ITT Inc (ITT)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Inventory turnover | 4.03 | 3.73 | 4.05 | 3.69 | 3.78 | 3.76 | 3.73 | 3.69 | 3.87 | 3.81 | 3.64 | 4.00 | 4.33 | 4.58 | 4.50 | 4.57 | 4.70 | 4.48 | 4.62 | 5.00 |
| Receivables turnover | 5.16 | 4.40 | 4.91 | 4.52 | 4.86 | 4.79 | 4.58 | 4.57 | 4.75 | 4.61 | 4.68 | 4.54 | 4.98 | 4.98 | 4.86 | 4.60 | 4.88 | 5.08 | 5.63 | 4.90 |
| Payables turnover | 5.20 | 5.03 | 5.30 | 4.90 | 4.98 | 5.29 | 5.26 | 5.27 | 5.15 | 5.12 | 4.66 | 4.63 | 5.00 | 5.54 | 5.41 | 5.23 | 5.53 | 5.65 | 6.56 | 5.91 |
| Working capital turnover | 6.83 | 4.80 | 5.07 | 4.78 | 4.00 | 4.38 | 4.82 | 4.52 | 4.59 | 5.61 | 5.99 | 4.22 | 3.48 | 3.75 | 3.70 | 2.36 | 2.37 | 2.60 | 2.97 | 3.35 |
ITT Inc's activity ratios indicate the efficiency of the company in managing its assets and operations.
1. Inventory Turnover: The inventory turnover ratio has shown a gradual decline from 5.00 in March 2020 to 3.78 in December 2024. This suggests that ITT Inc is taking longer to sell its inventory, which may indicate potential issues with sales or inventory management.
2. Receivables Turnover: The receivables turnover ratio has fluctuated but generally remained stable over the years, ranging from 4.52 in March 2024 to 5.16 in December 2024. This indicates that ITT Inc is efficiently collecting payments from its customers within a reasonable time frame.
3. Payables Turnover: The payables turnover ratio has fluctuated as well, ranging from 4.90 in March 2024 to 6.56 in June 2020. A higher ratio suggests that the company is paying its suppliers more frequently, which may indicate strong cash flow or favorable credit terms.
4. Working Capital Turnover: The working capital turnover ratio has shown significant variability, ranging from 2.37 in December 2020 to 6.83 in December 2024. A higher ratio indicates that ITT Inc is generating more revenue from its working capital, reflecting efficient use of resources.
Overall, the analysis of ITT Inc's activity ratios shows mixed results, with some areas of concern such as declining inventory turnover, but also strengths in managing receivables and working capital effectively. Further investigation into the reasons behind these trends would be necessary to fully assess the company's operational efficiency and financial health.
Average number of days
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 90.54 | 97.88 | 90.12 | 98.88 | 96.53 | 97.10 | 97.93 | 98.96 | 94.35 | 95.80 | 100.28 | 91.18 | 84.31 | 79.73 | 81.15 | 79.93 | 77.60 | 81.42 | 79.01 | 72.94 |
| Days of sales outstanding (DSO) | days | 70.67 | 82.91 | 74.34 | 80.83 | 75.07 | 76.20 | 79.62 | 79.92 | 76.82 | 79.20 | 78.00 | 80.48 | 73.28 | 73.34 | 75.10 | 79.35 | 74.76 | 71.91 | 64.80 | 74.43 |
| Number of days of payables | days | 70.20 | 72.62 | 68.82 | 74.51 | 73.31 | 69.00 | 69.42 | 69.27 | 70.88 | 71.28 | 78.34 | 78.79 | 73.06 | 65.91 | 67.49 | 69.75 | 66.04 | 64.64 | 55.67 | 61.78 |
Based on the provided data for ITT Inc, let's analyze the activity ratios:
1. Days of Inventory on Hand (DOH):
- The DOH indicates the average number of days the company holds inventory before selling it.
- ITT Inc's inventory holding period has shown fluctuation over the years, ranging from a low of 72.94 days in March 2020 to a peak of 100.28 days in June 2022.
- The increasing trend in recent periods, such as reaching 98.88 days in March 2024, may suggest potential challenges in managing inventory effectively.
2. Days of Sales Outstanding (DSO):
- DSO represents the average number of days it takes for the company to collect revenue after making a sale.
- ITT Inc's DSO figures have also varied, with a range from 64.80 days in June 2020 to 82.91 days in September 2024.
- The trend has been relatively stable overall, with a slight increase observed towards the latter half of 2024.
3. Number of Days of Payables:
- This ratio measures how long it takes the company to pay its suppliers.
- ITT Inc's payment period ranged from 55.67 days in June 2020 to 78.79 days in March 2022.
- The company seems to have had varying payment practices, with fluctuations in the number of days taken to settle payables.
In conclusion, while ITT Inc has experienced fluctuations in its activity ratios over the years, it is important for the company to closely monitor and manage its inventory, sales collections, and payment practices to ensure efficient working capital management and sustainable operations.
Long-term
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Fixed asset turnover | 6.29 | 6.10 | 6.38 | 5.98 | 5.85 | 6.17 | 5.98 | 5.79 | 5.67 | 5.90 | 5.66 | 5.53 | 5.43 | 5.64 | 5.35 | 5.01 | 4.72 | 4.92 | 5.16 | 5.50 |
| Total asset turnover | 0.77 | 0.71 | 0.79 | 0.77 | 0.83 | 0.85 | 0.81 | 0.81 | 0.79 | 0.79 | 0.77 | 0.75 | 0.78 | 0.81 | 0.78 | 0.60 | 0.58 | 0.60 | 0.63 | 0.66 |
The fixed asset turnover ratio for ITT Inc has been ranging between 4.72 to 6.38 over the past five years, with an increasing trend observed from 2020 to 2024. This indicates that the company is generating increasing sales revenue relative to its investment in fixed assets such as property, plant, and equipment.
On the other hand, the total asset turnover ratio has fluctuated between 0.58 to 0.85 during the same period. Although there have been fluctuations, there is a general trend of improvement in total asset turnover from 2020 to 2023, after which it decreased slightly in 2024. This ratio reflects how efficiently the company is utilizing all its assets to generate sales.
Overall, the improvement in both fixed asset turnover and total asset turnover ratios suggests that ITT Inc has been effectively managing its assets to generate sales revenue. However, it would be beneficial to further analyze the reasons for the fluctuations in the total asset turnover ratio in 2024 to understand the company's asset utilization efficiency in more detail.