Matthews International Corporation (MATW)
Activity ratios
Short-term
Turnover ratios
| Sep 30, 2024 | Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | |
|---|---|---|---|---|---|
| Inventory turnover | 5.32 | 5.00 | 5.50 | 5.97 | 5.71 |
| Receivables turnover | 8.72 | 9.06 | 7.97 | 5.39 | 5.08 |
| Payables turnover | 11.68 | 11.40 | 10.22 | 10.02 | 12.07 |
| Working capital turnover | 9.08 | 7.42 | 8.11 | 6.19 | 5.79 |
Matthews International Corporation's activity ratios provide insight into how efficiently the company manages its assets and liabilities to generate sales.
1. Inventory turnover: The trend of inventory turnover has been relatively consistent over the past five years, ranging from 5.00 to 5.97 times per year. This indicates that the company is effectively managing its inventory levels, with a higher turnover ratio suggesting efficient inventory management.
2. Receivables turnover: Matthews International Corporation has shown a fluctuating trend in receivables turnover, reaching a peak of 9.06 in 2023 and then decreasing to 8.72 in 2024. A higher turnover ratio indicates that the company is collecting its accounts receivable more quickly. The recent decrease could imply that the company's credit policies have become less stringent or that customers are taking longer to pay their debts.
3. Payables turnover: The payables turnover ratio has shown a relatively stable trend, ranging from 10.02 to 12.07. A higher turnover ratio suggests that the company is paying its suppliers more frequently. This could indicate efficient management of payables or favorable credit terms with suppliers.
4. Working capital turnover: Matthews International Corporation's working capital turnover has shown an increasing trend over the past five years, indicating improved efficiency in generating sales revenue relative to working capital employed. A higher turnover ratio suggests that the company is effectively utilizing its working capital to drive sales growth.
Overall, the activity ratios suggest that Matthews International Corporation is effectively managing its inventory, receivables, payables, and working capital to drive sales and improve efficiency over time.
Average number of days
| Sep 30, 2024 | Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 68.58 | 72.93 | 66.35 | 61.12 | 63.88 |
| Days of sales outstanding (DSO) | days | 41.87 | 40.27 | 45.77 | 67.67 | 71.91 |
| Number of days of payables | days | 31.24 | 32.02 | 35.72 | 36.44 | 30.25 |
The activity ratios for Matthews International Corporation provide insights into the efficiency of the company's operations in managing inventory, collecting receivables, and paying its suppliers.
1. Days of Inventory on Hand (DOH):
- The trend in DOH indicates a slight increase from 2020 to 2023, followed by a decrease in 2024.
- In 2024, the company held inventory for an average of 68.58 days, which is a decrease compared to the previous year.
- A lower DOH implies that the company is managing its inventory more efficiently by either selling inventory quicker or reducing excess stock levels.
2. Days of Sales Outstanding (DSO):
- DSO decreased from 2020 to 2021, indicating more efficient collection of receivables.
- However, there was an increase in DSO in 2022, which improved in 2023 and 2024.
- In 2024, the company took 41.87 days on average to collect receivables, suggesting good management in collecting payments from customers in a timely manner.
3. Number of Days of Payables:
- There was a fluctuating trend in the number of days of payables over the five-year period.
- In 2024, the company took 31.24 days on average to pay its suppliers, showing a decrease compared to the previous year.
- A lower number of days of payables indicates that the company is paying its suppliers faster, which may impact cash flow management.
Overall, the improvements in DSO and DOH, along with a decrease in the number of days of payables in 2024, suggest that Matthews International Corporation has been more efficient in managing its working capital cycle, which is a positive indication of operational efficiency.
Long-term
| Sep 30, 2024 | Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | |
|---|---|---|---|---|---|
| Fixed asset turnover | 7.10 | 7.25 | 7.18 | 7.91 | 6.33 |
| Total asset turnover | 0.98 | 1.00 | 0.94 | 0.82 | 0.72 |
The long-term activity ratios of Matthews International Corporation, specifically the fixed asset turnover and total asset turnover, provide insights into the company's efficiency in generating sales relative to its fixed and total assets, respectively.
The fixed asset turnover ratio has been relatively stable over the past five years, ranging from 6.33 to 7.91. This indicates that the company is effectively utilizing its fixed assets to generate revenue, with higher ratios suggesting greater efficiency in asset utilization.
On the other hand, the total asset turnover ratio has also shown consistent improvement over the years, increasing from 0.72 in 2020 to 0.98 in 2024. This trend indicates that Matthews International Corporation has been progressively utilizing its total assets more efficiently to generate sales.
Overall, the company's long-term activity ratios suggest strong operational efficiency and effective management of assets to drive revenue generation.