Medtronic PLC (MDT)
Activity ratios
Short-term
Turnover ratios
| Apr 30, 2025 | Apr 30, 2024 | Apr 26, 2024 | Apr 30, 2023 | Apr 28, 2023 | |
|---|---|---|---|---|---|
| Inventory turnover | 0.00 | 2.15 | 4.68 | 2.03 | 4.42 |
| Receivables turnover | 5.15 | 5.28 | 5.38 | 5.21 | 5.26 |
| Payables turnover | 0.00 | 4.65 | 10.13 | 4.03 | 8.79 |
| Working capital turnover | 3.07 | 2.90 | 2.96 | 2.47 | 2.50 |
The activity ratios of Medtronic PLC provide insights into how efficiently the company is managing its assets and liabilities to generate revenue.
1. Inventory Turnover: This ratio indicates how many times a company sells and replaces its inventory in a given period. Medtronic's inventory turnover has shown fluctuations over the years, ranging from a low of 2.03 to a high of 4.68. A higher turnover ratio generally indicates better inventory management and more efficient use of resources.
2. Receivables Turnover: This ratio measures how effectively a company is collecting on its credit sales. Medtronic has maintained a relatively stable receivables turnover ratio, hovering around 5.2 to 5.3. A higher turnover ratio implies that the company is efficiently collecting payments from customers.
3. Payables Turnover: The payables turnover ratio reflects how quickly a company pays off its suppliers. Medtronic's payables turnover has varied between 4.03 and 10.13, with significant fluctuations. A higher ratio suggests that the company is managing its payables efficiently and may indicate strong vendor relationships or effective cash flow management.
4. Working Capital Turnover: This ratio calculates how effectively a company turns its working capital into revenue. Medtronic's working capital turnover has shown a slight upward trend over the years, indicating improved efficiency in utilizing its working capital. A higher ratio suggests that the company is generating more revenue per unit of working capital employed.
Overall, analyzing these activity ratios helps assess Medtronic's operational efficiency and performance in managing its assets and liabilities to drive revenue growth.
Average number of days
| Apr 30, 2025 | Apr 30, 2024 | Apr 26, 2024 | Apr 30, 2023 | Apr 28, 2023 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | — | 169.78 | 78.03 | 180.24 | 82.57 |
| Days of sales outstanding (DSO) | days | 70.91 | 69.11 | 67.86 | 70.11 | 69.44 |
| Number of days of payables | days | — | 78.43 | 36.04 | 90.65 | 41.53 |
Medtronic PLC's activity ratios provide insights into how efficiently the company manages its inventory, receivables, and payables.
1. Days of Inventory on Hand (DOH):
- In April 2023, Medtronic held its inventory for approximately 82.57 days before it was sold.
- By April 2025, the days of inventory on hand decreased to an unknown value, indicating a potential change in inventory management efficiency.
- Overall, Medtronic's DOH showed a fluctuating trend over the analyzed period, with a significant increase in 180.24 days in April 2023 and a subsequent decrease to 78.03 days in April 2024.
2. Days of Sales Outstanding (DSO):
- Medtronic took around 69.44 days to collect its accounts receivable in April 2023.
- The company's DSO remained relatively stable around 70 days over the analyzed period, indicating a consistent collection period for receivables.
- DSO measures the efficiency of Medtronic's credit and collection policies, with lower values being favorable as they indicate quicker collection of outstanding amounts.
3. Number of Days of Payables:
- In April 2023, Medtronic took approximately 41.53 days to pay its suppliers.
- By April 2025, the days of payables were not available, suggesting a potential change in payment terms or reporting practices.
- A decrease in the number of days of payables from 90.65 days in April 2023 to 36.04 days in April 2024 indicates improved efficiency in managing payables.
Overall, Medtronic's activity ratios highlight the company's ability to manage its working capital effectively. The stability in DSO and improvements in payables turnover suggest efficient management of receivables and payables, despite some fluctuations in inventory management efficiency during the period under review.
See also:
Long-term
| Apr 30, 2025 | Apr 30, 2024 | Apr 26, 2024 | Apr 30, 2023 | Apr 28, 2023 | |
|---|---|---|---|---|---|
| Fixed asset turnover | — | — | 5.38 | 4.72 | 5.66 |
| Total asset turnover | 0.37 | 0.36 | 0.37 | 0.34 | 0.35 |
The fixed asset turnover ratio measures how efficiently a company is utilizing its fixed assets to generate sales. In the case of Medtronic PLC, the fixed asset turnover ratio has shown fluctuations over the past few years. In April 2023, the ratio was 5.66, indicating that Medtronic generated $5.66 in sales for every $1 of fixed assets. This ratio decreased to 4.72 in April 2023 but then improved to 5.38 in April 2024. Unfortunately, data for April 2024 and April 2025 is not available (denoted by "\u2014"), making it difficult to assess recent performance.
On the other hand, the total asset turnover ratio reflects how efficiently a company is using all its assets to generate revenue. Medtronic's total asset turnover ratio has shown relative consistency over the years. In April 2023, the ratio was 0.35, meaning that Medtronic generated $0.35 in revenue for every $1 of assets. This ratio slightly increased to 0.34 in April 2023, further improved to 0.37 in April 2024, and remained at 0.37 in April 2025.
Overall, while the total asset turnover of Medtronic has been relatively steady, the fixed asset turnover has shown more variability, indicating fluctuations in the company's ability to efficiently utilize its fixed assets to drive sales. Understanding these ratios can help assess Medtronic's operational efficiency and asset management effectiveness over time.