Johnson Controls International PLC (JCI)

Activity ratios

Short-term

Turnover ratios

	Sep 30, 2024	Sep 30, 2023	Sep 30, 2022	Sep 30, 2021	Sep 30, 2020
Inventory turnover	12.26	13.72	9.23	10.52	12.59
Receivables turnover	3.73	4.39	4.35	4.11	3.99
Payables turnover	6.42	7.34	5.63	5.78	7.15
Working capital turnover	—	—	56.53	26.54	12.37

Activity ratios provide insights into how efficiently a company manages its assets and liabilities.

1. Inventory Turnover:
Johnson Controls International PLC's inventory turnover has been relatively stable over the last five years, ranging from 9.23 to 13.72 times. This indicates that the company is able to sell its inventory multiple times during the year. A higher turnover ratio signifies efficient inventory management, ensuring that stock doesn't sit idle for too long.

2. Receivables Turnover:
The receivables turnover ratio has also been consistent, varying between 3.73 and 4.39 times. This indicates the number of times receivables are collected and replaced during the year. A higher ratio suggests effective credit management and timely collection of receivables.

3. Payables Turnover:
Johnson Controls International PLC's payables turnover has fluctuated but generally remained within the 5.63 to 7.34 range. A higher payables turnover ratio indicates that the company is paying its suppliers more frequently, potentially taking advantage of discounts or negotiating favorable credit terms.

4. Working Capital Turnover:
The working capital turnover ratio, which was not provided for all years, is a measure of how efficiently working capital is utilized to generate sales revenue. Johnson Controls International PLC's significant increase in working capital turnover from 12.37 to 56.53 indicates that the company has become more efficient in utilizing its working capital to generate revenue.

Overall, the activity ratios suggest that Johnson Controls International PLC is effectively managing its assets and liabilities to support its operations and optimize cash flow.

Average number of days

		Sep 30, 2024	Sep 30, 2023	Sep 30, 2022	Sep 30, 2021	Sep 30, 2020
Days of inventory on hand (DOH)	days	29.77	26.60	39.54	34.69	28.99
Days of sales outstanding (DSO)	days	97.92	83.07	83.83	88.81	91.56
Number of days of payables	days	56.87	49.70	64.80	63.18	51.02

The activity ratios of Johnson Controls International PLC indicate the efficiency of its operations in managing inventory, collecting receivables, and paying suppliers over the past five years.

1. Days of Inventory on Hand (DOH): This ratio measures how quickly the company sells its inventory. From 2020 to 2022, Johnson Controls International PLC showed an increasing trend in its DOH, indicating slower inventory turnover. However, in 2023 and 2024, there was a decrease in DOH, suggesting an improvement in inventory management efficiency.

2. Days of Sales Outstanding (DSO): DSO represents the average number of days it takes for the company to collect payment for its sales. Over the five-year period, Johnson Controls International PLC experienced fluctuations in DSO. While there was an improvement in 2023 compared to 2022, DSO increased in 2024, which may signal potential challenges in collecting receivables promptly.

3. Number of Days of Payables: This ratio reflects how long the company takes to pay its suppliers. Johnson Controls International PLC showed variability in the number of days of payables over the five-year period. In 2022, there was a significant increase in days of payables compared to the prior year, indicating a possible extension in payment terms with suppliers. However, in 2024, there was a further increase in days of payables, suggesting a continued trend of delaying payments to suppliers.

Overall, while improvements were observed in inventory management in recent years, there are potential concerns regarding the collection of receivables and the elongation of payment terms to suppliers. Further analysis of the company's working capital management practices and relationships with customers and suppliers may provide additional insights into its operational efficiency.

Long-term

	Sep 30, 2024	Sep 30, 2023	Sep 30, 2022	Sep 30, 2021	Sep 30, 2020
Fixed asset turnover	9.55	11.25	8.05	7.40	7.30
Total asset turnover	0.54	0.63	0.60	0.57	0.55

Based on the data provided for Johnson Controls International PLC's long-term activity ratios, we can observe the following trends:

1. Fixed Asset Turnover:
- The fixed asset turnover ratio measures how efficiently the company generates revenue from its fixed assets.
- There has been a slight decline in the fixed asset turnover ratio over the last five years, from 11.25 in 2023 to 9.55 in 2024.
- Despite the decrease, the ratio remains relatively high, indicating that the company is effectively utilizing its fixed assets to generate sales.
- A higher fixed asset turnover ratio generally implies better asset utilization and operational efficiency.

2. Total Asset Turnover:
- The total asset turnover ratio reflects how efficiently the company is utilizing all its assets to generate revenue.
- There has been a fluctuating trend in the total asset turnover ratio over the past five years, with a peak in 2023 at 0.63 and a dip in 2020 at 0.55.
- In 2024, the total asset turnover ratio stands at 0.54, indicating that for every dollar of assets, the company generates $0.54 in sales.
- A higher total asset turnover ratio suggests that the company is effectively utilizing its assets to generate sales and is efficiently managing its operations.

Overall, while there have been fluctuations in Johnson Controls International PLC's long-term activity ratios, the company has maintained relatively high levels of asset turnover, suggesting efficient utilization of assets in generating revenue. The slight decline in these ratios in recent years may warrant further investigation to ensure continued operational efficiency and profitability.