Knowles Cor (KN)

Short-term

Turnover ratios

The activity ratios of Knowles Corp provide insight into the efficiency of the company's operations in managing inventory, receivables, payables, and working capital over the past five years.

1. Inventory turnover: This ratio measures how efficiently the company is managing its inventory by selling and restocking it. A decreasing trend in inventory turnover from 3.70 in 2019 to 2.22 in 2023 may indicate inventory management challenges or slower sales turnover.

2. Receivables turnover: The receivables turnover ratio reflects how quickly the company collects payments from customers. Knowles Corp's receivables turnover has fluctuated slightly over the years, but remained relatively stable, indicating consistent collection practices.

3. Payables turnover: This ratio shows how quickly the company pays its suppliers. The payables turnover ratio has shown some variability over the years, with a significant decrease in 2022 followed by an increase in 2023. This may suggest changes in the company's payment policies.

4. Working capital turnover: The working capital turnover ratio measures how efficiently the company utilizes its working capital to generate sales revenue. Knowles Corp's working capital turnover has shown a decreasing trend since 2020, indicating a decline in the company's ability to generate sales relative to its working capital.

Overall, the analysis of Knowles Corp's activity ratios suggests areas for improvement in managing inventory levels, optimizing receivables and payables management, and enhancing working capital utilization efficiency. Monitoring these ratios and addressing any inefficiencies can help the company improve its overall operational performance and financial health.

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Average number of days

Knowles Corp's activity ratios indicate how efficiently the company manages its inventory, collects receivables, and pays its suppliers.

1. Days of Inventory on Hand (DOH):
- The company's DOH has been increasing over the past five years, indicating that inventory turnover has been slowing down.
- The rising DOH suggests that Knowles Corp is holding onto inventory for longer periods, which can tie up capital and lead to increased holding costs.

2. Days of Sales Outstanding (DSO):
- The DSO has fluctuated over the years, but it has generally remained within a relatively stable range.
- A lower DSO indicates that the company is collecting receivables more quickly, which is positive as it improves cash flow and reduces the risk of bad debts.

3. Number of Days of Payables:
- The trend in the number of days of payables shows some variability but has been relatively consistent in recent years.
- A longer period of payables suggests that Knowles Corp is taking longer to pay its suppliers, which can be beneficial in terms of cash flow management.

Overall, while the company appears to be managing its receivables efficiently, there may be opportunities to optimize inventory management to improve working capital efficiency. Additionally, the relatively stable payables period indicates a consistent approach to managing supplier payments.

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Long-term

Knowles Corp's long-term activity ratios reflect its ability to efficiently utilize its assets to generate sales over time.

The fixed asset turnover ratio has been relatively consistent over the past five years, ranging from 3.99 to 4.73. This indicates that the company is generating revenue efficiently based on its investment in fixed assets, such as property, plant, and equipment. A higher fixed asset turnover ratio suggests that Knowles Corp is effectively utilizing its fixed assets to generate sales.

On the other hand, the total asset turnover ratio has been less consistent, varying from 0.46 to 0.65. This ratio measures the company's ability to generate sales from all its assets, including both fixed and current assets. A lower total asset turnover ratio could indicate that the company is not efficiently utilizing its total assets to generate sales.

Overall, Knowles Corp's fixed asset turnover ratio indicates relatively efficient utilization of fixed assets, while the total asset turnover ratio suggests room for improvement in optimizing the company's overall asset utilization to drive sales.