IDEX Corporation (IEX)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Inventory turnover | 4.34 | 3.73 | 4.16 | 4.57 | 4.67 |
| Receivables turnover | 7.65 | 7.19 | 7.76 | 8.02 | 8.37 |
| Payables turnover | 10.17 | 8.40 | 8.61 | 8.71 | 9.89 |
| Working capital turnover | 3.46 | 3.72 | 2.31 | 1.87 | 2.76 |
The activity ratios of Idex Corporation over the past five years reveal valuable insights into the efficiency of the company's operations.
1. Inventory Turnover: Idex Corporation's inventory turnover has been relatively stable over the five-year period, ranging from 3.73 to 4.67 times. This indicates that the company efficiently manages its inventory levels, with the ability to sell and replace inventory multiple times within a year.
2. Receivables Turnover: The receivables turnover for Idex Corporation has shown a slight fluctuation but overall remains at healthy levels, indicating that the company efficiently collects payments from customers. The higher the turnover, the quicker the company is able to convert its accounts receivable into cash.
3. Payables Turnover: The payables turnover ratio has been increasing gradually over the years, ranging from 8.40 to 10.17 times. A higher payables turnover ratio suggests that the company is able to delay payments to suppliers, effectively managing its cash flow and working capital.
4. Working Capital Turnover: The working capital turnover ratio reflects how efficiently a company utilizes its working capital to generate sales revenue. Idex Corporation's working capital turnover has shown some fluctuations, but the general trend indicates an improvement in recent years, reaching 3.46 times at the end of 2023. This suggests that the company is becoming more efficient in using its working capital to generate revenue.
Overall, the analysis of Idex Corporation's activity ratios indicates a consistent focus on operational efficiency and effective management of inventory, receivables, payables, and working capital.
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 | 84.07 | 97.94 | 87.77 | 79.91 | 78.21 |
| Days of sales outstanding (DSO) | days | 47.69 | 50.79 | 47.05 | 45.49 | 43.63 |
| Number of days of payables | days | 35.90 | 43.45 | 42.37 | 41.90 | 36.90 |
The activity ratios of Idex Corporation show changes over the past five years.
Days of inventory on hand (DOH) have fluctuated, with a decrease from 2019 to 2020 followed by an increase in subsequent years. This indicates that in recent years, Idex Corporation has been carrying more inventory on hand relative to its sales.
Days of sales outstanding (DSO) have shown a slight increase from 2019 to 2023, indicating that the company is taking longer to collect payments from customers. This trend may raise concerns about the efficiency of the company's accounts receivable management.
The number of days of payables has fluctuated as well, with an increase from 2019 to 2022, followed by a slight decrease in 2023. This suggests that the company is taking longer to pay its suppliers, which could be a strategy to manage cash flow effectively.
Overall, the activity ratios of Idex Corporation show varying trends that may reflect changes in the company's operational efficiency and working capital management over the past five years.
Long-term
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Fixed asset turnover | 7.61 | 8.33 | 8.45 | 7.88 | 8.90 |
| Total asset turnover | 0.56 | 0.58 | 0.56 | 0.53 | 0.65 |
The long-term activity ratios of Idex Corporation indicate the efficiency with which the company utilizes its assets to generate sales.
The fixed asset turnover ratio has shown a decreasing trend over the past five years, from 8.90 in 2019 to 7.61 in 2023. This suggests that the company is generating slightly fewer sales relative to its investment in fixed assets each year. A lower fixed asset turnover ratio could indicate underutilization or obsolescence of fixed assets, which may be impacting the company's ability to generate revenue efficiently.
On the other hand, the total asset turnover ratio has fluctuated within a relatively narrow range, from 0.53 in 2020 to 0.58 in 2022. The decrease in 2023 to 0.56 suggests that the company is generating slightly less revenue for every dollar of assets compared to the previous year.
Overall, while the fixed asset turnover ratio indicates a potential inefficiency in utilizing fixed assets to generate sales, the total asset turnover ratio suggests a relatively stable performance in utilizing total assets to generate revenue. It may be beneficial for Idex Corporation to assess its fixed asset management and consider strategies to improve the efficiency of its asset utilization.