Itron Inc (ITRI)

Short-term

Turnover ratios

Itron Inc.'s activity ratios provide insights into how efficiently the company manages its inventory, receivables, payables, and working capital turnover over the five-year period.

- Inventory turnover has shown a decreasing trend from 2019 to 2023, indicating that the company is taking longer to sell its inventory. However, the ratio remains relatively stable, indicating that Itron manages its inventory effectively.
- Receivables turnover has been increasing steadily over the five-year period, which suggests that Itron is collecting its accounts receivable more quickly, improving its cash flow.
- Payables turnover has shown fluctuations but has generally increased from 2019 to 2023, implying that Itron is taking longer to pay its suppliers, potentially benefiting from extended payment terms.
- Working capital turnover has fluctuated with a general decreasing trend, suggesting a decrease in the frequency with which working capital is being used to generate sales.

Overall, while Itron Inc. has shown some areas of improvement in managing its accounts receivable and payables, there may be opportunities to enhance inventory management efficiency and working capital utilization for optimal performance.

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Average number of days

Activity ratios provide insight into how efficiently a company manages its assets and liabilities. Let's analyze Itron Inc.'s activity ratios based on the provided data:

1. Days of Inventory on Hand (DOH):
- There has been an increasing trend in the days of inventory on hand from 47.53 days in 2019 to 70.94 days in 2023.
- This indicates that Itron Inc. is taking longer to sell its inventory, which may lead to higher carrying costs and potentially obsolete inventory.

2. Days of Sales Outstanding (DSO):
- The days of sales outstanding have fluctuated over the past five years, but there seems to be a decreasing trend overall, from 68.98 days in 2019 to 51.02 days in 2023.
- A lower DSO suggests that the company is collecting receivables more quickly, which is a positive sign of effective credit and collection management.

3. Number of Days of Payables:
- The trend in the number of days of payables has been fluctuating over the years, with a notable decrease from 68.43 days in 2019 to 49.89 days in 2023.
- A lower number of days of payables may indicate that Itron Inc. is paying its suppliers more promptly, which could be beneficial in maintaining good relationships with vendors.

Overall, it is important to monitor these activity ratios regularly to assess the efficiency of Itron Inc.'s operations and its ability to manage working capital effectively.

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Long-term

Over the past five years, Itron Inc. has generally shown improvements in its long-term activity ratios. The fixed asset turnover ratio has been increasing steadily from 10.73 in 2019 to 16.88 in 2023. This indicates that the company is generating more revenue for each dollar invested in fixed assets, reflecting improved efficiency in utilizing its long-term assets to generate sales.

On the other hand, the total asset turnover ratio fluctuated over the period, with a high of 0.92 in 2019, a low of 0.76 in 2022, before increasing to 0.83 in 2023. This ratio measures the company's ability to generate sales from all its assets. While the ratio has not consistently improved, the slight increase in 2023 suggests better efficiency in utilizing both long-term and short-term assets to generate revenue compared to the previous year.

Overall, the trend in the fixed asset turnover ratio indicates that Itron Inc. has been more effective in using its long-term assets to drive sales, while the total asset turnover ratio shows some variability but a slight improvement in 2023. This suggests positive progress from the company in terms of its long-term activity efficiency.