Quaker Chemical Corporation (KWR)

Activity ratios

Short-term

Turnover ratios

	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	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019
Inventory turnover	7.54	7.68	7.01	6.59	6.72	5.66	5.62	5.66	6.19	6.19	6.16	6.65	7.38	8.32	8.21	7.40	6.32	5.35	8.27	8.54
Receivables turnover	4.23	4.24	4.18	3.93	3.98	4.04	3.93	3.88	4.04	3.87	3.81	3.50	3.71	4.13	4.53	3.60	2.99	2.55	4.02	4.15
Payables turnover	9.54	10.13	9.95	8.93	9.87	8.57	7.15	6.68	7.22	7.19	6.81	6.45	7.22	8.60	10.95	7.40	6.73	5.37	8.32	8.70
Working capital turnover	3.36	3.08	2.98	2.88	2.94	3.01	2.83	3.32	3.55	3.47	3.41	3.32	3.38	3.67	2.40	2.32	3.16	2.50	3.27	3.54

Quaker Houghton's activity ratios provide insights into the efficiency of the company's management of its major operational assets.

1. Inventory Turnover: This ratio indicates the number of times inventory is sold and replaced over a period. Quaker Houghton's inventory turnover has been consistently increasing, from 4.67 in Q4 2022 to 5.34 in Q4 2023. This trend suggests that the company is managing its inventory more efficiently and selling products at a faster pace.

2. Receivables Turnover: The receivables turnover ratio measures how quickly the company collects outstanding receivables. Quaker Houghton's receivables turnover has remained relatively stable, ranging from 4.08 in Q1 2023 to 4.41 in Q3 2023. A consistent turnover ratio indicates that the company is effectively managing its credit sales and collecting on them promptly.

3. Payables Turnover: This ratio reflects how quickly the company pays its suppliers. Quaker Houghton's payables turnover has fluctuated but generally increased over the quarters, from 4.81 in Q1 2022 to 6.75 in Q4 2023. This suggests that the company is taking longer to pay its suppliers, potentially improving cash flow management or negotiating more favorable credit terms.

4. Working Capital Turnover: The working capital turnover ratio shows how efficiently working capital is being utilized to generate sales. Quaker Houghton's working capital turnover has varied, with a decrease in Q1 2023 compared to previous quarters. A lower ratio may indicate that the company is using its working capital less efficiently in generating revenue.

Overall, Quaker Houghton's activity ratios show improvements in inventory turnover and payables turnover, indicating better management of inventory and supplier payments. However, the stability in receivables turnover and a slight decline in working capital turnover may warrant further monitoring to ensure optimal utilization of assets.

Average number of days

		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	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019
Days of inventory on hand (DOH)	days	48.43	47.55	52.06	55.37	54.31	64.50	65.00	64.48	58.97	58.95	59.25	54.92	49.46	43.89	44.47	49.30	57.78	68.24	44.15	42.76
Days of sales outstanding (DSO)	days	86.27	86.10	87.30	92.85	91.76	90.36	92.96	94.06	90.32	94.28	95.87	104.16	98.31	88.44	80.55	101.51	121.91	143.06	90.69	88.04
Number of days of payables	days	38.27	36.04	36.70	40.87	36.99	42.57	51.08	54.61	50.53	50.79	53.59	56.57	50.53	42.42	33.34	49.33	54.20	67.98	43.87	41.93

In analyzing Quaker Houghton's activity ratios, we first look at the Days of Inventory on Hand (DOH). The trend indicates that the company has been able to reduce the number of days inventory is held from Q1 2022 (89.62 days) to Q4 2023 (68.41 days). This could imply more efficient management of inventory levels.

Moving on to the Days of Sales Outstanding (DSO), there is a slight fluctuation in the average collection period from Q1 2022 (92.68 days) to Q4 2023 (83.14 days). This may suggest that the company's efficiency in collecting receivables has improved, resulting in a shorter collection period.

Lastly, looking at the Number of Days of Payables, we see that the company has been able to maintain a relatively stable payment period to suppliers, with a slight decrease from Q1 2022 (75.90 days) to Q4 2023 (54.07 days). This could indicate more favorable payment terms with suppliers or better cash management practices.

Overall, Quaker Houghton's activity ratios show improvements in managing inventory, collecting receivables more efficiently, and maintaining stable payment terms with suppliers over the analyzed periods.

Long-term

	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	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019
Fixed asset turnover	9.06	9.63	9.28	9.34	9.47	9.91	9.49	9.03	8.81	8.80	8.20	7.37	6.79	7.44	7.22	6.37	5.27	4.63	10.25	10.48
Total asset turnover	0.69	0.69	0.68	0.66	0.67	0.66	0.62	0.59	0.59	0.57	0.54	0.50	0.48	0.51	0.47	0.44	0.39	0.35	1.17	1.22

Quaker Houghton's long-term activity ratios, specifically the fixed asset turnover and total asset turnover, provide insights into how efficiently the company is utilizing its assets to generate revenue. The fixed asset turnover ratio remained relatively stable over the past eight quarters, ranging from 9.16 to 10.12. This indicates that the company is effectively generating sales from its fixed assets, such as property, plant, and equipment.

Furthermore, the total asset turnover ratio increased gradually from 0.60 in Q1 2022 to 0.72 in Q4 2023. This signifies that Quaker Houghton has been improving its overall asset utilization efficiency, generating more sales for each dollar invested in assets. The consistent improvement in total asset turnover suggests that the company is effectively managing its working capital, inventory, and fixed assets to drive revenue growth.

Overall, the long-term activity ratios of Quaker Houghton reflect positive trends in asset utilization efficiency, indicating the company's ability to effectively leverage its assets to support revenue generation and business operations.