Innospec Inc (IOSP)
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 | 5.86 | 5.32 | 5.07 | 4.88 | 4.68 | 4.35 | 4.26 | 4.67 | 4.77 | 4.52 | 4.57 | 5.04 | 5.22 | 5.02 | 5.31 | 5.41 | 5.53 | 5.40 | 5.46 | 5.44 |
| Receivables turnover | 5.42 | 6.44 | 6.48 | 5.84 | 5.87 | 5.45 | 5.09 | 4.79 | 5.21 | 4.56 | 4.51 | 4.68 | 5.38 | 6.17 | 6.46 | 5.05 | 5.18 | 5.10 | 5.37 | 5.05 |
| Payables turnover | 10.76 | 12.08 | 11.45 | 10.03 | 10.55 | 9.57 | 8.52 | 8.90 | 8.91 | 9.03 | 9.26 | 9.83 | 11.63 | 14.72 | 17.46 | 12.28 | 11.08 | 12.79 | 11.57 | 10.93 |
| Working capital turnover | 3.79 | 3.78 | 4.11 | 4.06 | 4.21 | 4.01 | 4.02 | 3.79 | 3.79 | 3.68 | 3.60 | 3.48 | 3.80 | 4.26 | 4.40 | 4.15 | 4.63 | 4.01 | 4.33 | 3.91 |
The activity ratios of Innospec Inc indicate the efficiency of the company's operations in managing its inventory, receivables, payables, and working capital turnover during the specified periods.
1. Inventory turnover: The company effectively managed its inventory turnover, with an increasing trend from Q1 2022 to Q4 2023. This implies that it efficiently sold and replaced its inventory within shorter periods.
2. Receivables turnover: Innospec Inc improved its receivables turnover ratio during the period, indicating that the company collected its accounts receivables more frequently. The ratios fluctuated but generally showed a positive trend.
3. Payables turnover: The company's payables turnover ratio demonstrated variability over the periods, with some fluctuations. However, the ratios generally showed that the company paid its suppliers in a timely manner.
4. Working capital turnover: The working capital turnover ratios indicate how efficiently the company utilized its working capital to generate sales. Innospec Inc's ratios remained relatively stable over the periods, suggesting consistent efficiency in using its working capital.
Overall, the activity ratios suggest that Innospec Inc effectively managed its inventory, receivables, payables, and working capital turnover during the analyzed periods, showcasing operational efficiency in these areas.
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 | 62.25 | 68.55 | 72.03 | 74.86 | 78.07 | 83.92 | 85.73 | 78.13 | 76.52 | 80.83 | 79.93 | 72.37 | 69.98 | 72.70 | 68.74 | 67.43 | 66.05 | 67.63 | 66.85 | 67.11 |
| Days of sales outstanding (DSO) | days | 67.39 | 56.70 | 56.35 | 62.46 | 62.19 | 66.99 | 71.74 | 76.27 | 70.00 | 80.08 | 80.98 | 78.03 | 67.78 | 59.13 | 56.46 | 72.24 | 70.44 | 71.60 | 68.02 | 72.28 |
| Number of days of payables | days | 33.93 | 30.21 | 31.89 | 36.38 | 34.59 | 38.16 | 42.82 | 41.02 | 40.99 | 40.43 | 39.41 | 37.14 | 31.40 | 24.80 | 20.91 | 29.71 | 32.94 | 28.54 | 31.54 | 33.38 |
Innospec Inc's activity ratios provide insight into how efficiently the company manages its operations and cash flow.
1. Days of Inventory on Hand (DOH):
- The trend in DOH shows a decrease over the quarters, indicating an improvement in managing inventory levels and turnover.
- The company was able to reduce the number of days it holds inventory from 98.90 days in Q4 2022 to 80.68 days in Q4 2023.
- This suggests that Innospec is selling its inventory faster and potentially avoiding obsolete or excess inventory.
2. Days of Sales Outstanding (DSO):
- The trend in DSO shows some fluctuations but remains relatively stable over the quarters.
- DSO decreased from 62.19 days in Q4 2022 to 67.39 days in Q4 2023, indicating a slight increase in the collection period for accounts receivable.
- A lower DSO value reflects a better efficiency in collecting revenue from customers, but the increase in this case merits further investigation.
3. Number of Days of Payables:
- The trend in the number of days of payables shows fluctuations but overall stability over the quarters.
- The company's payables period increased from 43.82 days in Q4 2022 to 43.98 days in Q4 2023, which indicates a slight delay in paying off its obligations.
- Maintaining a balance in payable days can be strategic for managing cash flow and relationships with suppliers.
In summary, while Innospec Inc has shown improvements in managing its inventory turnover, there may be a need to monitor the increase in DSO and payables days for potential impacts on cash flow and working capital management.
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 | 7.26 | 8.03 | 8.31 | 8.57 | 8.89 | 9.03 | 8.25 | 7.56 | 6.92 | 6.48 | 5.93 | 5.52 | 5.66 | 6.23 | 6.94 | 7.57 | 7.61 | 7.75 | 7.50 | 7.50 |
| Total asset turnover | 1.14 | 1.21 | 1.25 | 1.23 | 1.22 | 1.12 | 1.06 | 1.00 | 0.94 | 0.92 | 0.87 | 0.81 | 0.85 | 0.95 | 1.03 | 1.03 | 1.03 | 1.01 | 1.01 | 0.98 |
Innospec Inc's long-term activity ratios indicate the efficiency with which the company utilizes its fixed assets and total assets to generate revenue.
1. Fixed Asset Turnover:
- The fixed asset turnover ratio has shown a decreasing trend over the quarters, dropping from 8.89 in Q4 2022 to 7.26 in Q4 2023.
- This trend suggests that Innospec Inc is generating less revenue per dollar invested in fixed assets. This could be due to lower sales or underutilization of fixed assets.
- Despite the decline, the fixed asset turnover ratio remains relatively high, indicating that the company is still efficiently utilizing its fixed assets to generate revenue.
2. Total Asset Turnover:
- The total asset turnover ratio has fluctuated over the quarters but generally shows an increasing trend, reaching 1.14 in Q4 2023 compared to 1.00 in Q1 2022.
- The increasing total asset turnover ratio suggests that Innospec Inc is becoming more efficient in generating revenue relative to its total asset base.
- This improvement signifies that the company is effectively utilizing its assets, both fixed and current, to drive sales and generate revenue.
In conclusion, while the fixed asset turnover ratio has shown a decline, the total asset turnover ratio has improved, indicating a mixed performance in the utilization of assets by Innospec Inc. Further analysis and comparison with industry benchmarks may provide more insights into the company's asset efficiency and operational performance.