JBTMarel Corp (JBTM)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Inventory turnover | 4.67 | 4.52 | 4.02 | 4.01 | 6.05 |
| Receivables turnover | 5.12 | 5.76 | 5.99 | 4.20 | 5.68 |
| Payables turnover | 8.32 | 8.01 | 6.22 | 4.94 | 8.49 |
| Working capital turnover | 1.29 | 2.70 | 5.26 | 8.30 | 10.89 |
The activity ratios for JBTMarel Corp illustrate several notable trends over the period from 2020 to 2024:
Inventory Turnover:
The inventory turnover ratio decreased from 6.05 in 2020 to a low of 4.01 in 2021, indicating a reduction in the efficiency of inventory management during that year. Subsequently, the ratio remained relatively stable around 4.02 in 2022 before showing a gradual improvement to 4.52 in 2023 and further to 4.67 in 2024. The overall trend suggests a modest recovery in inventory turnover efficiency over the last two years.
Receivables Turnover:
The receivables turnover ratio experienced a decline from 5.68 in 2020 to 4.20 in 2021, implying lengthening of receivables collection periods. However, it rebounded significantly in 2022 to 5.99, surpassing the 2020 level, before decreasing slightly to 5.76 in 2023 and further to 5.12 in 2024. This fluctuation reflects variability in receivables collection efficiency, with a notable improvement in 2022 that was partially offset thereafter.
Payables Turnover:
The payables turnover ratio decreased from 8.49 in 2020 to 4.94 in 2021, indicating a lengthening of the period the company takes to settle its payables. From 2022 onwards, the ratio increased substantially to 6.22 in 2022, then to 8.01 in 2023, and marginally to 8.32 in 2024. The upward trend after 2021 suggests an improvement in the company's payables management and possibly negotiations for extended payment terms.
Working Capital Turnover:
The working capital turnover ratio declined markedly from 10.89 in 2020 to 8.30 in 2021, continuing to drop sharply to 5.26 in 2022, and further to 2.70 in 2023. By 2024, the ratio experienced a significant decline to 1.29. This persistent downward trend indicates a decreasing efficiency in the utilization of working capital to generate sales over these years, reflecting either increased working capital levels or declining sales relative to working capital investments.
Summary:
Overall, JBTMarel Corp’s activity ratios depict a period of initial inefficiency in inventory and receivables management in 2021, followed by partial recovery in latter years. The payables turnover increased after a dip, suggesting better management or favorable payment terms. Conversely, the decline in working capital turnover indicates diminishing efficiency in deploying working capital to support sales, which could be due to several factors such as increased inventory, receivables, or reduced sales activity relative to working capital.
These ratios collectively suggest the company has faced challenges in inventory, receivables, and overall working capital efficiency over this period, though some areas have shown signs of improvement toward 2024.
Average number of days
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 78.09 | 80.84 | 90.83 | 91.02 | 60.31 |
| Days of sales outstanding (DSO) | days | 71.28 | 63.36 | 60.96 | 86.90 | 64.30 |
| Number of days of payables | days | 43.89 | 45.54 | 58.69 | 73.90 | 43.01 |
The analysis of JBTMarel Corp's activity ratios over the period from December 31, 2020, to December 31, 2024, reveals notable trends in inventory management, receivables collection, and payables management.
Days of Inventory on Hand (DOH): The company's inventory turnover efficiency fluctuated during this timeframe. There was a significant increase from 60.31 days in 2020 to 91.02 days in 2021, indicating that inventory was held longer during that period. Subsequently, the DOH slightly declined to 90.83 days in 2022, suggesting a marginal improvement in inventory turnover, although levels remained high. Towards the end of the period, there was a consistent decrease to 80.84 days in 2023 and further to 78.09 days in 2024. This downward trend suggests that the company has been improving its inventory management, reducing the average days inventory is held, which enhances operational efficiency.
Days of Sales Outstanding (DSO): The receivables collection period exhibits variability over the examined years. The DSO increased sharply from 64.30 days in 2020 to 86.90 days in 2021, indicating a slowdown in receivables collection or changes in credit policy. Following this peak, the DSO decreased markedly to 60.96 days in 2022, implying improvements in receivables management or faster collection cycles. However, the period lengthened again to 63.36 days in 2023 and extended further to 71.28 days in 2024. The recent increase suggests a potential relaxation in credit terms or challenges in collecting receivables, which could impact cash flow.
Number of Days of Payables: The company's payables turnover pattern also presents notable shifts. The average days payable surged from 43.01 days in 2020 to 73.90 days in 2021, indicating a lengthening of the payment cycle, possibly to optimize cash flow or due to extended supplier terms. Following this, the days of payables declined to 58.69 days in 2022, then further to 45.54 days in 2023, and stabilized at 43.89 days in 2024. The recent reduction and stabilization in payables days suggest that the company has been accelerating its payments to suppliers, possibly reflecting improved liquidity or renegotiated payment terms.
Summary: Overall, JBTMarel Corp has demonstrated improvements in inventory management, evidenced by decreasing DOH, which enhances operational efficiency. The receivables collection period showed significant fluctuation but has generally stabilized in recent years, albeit with some extension in the latest period signaling potential collection challenges. The company's payables management indicates a strategic shift towards more prompt payments, which could reflect stronger liquidity or a change in supplier relationships. Collectively, these trends portray a company actively optimizing its working capital components over this period.
Long-term
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Fixed asset turnover | — | — | — | — | — |
| Total asset turnover | 0.50 | 0.61 | 0.60 | 0.65 | 0.96 |
The long-term activity ratios for JBTMarel Corp, as indicated by the fixed asset turnover and total asset turnover ratios, reveal notable insights into the company's utilization efficiency of its assets over the specified periods.
The fixed asset turnover ratio data is not available for all the years, with values listed as "—" from 2020 through 2024, suggesting either a lack of fixed asset base or that the ratio was not calculated or reported during this timeframe. This absence makes it impossible to assess how effectively the company has utilized its fixed assets to generate sales during these years.
Conversely, the total asset turnover ratio demonstrates a declining trend over the period, moving from 0.96 in December 2020 to 0.50 in December 2024. Specifically, there is a noticeable decrease from 2020 to 2021, followed by a gradual decline through 2022 and 2023, culminating in a further slight reduction in 2024. This downward trajectory indicates a reduced efficiency in asset utilization, implying that the company is generating less sales revenue per dollar of total assets over time.
Overall, while data on fixed asset turnover is unavailable, the decline in total asset turnover suggests that JBTMarel Corp has experienced diminishing efficiency in using its total assets to produce sales over the observed period. This trend warrants further investigation into underlying operational or strategic factors that may have contributed to the decreasing asset utilization efficiency.