John Bean Technologies Corporation (JBT)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Inventory turnover | 1.96 | 7.24 | 7.20 | 7.62 | 5.50 |
| Receivables turnover | 7.95 | 7.24 | 7.81 | 7.32 | 6.73 |
| Payables turnover | 3.47 | 11.20 | 8.86 | 10.69 | 6.79 |
| Working capital turnover | 2.77 | 7.16 | 11.07 | 10.89 | 8.33 |
The activity ratios of John Bean Technologies Corp over the past five years provide insight into the company's efficiency in managing its resources.
1. Inventory Turnover:
- The inventory turnover ratio measures how efficiently the company manages its inventory. A higher ratio indicates that the company is selling its inventory quickly.
- The trend shows a slight decrease from 2019 to 2023, which may suggest a longer inventory holding period or slower sales relative to its inventory levels during this period.
2. Receivables Turnover:
- The receivables turnover ratio reflects how quickly the company collects payments from its customers. A higher ratio indicates a shorter collection period.
- The trend in this ratio is relatively stable, indicating that the company has been consistent in collecting payments from its customers over the years.
3. Payables Turnover:
- The payables turnover ratio measures how quickly the company pays its suppliers. A higher ratio suggests that the company is paying its suppliers more efficiently.
- The ratio fluctuates over the years with a notable increase from 2022 to 2023, indicating a change in the company's payment practices towards its suppliers.
4. Working Capital Turnover:
- The working capital turnover ratio assesses how efficiently the company utilizes its working capital to generate sales.
- The trend in this ratio shows a general decrease from 2019 to 2023, suggesting a decline in the company's ability to generate sales relative to its working capital over this period.
In summary, the analysis of the activity ratios for John Bean Technologies Corp indicates areas of strength and areas that may require attention in terms of inventory management, receivables collection, payables management, and the utilization of working capital to drive sales.
Average number of days
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 186.68 | 50.42 | 50.72 | 47.87 | 66.36 |
| Days of sales outstanding (DSO) | days | 45.91 | 50.39 | 46.71 | 49.88 | 54.20 |
| Number of days of payables | days | 105.18 | 32.58 | 41.18 | 34.14 | 53.79 |
Activity ratios provide insights into how efficiently a company manages its resources related to inventory, accounts receivable, and accounts payable. Let's analyze the activity ratios of John Bean Technologies Corp over the past five years:
1. Days of Inventory on Hand (DOH):
- The DOH indicates the number of days it takes for the company to sell its inventory.
- John Bean Technologies Corp's DOH has increased from 66.36 days in 2019 to 80.84 days in 2023.
- This suggests that the company is holding inventory for a longer period, which may tie up working capital and indicate potential inefficiencies in inventory management.
2. Days of Sales Outstanding (DSO):
- The DSO measures how long it takes the company to collect payments from customers.
- John Bean Technologies Corp's DSO has fluctuated over the years, from 54.20 days in 2019 to 47.02 days in 2023.
- A decreasing DSO indicates that the company is collecting receivables faster, which is a positive sign of efficient credit management and cash flow.
3. Number of Days of Payables:
- This ratio represents the number of days a company takes to pay its suppliers.
- John Bean Technologies Corp's number of days of payables has varied, with a notable decrease from 53.79 days in 2019 to 45.54 days in 2023.
- A lower number of days of payables could indicate improved liquidity but may also suggest strained relationships with suppliers if the company is paying too quickly.
In summary, John Bean Technologies Corp has shown improvements in collecting receivables efficiently (lower DSO) but has been holding inventory for a longer period (higher DOH). The decrease in the number of days of payables reflects potential changes in the company's payment policies. Monitoring these activity ratios is crucial for assessing the company's operational efficiency and potential impacts on cash flow and working capital management.
Long-term
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Fixed asset turnover | 7.01 | 8.83 | 6.98 | 6.45 | 7.33 |
| Total asset turnover | 0.63 | 0.82 | 0.87 | 0.96 | 1.02 |
The long-term activity ratios of John Bean Technologies Corp, as indicated by its fixed asset turnover and total asset turnover, have shown fluctuations over the past five years.
The fixed asset turnover ratio measures how efficiently the company generates sales revenue from its fixed assets. The ratio has ranged from 6.45 to 8.03 over the period under review, with the highest value observed in 2022. This indicates that in 2022, the company generated $8.03 in sales for every dollar invested in fixed assets. The downward trend from 2022 to 2023 suggests a potential decrease in the efficiency of utilizing fixed assets to generate revenue.
On the other hand, the total asset turnover ratio reflects how well the company utilizes all its assets to generate sales. The ratio has declined from 1.02 in 2019 to 0.61 in 2023, indicating a decreasing trend in the efficiency of asset utilization over the years. This decline may suggest that the company's total assets are becoming less productive in generating sales revenue.
Overall, a high fixed asset turnover ratio may indicate operational efficiency in utilizing fixed assets, while a decreasing total asset turnover ratio may signal a need for improved asset management strategies to enhance revenue generation efficiency.