Inter Parfums Inc (IPAR)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Inventory turnover | 1.29 | 1.35 | 1.62 | 1.31 | 1.59 |
| Receivables turnover | 5.17 | 4.80 | 5.18 | 4.19 | 5.28 |
| Payables turnover | 4.91 | 4.44 | 3.94 | 5.85 | 4.95 |
| Working capital turnover | 2.56 | 2.45 | 1.89 | 1.21 | 1.83 |
Interpreting the activity ratios of Inter Parfums, Inc. over the past five years provides insight into the efficiency of the company's operations.
1. Inventory turnover:
Inter Parfums' inventory turnover has been relatively stable over the years, ranging from 1.29 to 1.62. This indicates that the company is efficiently managing its inventory levels and selling its products at a consistent pace.
2. Receivables turnover:
The receivables turnover ratio has shown variability, with the highest value in 2021 and the lowest in 2020. A higher turnover ratio suggests that Inter Parfums is collecting its receivables more frequently, which is positive for cash flow management.
3. Payables turnover:
The payables turnover ratio has fluctuated over the years, with the lowest value in 2021 and the highest in 2020. A higher payables turnover indicates that the company is paying its suppliers more quickly, which can impact liquidity and supplier relationships.
4. Working capital turnover:
The working capital turnover ratio has increased over the years, reaching its highest value in 2023. This suggests that Inter Parfums is generating sales more efficiently relative to its working capital, which can indicate good utilization of resources.
Overall, while the company has shown consistency in managing its inventory levels, improvements can be made in the management of receivables and payables to enhance cash flow and working capital efficiency.
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 | 283.58 | 269.82 | 225.06 | 278.34 | 228.92 |
| Days of sales outstanding (DSO) | days | 70.62 | 76.09 | 70.47 | 87.14 | 69.18 |
| Number of days of payables | days | 74.28 | 82.24 | 92.76 | 62.35 | 73.80 |
Interpreting the activity ratios for Inter Parfums, Inc. can provide insights into its operational efficiency:
1. Days of Inventory on Hand (DOH): This ratio measures the number of days it takes for the company to sell its inventory. A lower DOH indicates faster inventory turnover. Over the five-year period, Inter Parfums has shown fluctuating DOH figures, ranging from 225.05 days to 283.60 days. The increase in 2023 compared to 2022 may suggest a decrease in the efficiency of inventory management during the most recent year.
2. Days of Sales Outstanding (DSO): DSO measures the average number of days it takes for the company to collect its accounts receivable. A lower DSO indicates faster collection of receivables. Inter Parfums' DSO has varied over the period, with a peak in 2020 and a decline in 2022. The decrease in 2022 compared to 2021 suggests improved efficiency in collecting receivables.
3. Number of Days of Payables: This ratio represents the average number of days it takes for the company to pay its suppliers. A higher number of days indicates the company takes longer to pay its bills. Inter Parfums has shown fluctuating trends in this ratio over the years, with the highest figure in 2022. The increase in 2022 compared to 2021 may signal a lengthening of payment periods to suppliers during that year.
In summary, the trends in Inter Parfums' activity ratios indicate fluctuations in inventory management, accounts receivable collection, and payment to suppliers over the five-year period. Monitoring these ratios can help assess the company's operational efficiency and identify areas for improvement.
Long-term
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Fixed asset turnover | 7.79 | 6.52 | 5.89 | 27.53 | 64.24 |
| Total asset turnover | 0.96 | 0.83 | 0.77 | 0.61 | 0.86 |
Interpreting the long-term activity ratios of Inter Parfums, Inc. based on the provided data, we observe varying trends over the past five years.
1. Fixed Asset Turnover:
- The fixed asset turnover ratio measures how efficiently a company utilizes its fixed assets to generate revenue.
- Inter Parfums' fixed asset turnover has shown fluctuations, with a decreasing trend from 2019 to 2021, followed by a significant increase in 2022 and a further rise in 2023.
- The substantial increase in fixed asset turnover in 2022 and 2023 indicates that the company has been more effective in generating sales from its fixed assets during these years compared to the previous ones.
- The extremely high ratios in 2020 and 2019 may indicate a disposal or reduction of fixed assets during those years.
2. Total Asset Turnover:
- The total asset turnover ratio assesses a company's ability to generate sales from all its assets.
- Inter Parfums' total asset turnover ratio has also been fluctuating over the period, with a general increasing trend from 2020 to 2023.
- The ratio hit its lowest point in 2020 but then steadily increased in the subsequent years, reaching its peak in 2023.
- The rise in total asset turnover suggests that the company has been more efficient in utilizing all its assets to generate sales revenue in recent years.
Overall, the analysis of Inter Parfums' long-term activity ratios indicates that the company has shown improvements in asset turnover efficiency, particularly in generating sales from both fixed assets and total assets in the most recent years. This could be attributed to better operational management or strategic decisions made by the company during this period. Further analysis and comparison with industry benchmarks would provide a clearer picture of Inter Parfums' efficiency in utilizing its assets for revenue generation.