International Flavors & Fragrances Inc (IFF)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Inventory turnover | 5.73 | 4.58 | 5.03 | 4.87 | 4.55 | 4.63 | 4.07 | 4.32 | 4.61 | 4.03 | 3.16 | 2.18 | 3.67 | 3.62 | 3.33 | 3.37 | 2.96 | 2.92 | 2.63 | 2.54 |
| Receivables turnover | 6.39 | 6.10 | 6.06 | 6.24 | 6.66 | 6.07 | 5.66 | 5.61 | 5.96 | 4.88 | 3.83 | 2.98 | 5.33 | 5.23 | 5.09 | 5.32 | 5.71 | 9.42 | 8.15 | 8.12 |
| Payables turnover | 10.31 | 10.50 | 11.44 | 11.98 | 10.12 | 9.47 | 7.72 | 7.41 | 7.57 | 7.27 | 5.61 | 4.23 | 7.48 | 8.25 | 7.04 | 7.94 | 6.52 | 7.89 | 6.60 | 5.95 |
| Working capital turnover | 4.35 | 4.12 | 4.57 | 4.62 | 3.27 | 4.30 | 4.10 | 3.49 | 3.39 | 2.71 | 2.57 | 2.07 | 4.28 | 3.65 | 2.93 | 3.61 | 3.60 | 5.98 | 4.63 | 4.58 |
Inventory turnover for International Flavors & Fragrances Inc. has been relatively stable over the past eight quarters, ranging from 2.63 to 3.15. This ratio indicates the number of times the company's inventory is sold and replaced within a given period, with higher values generally suggesting efficient management of inventory levels.
Receivables turnover shows a fluctuating trend, varying between 5.04 and 6.00 over the same period. This ratio reflects the effectiveness of the company in collecting its accounts receivable, with higher values implying quicker collection of outstanding payments from customers.
Payables turnover has also shown variability, ranging from 5.09 to 7.13. This ratio assesses how efficiently the company is managing its accounts payable, with higher values suggesting a shorter period in which the company takes to pay its suppliers.
Working capital turnover has been relatively stable with values between 3.36 and 4.77. This ratio measures how efficiently the company generates revenue from its working capital, with higher values indicating a more effective utilization of working capital to generate sales.
In summary, while inventory turnover and working capital turnover have shown some consistency, receivables turnover and payables turnover have displayed more fluctuation in their values over the analyzed quarters.
Average number of days
| Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 63.65 | 79.70 | 72.53 | 75.01 | 80.18 | 78.83 | 89.74 | 84.52 | 79.17 | 90.54 | 115.43 | 167.18 | 99.39 | 100.77 | 109.77 | 108.36 | 123.25 | 125.07 | 138.81 | 143.45 |
| Days of sales outstanding (DSO) | days | 57.16 | 59.84 | 60.22 | 58.46 | 54.82 | 60.15 | 64.47 | 65.04 | 61.20 | 74.74 | 95.37 | 122.37 | 68.52 | 69.79 | 71.76 | 68.62 | 63.97 | 38.74 | 44.80 | 44.96 |
| Number of days of payables | days | 35.41 | 34.77 | 31.90 | 30.48 | 36.08 | 38.56 | 47.26 | 49.26 | 48.21 | 50.23 | 65.07 | 86.33 | 48.82 | 44.23 | 51.83 | 45.94 | 56.01 | 46.25 | 55.30 | 61.32 |
Activity ratios provide insights into how efficiently a company manages its assets and relationships with customers and suppliers. By analyzing the activity ratios of International Flavors & Fragrances Inc. for the quarters mentioned, we can assess the company's performance in terms of inventory management, collection of receivables, and payment of payables.
1. Days of Inventory on Hand (DOH): The trend in DOH shows an improvement from Q1 2023 to Q4 2023, indicating that International Flavors & Fragrances Inc. has been managing its inventory more efficiently over time. The company is reducing the number of days it takes to sell its inventory, which could lead to lower carrying costs and potential obsolescence risks.
2. Days of Sales Outstanding (DSO): The DSO shows a fluctuating pattern, with some quarters showing improvement while others show a slight increase. However, the overall trend seems relatively stable. Lower DSO values suggest that the company is collecting payments from customers quicker, which can improve cash flow and reduce the risk of bad debts.
3. Number of Days of Payables: The number of days of payables has varied over the quarters, with some fluctuations. A higher number of days indicates that International Flavors & Fragrances Inc. is taking longer to pay its suppliers, which can be seen as a positive in terms of cash management. However, it is essential to consider maintaining good relationships with suppliers to ensure the continuity of the supply chain.
Overall, International Flavors & Fragrances Inc. appears to be effectively managing its inventory, receivables, and payables. Continued monitoring of these activity ratios can provide valuable insights into the company's operational efficiency and financial health.
Long-term
| Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Fixed asset turnover | 2.60 | 2.71 | 2.71 | 2.81 | 2.88 | 3.04 | 2.95 | 2.82 | 2.60 | 2.25 | 1.73 | 1.32 | 3.39 | 3.52 | 3.61 | 3.75 | 3.60 | 6.76 | 6.47 | 6.30 |
| Total asset turnover | 0.36 | 0.33 | 0.33 | 0.33 | 0.34 | 0.36 | 0.31 | 0.30 | 0.29 | 0.24 | 0.19 | 0.15 | 0.37 | 0.37 | 0.38 | 0.40 | 0.38 | 0.68 | 0.64 | 0.62 |
The analysis of International Flavors & Fragrances Inc.'s long-term activity ratios reveals the following trends:
1. Fixed asset turnover: The company's fixed asset turnover ratio has been consistently declining over the past eight quarters, indicating a decrease in the efficiency of utilizing fixed assets to generate sales revenue. The ratio decreased from 3.11 in Q3 2022 to 2.71 in Q4 2023. This downward trend may suggest that the company is not effectively utilizing its fixed assets to generate sales, which could potentially impact profitability and operational efficiency.
2. Total asset turnover: The total asset turnover ratio also shows a fluctuating pattern over the same period, with values ranging from 0.31 to 0.37. The ratio reflects the company's ability to generate sales revenue relative to its total assets. While the ratio improved slightly in Q4 2023 compared to the previous quarters, it remains relatively low, indicating that International Flavors & Fragrances Inc. may not be efficiently utilizing its total assets to generate revenue.
Overall, the trend in both fixed asset turnover and total asset turnover ratios suggests a need for International Flavors & Fragrances Inc. to assess its asset utilization efficiency and identify areas for improvement to enhance operational performance and profitability in the long term.