provide insights into the efficiency of the company's operations in managing its inventory, receivables, payables, and working capital over the years.

1. Inventory Turnover:
- The inventory turnover ratio indicates how many times a company's inventory is sold and replaced during a period.
- Idexx's inventory turnover has ranged from 3.71 to 5.41 over the past five years, with a slight upward trend in recent years.
- This suggests that the company is effectively managing its inventory levels, with a higher turnover generally indicating efficient inventory management.

2. Receivables Turnover:
- The receivables turnover ratio measures how efficiently a company collects outstanding receivables from customers.
- Idexx's receivables turnover has ranged from 7.50 to 8.94 over the last five years.
- The stable and relatively high turnover indicates that the company is efficient in collecting payments from customers, which is a positive sign for cash flow management.

3. Payables Turnover:
- The payables turnover ratio evaluates how quickly a company pays its suppliers.
- Idexx's payables turnover has fluctuated between 11.42 and 15.23 over the past five years.
- A higher turnover reflects that the company is managing its payables effectively, possibly negotiating favorable payment terms with suppliers.

4. Working Capital Turnover:
- The working capital turnover ratio measures how efficiently a company utilizes its working capital to generate sales.
- Idexx's working capital turnover has shown significant variation over the years, with a notable decrease in 2020 compared to 2019 and an increase in 2023.
- A higher working capital turnover ratio indicates that the company is using its working capital more efficiently to support its operations and generate revenue.

Overall, Idexx Laboratories, Inc. demonstrates generally effective management of its inventory, receivables, payables, and working capital, as indicated by the trends and levels of these activity ratios over the analyzed period.

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Average number of days

Days of Inventory on Hand (DOH) measures how long, on average, a company holds onto its inventory before selling it. Idexx Laboratories, Inc. has seen a fluctuation in its DOH over the past five years, with an increase from 67.46 days in 2020 to 98.50 days in 2022, followed by a decrease to 94.36 days in 2023. This indicates that the company's inventory management efficiency improved in 2023 compared to 2022 but is still higher than the levels seen in 2020 and 2021.

Days of Sales Outstanding (DSO) reflects the average number of days it takes for a company to collect payment after a sale is made. Idexx Laboratories, Inc. has shown some variability in its DSO over the years, ranging from 40.84 days in 2019 to 48.67 days in 2022. In 2023, the DSO decreased to 47.30 days, suggesting a slight improvement in the company's accounts receivable collection efficiency compared to the previous year.

Number of Days of Payables indicates the average number of days it takes for a company to pay its suppliers. Idexx Laboratories, Inc. has experienced fluctuations in its payables period over the past five years, with values ranging from 23.96 days in 2020 to 31.97 days in 2021. In 2023, the number of days of payables decreased to 27.45 days, indicating that the company took slightly longer to settle its payables compared to 2022.

Overall, the activity ratios of Idexx Laboratories, Inc. suggest that the company has made some changes in its inventory management, accounts receivable collection, and accounts payable processes throughout the years. Further analysis and comparison with industry benchmarks would provide deeper insights into the efficiency and effectiveness of Idexx Laboratories' operational activities.

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Long-term

Idexx Laboratories, Inc.'s long-term activity ratios reflect the company's efficiency in managing its fixed assets and total assets to generate revenue over the years. The fixed asset turnover ratio, which measures the efficiency of the company in generating sales from its investments in fixed assets, has been relatively stable and increasing slightly from 4.51 in 2019 to 5.21 in 2023. This indicates that Idexx Laboratories has been able to generate more revenue per dollar invested in fixed assets over time.

On the other hand, the total asset turnover ratio, which measures the efficiency of the company in generating sales from its total assets, has fluctuated but generally remained above 1.0, indicating that the company has been able to generate revenue more than the value of its total assets in each of the years shown. However, there was a noticeable decline in total asset turnover from 1.31 in 2019 to 1.12 in 2023.

Overall, the trends in Idexx Laboratories, Inc.'s long-term activity ratios suggest that the company has been effectively utilizing its fixed assets to generate revenue, while the efficiency in generating sales from total assets has shown some variability. It may be important for the company to focus on improving the utilization of total assets to drive more revenue in the future.