Itron Inc (ITRI)

Short-term

Turnover ratios

Itron Inc's activity ratios provide insight into how efficiently the company manages its assets and operations.

1. Inventory turnover:
- The inventory turnover ratio indicates how many times a company's inventory is sold and replaced over a period.
- Itron Inc's inventory turnover has trended downward from 10.58 in 2020 to 7.24 in 2024.
- A decreasing trend in inventory turnover may suggest possible issues with inventory management efficiency or changes in demand for Itron's products.

2. Receivables turnover:
- The receivables turnover ratio measures how efficiently a company collects cash from its credit sales.
- Itron's receivables turnover has shown variability but with a generally increasing trend from 5.60 in 2020 to 6.97 in 2024.
- An increasing trend in receivables turnover indicates that Itron has been collecting receivables more quickly over the years, which is a positive sign of effective credit management.

3. Payables turnover:
- The payables turnover ratio reflects how quickly a company pays its suppliers.
- Itron's payables turnover has fluctuated over the years, showing a significant increase from 6.81 in 2022 to 13.53 in 2024.
- A higher payables turnover ratio suggests that Itron has been extending its payment period to suppliers, potentially improving liquidity and cash flow management.

4. Working capital turnover:
- The working capital turnover ratio measures how efficiently a company utilizes its working capital to generate sales.
- Itron's working capital turnover has decreased significantly from 7.57 in 2021 to 1.90 in 2024.
- A declining trend in working capital turnover indicates that Itron is generating fewer sales relative to its working capital, which could signal inefficiencies in operating activities or changes in business operations.

Overall, analyzing these activity ratios provides valuable insights into Itron Inc's operational efficiency, inventory management, credit collection practices, supplier payment policies, and working capital utilization over the years.

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Average number of days

Activity ratios provide insights 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):
- The days of inventory on hand measure how long it takes for a company to sell its inventory.
- The trend for Itron Inc's DOH shows an increase from 34.49 days in 2020 to 56.42 days in 2023, then a slight decrease to 50.39 days in 2024.
- The increase in DOH can indicate a gradual slowdown in inventory turnover, which may lead to excess inventory levels or inefficient inventory management.

2. Days of Sales Outstanding (DSO):
- DSO reflects the average number of days it takes for a company to collect its accounts receivable.
- Itron Inc's DSO decreased from 65.14 days in 2020 to 52.40 days in 2024.
- The decreasing trend indicates that the company has improved its collection process, turning accounts receivable into cash more quickly.

3. Number of Days of Payables:
- This ratio measures how long it takes for a company to pay its suppliers.
- Itron Inc's number of days of payables fluctuated over the years, with a decrease from 40.78 days in 2020 to 26.97 days in 2024.
- A decrease in the number of days of payables may suggest that the company is paying its suppliers more quickly, which could impact cash flow management.

In conclusion, Itron Inc has shown mixed performance in managing its inventory, accounts receivable, and accounts payable. The company has been able to reduce its accounts receivable collection period but experienced fluctuations in inventory turnover and payment to suppliers. Further analysis of the company's working capital management practices and operational efficiency may provide a more comprehensive understanding of its overall performance.

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Long-term

Based on the provided data for Itron Inc's long-term activity ratios, we can analyze the company's performance using two key ratios: Fixed Asset Turnover and Total Asset Turnover.

1. Fixed Asset Turnover:
- The Fixed Asset Turnover ratio indicates how efficiently the company is utilizing its fixed assets to generate sales. A higher ratio is generally preferred as it suggests that the company is generating more sales relative to its investment in fixed assets.
- Over the years, Itron Inc's Fixed Asset Turnover has shown a consistent increasing trend. It has improved from 9.97 in 2020 to 21.15 in 2024.
- This upward trend indicates that the company has been able to increase its sales significantly relative to its investments in fixed assets. It suggests improved efficiency and productivity in utilizing fixed assets.

2. Total Asset Turnover:
- The Total Asset Turnover ratio measures how efficiently the company is using all its assets to generate sales. A higher ratio indicates better asset utilization and productivity.
- Itron Inc's Total Asset Turnover has shown some fluctuations over the years. It remained relatively constant at around 0.79 in 2020 and 2021, decreased to 0.75 in 2022, then increased to 0.83 in 2023, and dropped to 0.72 in 2024.
- Despite the fluctuations, the overall trend indicates that the company has been able to generate sales in relation to its total assets, although there was a slight decrease in 2024.

In conclusion, based on the analysis of Itron Inc's long-term activity ratios, the company has shown significant improvement in utilizing its fixed assets efficiently to generate sales, as reflected in the increasing trend of the Fixed Asset Turnover ratio. However, the Total Asset Turnover ratio showed some fluctuations, suggesting varying levels of efficiency in utilizing all assets to generate sales over the years.