IPG Photonics Corporation (IPGP)

Short-term

Turnover ratios

IPG Photonics Corporation's inventory turnover has shown a gradual decline from 1.89 on March 31, 2020, to 2.19 on December 31, 2024. This suggests that the company's ability to sell through its inventory has improved over the years.

The receivables turnover and payables turnover ratios are not available for analysis, as the data is missing for all periods provided.

The working capital turnover ratio, which measures how efficiently a company is using its working capital to generate revenue, has increased steadily from 0.74 on March 31, 2020, to 0.80 on December 31, 2024. This indicates that IPG Photonics has been able to generate more revenue per dollar of working capital invested over the years.

Overall, the trend in inventory turnover and working capital turnover suggests that IPG Photonics has been managing its assets effectively and efficiently utilizing its working capital to generate revenue. However, the lack of data for receivables turnover and payables turnover limits a comprehensive analysis of the company's activity ratios.

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Average number of days

Based on the provided data for IPG Photonics Corporation, the analysis of activity ratios reveals the following trends:

1. Days of Inventory on Hand (DOH):
- The DOH measures the number of days a company holds its inventory before selling it.
- IPG Photonics' DOH has fluctuated over the years, ranging from a low of 166.32 days to a high of 255.75 days.
- The company's inventory turnover has shown some volatility, possibly indicating changes in demand or inventory management practices.
- An increase in DOH may suggest excess inventory levels or potential obsolete inventory issues.

2. Days of Sales Outstanding (DSO):
- No specific data is provided for DSO, which typically measures how long it takes for a company to collect its accounts receivable.
- Lack of data on DSO makes it challenging to assess IPG Photonics' efficiency in collecting payments from customers.
- Monitoring DSO is crucial for liquidity management and assessing credit and collection policies.

3. Number of Days of Payables:
- Similar to DSO, there is no data available for the number of days of payables.
- The payables period indicates how long a company takes to pay its suppliers.
- Understanding the payables period helps evaluate the company's working capital management and relationships with vendors.

In conclusion, while the analysis of IPG Photonics' DOH highlights inventory management trends, the absence of data on DSO and payables limits a comprehensive assessment of the company's overall efficiency in managing its working capital cycle. Monitoring these activity ratios can provide valuable insights into the company's operational performance and financial health.

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Long-term

IPG Photonics Corporation's fixed asset turnover ratio has shown a fluctuating trend over the past few years, ranging from a low of 2.01 in December 2020 to a high of 2.40 in December 2022. This ratio measures the company's efficiency in generating sales revenue from its investment in fixed assets. The overall trend indicates that the company has generally been able to effectively utilize its fixed assets to generate sales.

On the other hand, the total asset turnover ratio, which measures how efficiently a company uses its assets to generate revenue, has also shown variability. The ratio has ranged from 0.41 in December 2020 to 0.53 in March 2023, with a general increasing trend over the years. This suggests that IPG Photonics Corporation has been gradually becoming more efficient in generating sales revenue relative to its total assets.

Overall, both the fixed asset turnover and total asset turnover ratios suggest that IPG Photonics Corporation has been effectively managing its assets to generate sales revenue, with improvements in efficiency over the years. The company's ability to generate revenue from its asset base is a positive sign for its operational performance and long-term sustainability.