Kadant Inc (KAI)

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 6.14 5.12 4.87 4.77 5.23 4.83 4.42 4.25 3.52 3.66 3.58 3.75 5.10 3.52 3.84 3.65 3.75 3.75 3.86 4.31
Receivables turnover 7.38 6.57 6.65 6.47 7.10 6.72 6.79 — 6.88 — — — 6.67 — — — — — — —
Payables turnover 17.57 17.15 15.52 14.75 18.95 17.92 15.93 13.15 9.92 10.72 10.01 7.95 11.55 8.91 9.94 10.53 12.42 12.49 10.60 10.75
Working capital turnover 4.19 3.85 3.93 4.16 4.21 4.23 4.14 4.01 4.44 4.71 4.76 4.79 4.82 4.13 2.81 3.94 4.05 4.13 4.75 4.33

Kadant Inc's inventory turnover ratio has fluctuated over the reported periods, ranging from 3.52 to 6.14. The average inventory turnover appears to be relatively stable within the range of 4-5 times per year.

The receivables turnover ratio was not available for the earlier periods but showed a consistent upward trend in recent years, reaching around 7.38 by December 31, 2024. This indicates that Kadant Inc has been collecting its receivables more efficiently over time.

In terms of payables turnover, the ratio varied significantly, with values between 7.95 and 18.95. The increasing trend in payables turnover suggests that Kadant Inc has been taking longer to pay its suppliers, which may reflect improved liquidity management or negotiation terms with vendors.

The working capital turnover ratio remained relatively stable over the periods, hovering around 4 on average. This ratio measures how efficiently the company utilizes its working capital to generate sales revenue. Overall, the stability in this ratio indicates consistent efficiency in utilizing working capital throughout the reporting periods.

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 59.42 71.27 75.00 76.54 69.84 75.57 82.61 85.86 103.77 99.61 102.01 97.31 71.64 103.84 95.17 100.09 97.27 97.45 94.58 84.66
Days of sales outstanding (DSO) days 49.48 55.52 54.93 56.41 51.42 54.34 53.73 — 53.05 — — — 54.71 — — — — — — —
Number of days of payables days 20.77 21.28 23.52 24.74 19.26 20.36 22.91 27.76 36.81 34.04 36.47 45.93 31.59 40.99 36.70 34.66 29.38 29.21 34.43 33.95

Based on the data provided, let's analyze Kadant Inc's activity ratios:

1. Days of Inventory on Hand (DOH):
- Kadant Inc's average DOH for the last five quarters is approximately 85 days.
- The company maintained relatively stable inventory levels, with fluctuations ranging from a low of 59.42 days to a high of 103.77 days.
- Lower DOH indicates faster inventory turnover, which may suggest efficient inventory management.

2. Days of Sales Outstanding (DSO):
- Kadant Inc had no DSO data available until December 31, 2021, where it reported 54.71 days.
- Subsequent DSO figures ranged between 49.48 days and 56.41 days until December 31, 2024.
- A lower DSO indicates quicker collection of receivables, improving cash flow and liquidity.

3. Number of Days of Payables:
- The average number of days of payables for Kadant Inc over the last five quarters is approximately 31 days.
- The company has been progressively reducing its payables days, from a high of 45.93 days on March 31, 2022, to a low of 19.26 days on December 31, 2023.
- A lower number of days of payables may indicate stronger bargaining power with suppliers but could also lead to potential cash flow challenges.

Overall, Kadant Inc's activity ratios show efficient inventory management, improving accounts receivable turnover, and a trend towards decreasing payables days, which could potentially impact its working capital management and cash flow in the future.

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 6.24 3.18 3.18 3.16 6.85 3.66 3.62 3.65 3.76 4.00 3.87 3.75 3.55 6.65 8.39 7.82 7.42 7.81 8.04 8.16
Total asset turnover 0.73 0.68 0.68 0.69 0.81 0.82 0.79 0.77 0.78 0.80 0.77 0.73 0.69 0.65 0.67 0.69 0.68 0.70 0.72 0.75

The fixed asset turnover ratio for Kadant Inc has seen fluctuations over the analysis period, starting at a relatively high of 8.16 in March 2020 and gradually declining to 3.16 by March 2024. There was a notable drop in the ratio between December 2021 and March 2022, followed by some recovery, but the ratio generally trended downwards in the latter half of the analysis period. The ratio indicates that Kadant Inc generated $3.16 in revenue for every $1 invested in fixed assets as of March 2024.

On the other hand, the total asset turnover ratio for Kadant Inc was relatively stable, hovering around 0.7 to 0.8 from March 2020 to December 2024. The ratio peaked at 0.82 in September 2023. This ratio reflects that Kadant Inc generated between $0.68 to $0.82 in revenue for every $1 of total assets held during the period.

Overall, the trends in both fixed asset turnover and total asset turnover suggest a shift in efficiency and effectiveness in generating revenue from assets over the analysis period, which could be an area of focus for further evaluation and strategic planning.