Mattel Inc (MAT)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Inventory turnover | 9.04 | 5.62 | 6.38 | 8.35 | 9.62 |
| Receivables turnover | 4.90 | 6.08 | 4.74 | 4.22 | 4.60 |
| Payables turnover | 11.68 | 10.66 | 8.56 | 8.91 | 10.37 |
| Working capital turnover | 2.98 | 3.39 | 3.98 | 3.83 | 4.43 |
Inventory Turnover Analysis:
Mattel Inc's inventory turnover has fluctuated over the past five years, indicating varying efficiency in managing its inventory levels. The ratio increased significantly from 2021 to 2023, suggesting that the company may have improved its inventory management processes. A higher inventory turnover generally indicates that the company is selling its products more quickly, which can lead to lower carrying costs and potentially higher profitability.
Receivables Turnover Analysis:
The receivables turnover ratio measures how efficiently Mattel Inc collects outstanding credit sales. The downward trend in the ratio from 2020 to 2023 indicates that the company may be taking longer to collect its receivables. This could potentially point to issues with credit policies, customer payment practices, or accounting issues, which might impact cash flow and liquidity.
Payables Turnover Analysis:
The payables turnover ratio reflects how quickly Mattel Inc pays its suppliers. The increasing trend in the ratio over the five-year period suggests that the company is taking longer to pay its suppliers. While extending payment terms can improve cash flow, it may also strain supplier relationships if not managed carefully. An increasing payables turnover could also indicate that the company is effectively managing its working capital.
Working Capital Turnover Analysis:
The working capital turnover ratio indicates how effectively Mattel Inc converts its working capital into sales revenue. The decreasing trend in this ratio from 2019 to 2023 suggests that the company may be less efficient in utilizing its working capital to generate revenue. A lower ratio might imply that the company is holding excess working capital, which could impact profitability and overall financial performance.
In conclusion, analyzing Mattel Inc's activity ratios reveals fluctuations and trends that can provide insights into the company's operational efficiency, inventory management, liquidity, and working capital utilization. Further examination and consideration of industry benchmarks would be beneficial to assess the company's performance in a broader context.
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 | 40.38 | 64.91 | 57.19 | 43.71 | 37.96 |
| Days of sales outstanding (DSO) | days | 74.45 | 60.04 | 76.99 | 86.43 | 79.42 |
| Number of days of payables | days | 31.24 | 34.23 | 42.62 | 40.97 | 35.19 |
Analyzing the activity ratios of Mattel Inc over the past five years provides insights into the efficiency of the company's inventory management, receivables collection, and payables process.
1. Days of Inventory on Hand (DOH):
- Mattel Inc's DOH has fluctuated over the years, ranging from 37.96 days in 2019 to 64.91 days in 2022. A lower DOH indicates that the company is selling its inventory more quickly, while a higher DOH suggests slower turnover. The decrease in DOH from 2022 to 2023 (64.91 days to 40.38 days) is a positive sign, indicating improved inventory management efficiency and potentially better demand forecasting.
2. Days of Sales Outstanding (DSO):
- The DSO metric reflects how long it takes for the company to collect payments from its customers. Mattel Inc's DSO has varied, with the lowest being 60.04 days in 2022 and the highest at 86.43 days in 2020. A decreasing DSO is preferable as it indicates faster collection of receivables. The increase in DSO from 2022 to 2023 (60.04 days to 74.45 days) suggests a potential delay in receivables collection, which may require closer monitoring of credit policies and customer payment terms.
3. Number of Days of Payables:
- This ratio measures how long it takes for the company to pay its suppliers. Mattel Inc's number of days of payables has fluctuated over the years, with a decrease from 42.62 days in 2021 to 31.24 days in 2023. A shorter payables period implies quicker payment to suppliers but could also indicate potential liquidity constraints. The decrease in payables days from 2021 to 2023 suggests a more efficient payment cycle, but it's essential to ensure that it doesn't strain the company's cash flow position.
Overall, while Mattel Inc has shown improvements in certain activity ratios such as DOH and payables days, there are areas, like DSO, where there is room for enhancement. Continued monitoring and analysis of these activity ratios are crucial for assessing the company's operational efficiency and working capital management.
Long-term
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Fixed asset turnover | 11.39 | 11.15 | 11.15 | 9.22 | 7.82 |
| Total asset turnover | 0.82 | 0.85 | 0.80 | 0.79 | 0.81 |
The fixed asset turnover for Mattel Inc has shown a consistent upward trend over the past five years, increasing from 7.82 in 2019 to 11.39 in 2023. This indicates that the company is generating more sales revenue relative to its investment in fixed assets, which is a positive sign of operational efficiency and asset utilization.
On the other hand, the total asset turnover has fluctuated slightly over the same period, with a dip in 2021 followed by a slight recovery in 2022 and 2023. The ratio is below 1, indicating that Mattel Inc is generating less revenue relative to its total assets. While this may suggest lower efficiency in utilizing all assets, the improvement in 2023 could be a positive sign of better overall asset management.
In conclusion, while the fixed asset turnover demonstrates improving efficiency in generating sales from fixed assets, the total asset turnover suggests room for potential optimization in utilizing all assets to generate revenue.