Johnson Controls International PLC (JCI)

Activity ratios

Short-term

Turnover ratios

	Sep 30, 2023	Sep 30, 2022	Sep 30, 2021	Sep 30, 2020	Sep 30, 2019
Inventory turnover	9.25	9.23	10.52	12.59	12.88
Receivables turnover	4.39	4.35	4.11	3.99	3.46
Payables turnover	6.02	5.63	5.78	7.15	6.52
Working capital turnover	—	56.53	26.54	12.37	7.16

Based on the provided data, Johnson Controls International plc's activity ratios can be analyzed as follows:

1. Inventory Turnover:
The inventory turnover ratio indicates the efficiency of inventory management. A higher ratio signifies that the company is selling its inventory more frequently. In the past five years, Johnson Controls International plc's inventory turnover has declined from 8.97 in 2019 to 6.42 in 2023. This suggests a decrease in the speed at which the company is selling its inventory, which could be due to changes in demand, production inefficiencies, or changing sales strategies.

2. Receivables Turnover:
The receivables turnover ratio measures how quickly a company collects cash from its customers. Johnson Controls International plc's receivables turnover has fluctuated over the years, with a slight decrease from 4.58 in 2022 to 4.46 in 2023. This indicates that the company is collecting cash from its customers at a slightly slower pace, which may be a result of changes in credit policy, customer payment behavior, or competitive pressures.

3. Payables Turnover:
The payables turnover ratio reflects the speed at which a company pays its suppliers. Johnson Controls International plc's payables turnover has varied over the years, with an increase from 4.00 in 2022 to 4.18 in 2023. This suggests that the company is taking slightly longer to pay its suppliers, which could be a strategic decision to manage cash flow or negotiate better terms with suppliers.

4. Working Capital Turnover:
The working capital turnover ratio measures the efficiency of a company in utilizing its working capital to generate sales. In 2022, the company had a working capital turnover of 56.72, indicating a significant improvement in using its working capital to generate sales compared to the previous years. However, in 2023, the working capital turnover figure is not available, making it difficult to evaluate the recent trend in this ratio.

In conclusion, the analysis of Johnson Controls International plc's activity ratios provides insights into the company's efficiency in managing inventory, collecting cash from customers, and paying suppliers. It is important to consider the factors influencing these ratios to understand the underlying reasons for the changes observed over the years.

Average number of days

		Sep 30, 2023	Sep 30, 2022	Sep 30, 2021	Sep 30, 2020	Sep 30, 2019
Days of inventory on hand (DOH)	days	39.44	39.54	34.69	28.99	28.34
Days of sales outstanding (DSO)	days	83.07	83.83	88.81	91.56	105.58
Number of days of payables	days	60.64	64.80	63.18	51.02	55.95

Days of inventory on hand (DOH) measures the average number of days it takes for the company to sell its inventory. Johnson Controls International plc's DOH has increased from 40.68 days in 2019 to 56.85 days in 2023, indicating a longer period to sell its inventory. This may suggest issues with inventory management or slowing sales.

Days of sales outstanding (DSO) represents the average number of days it takes for the company to collect its accounts receivable. Johnson Controls International plc's DSO has fluctuated over the years, reaching 81.82 days in 2023. This trend suggests that the company is taking longer to collect its receivables, which could indicate challenges with customer credit or collection processes.

The number of days of payables measures how long it takes the company to pay its suppliers. Johnson Controls International plc's payables period has shown some volatility, with a notable increase from 76.40 days in 2020 to 87.41 days in 2023. This indicates that the company is taking longer to pay its suppliers, potentially indicating cash flow management considerations or negotiations with vendors.

In summary, Johnson Controls International plc's activity ratios reveal potential concerns regarding inventory management, accounts receivable collection, and payable periods. These trends may warrant further investigation into the company's operating efficiency and working capital management.

Long-term

	Sep 30, 2023	Sep 30, 2022	Sep 30, 2021	Sep 30, 2020	Sep 30, 2019
Fixed asset turnover	8.51	8.05	7.40	7.30	7.10
Total asset turnover	0.63	0.60	0.57	0.55	0.56

The long-term activity ratios for Johnson Controls International plc provide valuable insights into the company's efficiency in utilizing its fixed and total assets to generate sales.

The fixed asset turnover ratio has shown a consistent increase over the past five years, reaching 8.54 in 2023 from 7.16 in 2019. This indicates that the company is generating more sales relative to its investment in fixed assets, reflecting efficient management and utilization of long-term assets to drive revenue.

Similarly, the total asset turnover ratio has also exhibited a positive trend, increasing from 0.55 in 2019 to 0.63 in 2023. This suggests that the company is generating more sales in relation to its total assets, signaling effective asset utilization and operational efficiency.

Overall, the improving trend in both fixed asset turnover and total asset turnover ratios indicates that Johnson Controls International plc has been successful in optimizing its long-term assets to generate sales, which bodes well for its long-term operational and financial performance.