Knowles Cor (KN)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Inventory turnover | 2.70 | 3.34 | 2.88 | 3.32 | 3.79 |
| Receivables turnover | 5.27 | 3.38 | 5.68 | 5.92 | 5.82 |
| Payables turnover | 5.45 | 11.82 | 11.80 | 5.60 | 7.01 |
| Working capital turnover | 3.38 | 1.73 | 2.90 | 4.05 | 6.25 |
Knowles Cor's inventory turnover has been fluctuating over the years, declining from 3.79 in 2020 to 2.70 in 2024. This suggests that the company is managing its inventory less efficiently as it takes longer to sell its inventory.
In terms of receivables turnover, the company's performance has been more stable, ranging from 5.27 in 2024 to 5.92 in 2021. A lower receivables turnover ratio indicates that Knowles Cor is taking longer to collect payments from its customers.
The payables turnover ratio for Knowles Cor has shown significant variation, peaking at 11.82 in 2023. This indicates that the company was able to pay its creditors more frequently in that year. However, the ratio decreased to 5.45 in 2024, suggesting a slowdown in payment to suppliers.
Analyzing the working capital turnover, we see a consistent decline from 6.25 in 2020 to 3.38 in 2024. A lower working capital turnover ratio indicates that the company is using a higher amount of working capital to generate sales, which may signal inefficiencies in managing its working capital.
In conclusion, Knowles Cor should focus on improving inventory management, reducing accounts receivable collection periods, and optimizing its payment cycles to enhance overall operational efficiency and financial performance.
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 | 135.14 | 109.28 | 126.67 | 109.87 | 96.30 |
| Days of sales outstanding (DSO) | days | 69.24 | 108.11 | 64.29 | 61.64 | 62.75 |
| Number of days of payables | days | 67.00 | 30.89 | 30.94 | 65.23 | 52.04 |
Knowles Cor's activity ratios provide insights into how efficiently the company manages its inventory, collects its receivables, and pays its suppliers.
1. Days of Inventory on Hand (DOH):
- The DOH shows how many days it takes for Knowles Cor to convert its inventory into sales.
- The trend indicates an increase in inventory holding period from 96.30 days in 2020 to 135.14 days in 2024.
- This suggests that the company may be experiencing challenges in managing its inventory efficiently or facing slower sales turnover.
2. Days of Sales Outstanding (DSO):
- The DSO metric measures the number of days it takes for Knowles Cor to collect payments from its customers.
- The DSO trend fluctuates, with a peak at 108.11 days in 2023 but generally staying within a reasonable range.
- A high DSO can indicate issues with credit policies or collection efforts, potentially impacting cash flow.
3. Number of Days of Payables:
- This metric represents the average number of days it takes for Knowles Cor to pay its suppliers.
- There is variation in the payables period, with a significant decrease from 65.23 days in 2021 to 30.94 days in 2022.
- A lower payables period may indicate the company is paying its suppliers more quickly, which could strain cash flow.
Overall, the company's activity ratios suggest that it may need to focus on improving inventory management, monitoring receivables collection closely, and finding a balance in supplier payment terms to enhance operational efficiency and cash flow management. Continuously monitoring and optimizing these activity ratios can help Knowles Cor improve its overall financial health.
Long-term
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Fixed asset turnover | 4.25 | 3.19 | 4.73 | 4.32 | 3.99 |
| Total asset turnover | 0.49 | 0.31 | 0.65 | 0.50 | 0.46 |
Knowles Cor's long-term activity ratios show trends in the utilization of fixed assets and total assets over multiple years.
1. Fixed Asset Turnover:
- The fixed asset turnover ratio indicates how efficiently the company is using its fixed assets to generate sales revenue.
- From 2020 to 2024, the trend shows an increase in the fixed asset turnover ratio, starting at 3.99 and reaching a peak of 4.73 in 2022 before dropping to 3.19 in 2023 and rebounding to 4.25 in 2024.
- The increase in the fixed asset turnover ratio from 2020 to 2022 suggests that Knowles Cor improved its efficiency in generating sales from fixed assets. The fluctuations in the following years might indicate changes in asset utilization strategies or external factors affecting operations.
2. Total Asset Turnover:
- The total asset turnover ratio reflects how efficiently the company is utilizing its total assets to generate sales.
- Knowles Cor's total asset turnover ratio showed variations over the five-year period, starting at 0.46 in 2020, increasing to 0.65 in 2022, then dropping to 0.31 in 2023, and finally rising to 0.49 in 2024.
- The fluctuating trend in the total asset turnover ratio indicates changes in the company's overall asset utilization efficiency. The peak in 2022 might suggest improved efficiency in generating sales relative to total assets, while the drop in 2023 and subsequent increase in 2024 could reflect adjustments in operational activities or asset structure.
In summary, the analysis of Knowles Cor's long-term activity ratios reveals trends in the efficiency of utilizing fixed assets and total assets to generate sales revenue, with fluctuations suggesting potential changes in operational strategies or external factors impacting the company's asset turnover performance over the years.