Ingersoll Rand Inc (IR)

Short-term

Turnover ratios

Ingersoll Rand Inc's activity ratios provide insights into how efficiently the company manages its resources.

1. Inventory turnover: Ingersoll Rand's inventory turnover ratio has been relatively stable over the years, ranging from 3.50 to 3.99. This indicates that the company is able to sell and replace its inventory around 3-4 times a year on average.

2. Receivables turnover: The receivables turnover ratio has shown an increasing trend from 4.11 in 2020 to 5.42 in 2024. This suggests that the company is collecting its receivables more efficiently, with customers paying faster over the years.

3. Payables turnover: The payables turnover ratio has also remained relatively consistent, ranging from 4.61 to 4.98. This indicates that Ingersoll Rand is able to manage its payments to suppliers effectively, with a turnover rate of around 4-5 times per year.

4. Working capital turnover: The working capital turnover ratio has shown a significant increase from 1.68 in 2020 to 3.09 in 2023 and 2024. This highlights an improvement in the company's ability to generate sales revenue relative to its working capital investment.

Overall, these activity ratios suggest that Ingersoll Rand Inc has been efficiently managing its inventory, receivables, payables, and working capital over the years, which is a positive indicator of the company's operational efficiency and financial performance.

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Average number of days

Ingersoll Rand Inc's activity ratios show the efficiency of the company in managing its working capital and operations.

1. Days of Inventory on Hand (DOH):
- In 2020, Ingersoll Rand held inventory for an average of 101.86 days, which decreased to 98.54 days in 2021, and then increased to 104.23 days in 2022. It decreased significantly to 91.49 days in 2023 and slightly increased to 94.73 days in 2024.
- The decreasing trend from 2020 to 2021 suggests that the company managed its inventory more efficiently, but the subsequent increase in 2022 indicates a longer period in holding inventory.
- The decrease in 2023 and slight increase in 2024 indicate that Ingersoll Rand may have optimized its inventory management processes.

2. Days of Sales Outstanding (DSO):
- In 2020, Ingersoll Rand took an average of 88.80 days to collect its sales revenues, which improved to 67.20 days in 2021 and further decreased to 65.51 days in 2023. It slightly increased to 69.22 days in 2022 and 67.37 days in 2024.
- The decreasing trend from 2020 to 2023 indicates that the company improved its credit collection process, but the slight increase in 2022 and 2024 shows a longer period in collecting sales revenues.

3. Number of Days of Payables:
- In 2020, Ingersoll Rand took an average of 76.23 days to pay its creditors, which increased to 77.35 days in 2021 and further to 79.16 days in 2022. It then decreased to 73.22 days in 2023 and slightly increased to 75.75 days in 2024.
- The increasing trend from 2020 to 2022 indicates a longer period in paying creditors, but the decrease in 2023 followed by a slight increase in 2024 suggests that the company may have optimized its payment cycles.

In summary, Ingersoll Rand Inc's activity ratios reflect fluctuations in its inventory management, credit collection efficiency, and payment cycles over the analyzed period. Efforts to optimize these ratios can lead to improved working capital management and operational efficiency.

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Long-term

Ingersoll Rand Inc has shown a positive trend in its fixed asset turnover ratio over the past five years, increasing from 6.52 in 2020 to 8.59 in 2024. This implies that the company has been able to generate more sales revenue from its fixed assets over time, indicating efficient utilization of its productive assets.

Similarly, the total asset turnover ratio has also improved steadily, from 0.25 in 2020 to 0.40 in 2024. This suggests that Ingersoll Rand Inc has been able to generate more revenue relative to its total assets, reflecting effective management in utilizing its entire asset base to generate sales.

Overall, the increasing trend in both the fixed asset turnover and total asset turnover ratios indicates that Ingersoll Rand Inc has been efficient in generating revenue from its assets, which is a positive sign for the company's long-term operational performance and asset utilization.