Interpublic Group of Companies Inc (IPG)

Short-term

Turnover ratios

Interpublic Group of Companies Inc's activity ratios provide insights into the efficiency of the company's operations.

1. Inventory Turnover:
- The inventory turnover ratio reflects how many times the company's inventory is sold and replaced during a specific period.
- Interpublic Group's inventory turnover has fluctuated significantly over the reported periods, reaching very high levels in December 2020 and declining to more normalized levels in subsequent periods.
- A sudden spike or drop in inventory turnover may indicate changes in sales patterns, production issues, or inventory management problems.

2. Receivables Turnover:
- The receivables turnover ratio measures how efficiently the company collects payment from its customers.
- The absence of data for receivables turnover suggests that specific insights into the collection efficiency are not available.
- Monitoring receivables turnover is crucial to assess the effectiveness of credit policies and the management of outstanding customer balances.

3. Payables Turnover:
- Payables turnover ratio indicates how efficiently the company pays its suppliers.
- Similar to receivables turnover, the lack of data for payables turnover limits the ability to analyze the company's payment practices.
- A higher payables turnover may suggest that the company is paying its suppliers quickly, while a lower ratio may indicate delayed payments.

4. Working Capital Turnover:
- Working capital turnover ratio evaluates how effectively the company utilizes its working capital to generate revenue.
- Interpublic Group's working capital turnover has shown fluctuations but generally improving trends, indicating better utilization of working capital over time.
- A rising working capital turnover ratio suggests improved efficiency in utilizing resources to drive sales.

Overall, tracking these activity ratios can help assess Interpublic Group of Companies Inc's operational efficiency, inventory management, and working capital utilization.

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Average number of days

Interpublic Group of Companies Inc's days of inventory on hand (DOH) ratio, which measures how quickly a company turns its inventory into sales, has shown fluctuating trends over the years. The company experienced a significant increase in DOH from 0.04 days at the end of December 2020 to 117.90 days at the end of December 2023, indicating a substantial slowdown in inventory turnover during that period. The ratio improved by the end of September 2024, settling at 18.79 days, but still remained significantly higher compared to previous periods.

In contrast, the days of sales outstanding (DSO) ratio, which reflects how long it takes the company to collect outstanding receivables, did not have available data for analysis. This lack of information may indicate that the company does not disclose this particular metric or that it does not consider it a key aspect of its operational performance.

Moreover, the number of days of payables ratio, which indicates how quickly a company pays its suppliers, also lacked data for analysis, suggesting a potential limitation in assessing the company's payment practices and relationships with suppliers.

In conclusion, while the days of inventory on hand ratio displayed significant fluctuations, the absence of data on days of sales outstanding and days of payables ratios limits a comprehensive evaluation of Interpublic Group of Companies Inc's activity ratios related to inventory management and accounts receivable and payable turnover.

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Long-term

Interpublic Group of Companies Inc's long-term activity ratios show the efficiency with which the company is utilizing its assets to generate revenue.

1. Fixed Asset Turnover: The fixed asset turnover ratio measures how effectively the company is using its fixed assets to generate sales. Interpublic's fixed asset turnover ratio has been consistently high, indicating that the company is efficiently utilizing its fixed assets to generate revenue. However, there was a significant drop in the ratio from June 2021 to September 2023, which could suggest a decrease in efficiency in utilizing fixed assets during that period. The ratio then recovered and showed an increasing trend from December 2023 onwards. This improvement indicates an enhanced efficiency in utilizing fixed assets to generate sales.

2. Total Asset Turnover: The total asset turnover ratio reflects the company's ability to generate sales from its total assets. Interpublic's total asset turnover ratio has fluctuated over the years but generally stayed within a reasonable range. The ratio saw a decrease in 2020 but showed improvement in subsequent years, reaching its peak in March 2023. This indicates that the company has been efficient in generating sales from its total assets, with fluctuations likely reflecting changes in sales and asset base.

Overall, the analysis of Interpublic Group of Companies Inc's long-term activity ratios suggests that the company has shown efficiency in utilizing both its fixed and total assets to generate revenue, with some fluctuations over the years. Continued monitoring of these ratios will be important to track the company's operational efficiency and asset utilization in the long term.