IPG Photonics Corporation (IPGP)

Short-term

Turnover ratios

IPG Photonics Corporation's activity ratios provide insights into the efficiency of the company's operations.

1. Inventory Turnover:
- The inventory turnover ratio reflects how many times a company's inventory is sold and replaced over a period.
- IPG Photonics' inventory turnover has fluctuated over the years, decreasing from 1.81 in 2020 to 1.64 in 2023 before showing a significant increase to 2.24 in 2024.
- A low inventory turnover can indicate overstocking or slow sales, while a high ratio suggests efficient inventory management and quick sales.

2. Receivables Turnover:
- The absence of data for receivables turnover indicates that information on how quickly the company collects outstanding payments from customers is not available.
- The receivables turnover ratio is essential for assessing how well a company manages its accounts receivable, as a higher ratio typically signifies faster collection times.

3. Payables Turnover:
- Similar to receivables turnover, the lack of data for payables turnover means that information regarding how quickly the company pays its suppliers is not provided.
- The payables turnover ratio is crucial for evaluating the efficiency of a company's payables management and its relationship with suppliers.

4. Working Capital Turnover:
- The working capital turnover ratio measures how efficiently a company utilizes its working capital to generate revenue.
- IPG Photonics' working capital turnover has shown a generally increasing trend over the years, from 0.62 in 2020 to 0.80 in 2024.
- A higher working capital turnover ratio indicates that the company is effectively utilizing its working capital to support its operations and generate sales revenue.

In conclusion, while IPG Photonics has shown improvements in its inventory turnover and working capital turnover ratios, the lack of data for receivables and payables turnover limits a comprehensive assessment of the company's overall efficiency in managing its operating cycle.

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Average number of days

IPG Photonics Corporation's activity ratios provide insights into the efficiency of the company's operations.

1. Days of Inventory on Hand (DOH):
- The company's DOH has shown a slight fluctuation over the years, ranging from 162.67 days to 222.15 days. This indicates the number of days it takes for the company to sell its inventory. A lower DOH is generally more favorable as it suggests faster turnover and better inventory management. IPG Photonics Corporation should strive to reduce its DOH to improve liquidity and efficiency.

2. Days of Sales Outstanding (DSO):
- The data provided shows no information for DSO, which typically measures how quickly a company collects its accounts receivable. Lack of information may indicate that the company's financial statements do not provide detailed data on accounts receivable turnover. It is important for IPG Photonics Corporation to track DSO to ensure timely collection of outstanding payments from customers.

3. Number of Days of Payables:
- Similarly, there is no data available for the number of days of payables, which measures how long it takes a company to pay its suppliers. While extending payables can improve cash flow, excessively long payment periods may strain supplier relationships. IPG Photonics Corporation should monitor this metric to maintain positive relationships with suppliers while managing working capital effectively.

In summary, IPG Photonics Corporation should focus on optimizing its inventory turnover, monitoring accounts receivable collection, and managing payables effectively to enhance operational efficiency and financial performance.

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Long-term

The fixed asset turnover ratio measures a company's ability to generate sales revenue from its investment in fixed assets. A higher fixed asset turnover ratio indicates that the company is effectively utilizing its fixed assets to generate sales.

For IPG Photonics Corporation:
- The fixed asset turnover ratio has been increasing steadily over the years, from 2.01 in 2020 to 2.30 in 2021 and further to 2.40 in 2022. This indicates that the company has been able to generate more sales revenue per dollar invested in fixed assets during this period.

- However, the data is not available for 2023 and 2024, so we cannot analyze the trend for these years.

The total asset turnover ratio measures how efficiently a company is utilizing all its assets to generate sales. A higher total asset turnover ratio suggests that the company is effectively managing its assets to generate revenue.

For IPG Photonics Corporation:
- The total asset turnover ratio increased from 0.41 in 2020 to 0.46 in 2021 and further to 0.52 in 2022, indicating an improvement in the company's ability to generate sales relative to its total assets during this period.

- However, there was a slight decrease in the total asset turnover ratio to 0.48 in 2023 and then to 0.43 in 2024. This could suggest that the company may have faced challenges in efficiently utilizing its assets to generate sales revenue in those years.

In conclusion, IPG Photonics Corporation has shown a generally positive trend in its fixed asset turnover ratio, indicating efficient utilization of fixed assets to generate sales. However, the trend in the total asset turnover ratio has been mixed, with improvements in some years and declines in others, signaling potential fluctuations in the company's overall asset efficiency in generating revenue.