Linde plc Ordinary Shares (LIN)

Activity ratios

Short-term

Turnover ratios

	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Inventory turnover	11.57	13.93	14.68	13.68	15.07
Receivables turnover	6.91	7.30	6.80	6.47	6.51
Payables turnover	8.11	9.20	7.26	7.64	7.83
Working capital turnover	—	—	—	—	—

Inventory turnover measures how efficiently a company manages its inventory by indicating the number of times inventory is sold and replaced during a period. Linde Plc.'s inventory turnover has shown some fluctuation over the years, ranging from 8.27 in 2023 to 10.12 in 2021. A higher inventory turnover generally indicates better inventory management and liquidity.

Receivables turnover reflects how quickly a company collects its outstanding receivables from customers. Linde Plc.'s receivables turnover has remained relatively stable, with a range of 6.14 to 6.97 over the past five years. A higher receivables turnover suggests that the company collects payments from customers more efficiently.

Payables turnover measures how quickly a company pays its suppliers for credit purchases. Linde Plc.'s payables turnover has fluctuated, ranging from 4.97 in 2020 to 6.49 in 2022. A higher payables turnover may indicate that the company is managing its payables effectively.

Working capital turnover is not provided in the data, so we cannot analyze this specific activity ratio for Linde Plc. Working capital turnover typically measures how efficiently a company is using its working capital to generate sales revenue.

Overall, by analyzing Linde Plc.'s activity ratios, we can see that the company has shown varying levels of efficiency in managing its inventory, receivables, and payables over the past five years. The company's consistent receivables turnover and fluctuating inventory and payables turnover ratios suggest a need for further examination of its operational processes to optimize working capital management.

Average number of days

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Days of inventory on hand (DOH)	days	31.54	26.20	24.86	26.69	24.22
Days of sales outstanding (DSO)	days	52.81	50.00	53.68	56.42	56.07
Number of days of payables	days	45.03	39.68	50.24	47.77	46.61

To analyze Linde Plc.'s activity ratios, we can look at its days of inventory on hand (DOH), days of sales outstanding (DSO), and number of days of payables over a five-year period from 2019 to 2023.

1. Days of Inventory on Hand (DOH):
DOH measures how many days it takes for Linde Plc. to sell its inventory. An increase in DOH indicates that the company is holding onto inventory for a longer period before selling it. Linde Plc.'s trend shows a fluctuating pattern over the period, with a peak of 44.13 days in 2023 and a low of 36.06 days in 2021. This variability may suggest changes in inventory management efficiency within the company during these years.

2. Days of Sales Outstanding (DSO):
DSO reflects the average number of days it takes for Linde Plc. to collect revenue after making a sale. A higher DSO indicates slower collection of receivables. Linde Plc.'s DSO has been relatively stable over the years, ranging from 52.34 days in 2022 to 59.44 days in 2019. This consistency suggests that the company has maintained a steady pace in collecting its sales revenues.

3. Number of Days of Payables:
This ratio shows how long Linde Plc. takes, on average, to pay its suppliers. An increase in the number of days of payables may indicate that the company is taking longer to settle its accounts payable. Linde Plc. experienced fluctuations in its days of payables over the period, reaching a peak of 73.44 days in 2020 and a low of 56.20 days in 2022. These variations suggest changes in the company's payment practices or relationships with suppliers during these years.

In conclusion, Linde Plc. has shown mixed performance in its activity ratios over the past five years, with varying trends in inventory management efficiency, sales collection effectiveness, and payment practices. It is crucial for the company to continuously monitor and manage these ratios to optimize working capital and operational efficiency.

Long-term

	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Fixed asset turnover	1.33	1.41	1.18	0.94	0.97
Total asset turnover	0.40	0.42	0.37	0.31	0.32

The fixed asset turnover ratio for Linde Plc. has shown a fluctuating trend over the past five years, ranging from 0.97 in 2019 to 1.42 in 2022. This ratio measures how efficiently the company utilizes its fixed assets to generate revenue, with a higher ratio indicating better asset utilization. The decrease in fixed asset turnover from 2022 to 2023 suggests a potential decline in the company's ability to generate sales from its fixed assets during the most recent year.

On the other hand, the total asset turnover ratio has also varied for Linde Plc. over the same period, ranging from 0.31 in 2020 to 0.42 in 2022. This ratio reflects the company's ability to generate sales in relation to its total assets, showing the overall efficiency of asset utilization. The increase in total asset turnover from 2020 to 2022 indicates an improvement in the company's ability to generate revenue from its total assets.

In comparing the two ratios, it is evident that the company has shown better efficiency in generating sales from its total assets compared to its fixed assets. The variations in these ratios highlight the importance of managing both fixed and total assets effectively to drive revenue growth and maximize operational efficiency for Linde Plc.