Medtronic PLC (MDT)

Short-term

Turnover ratios

Activity ratios help assess how effectively a company manages its assets and liabilities to generate revenue. For Medtronic PLC, the inventory turnover has slightly fluctuated over the past five years, ranging from 4.42 to 5.20, indicating the company's ability to sell its inventory efficiently. The receivables turnover has also varied but remains relatively stable, reflecting how quickly the company collects payments from customers. A higher turnover ratio suggests a shorter collection period.

On the other hand, the payables turnover ratio has shown consistency around 10 over the same period, indicating that Medtronic is efficiently managing its accounts payable by paying off its obligations in a timely manner. A higher payables turnover ratio could signify better negotiating power with suppliers.

Furthermore, the working capital turnover ratio has improved steadily over the years, indicating that Medtronic has been effectively utilizing its working capital to generate revenue. A higher working capital turnover ratio implies that the company is efficiently using its current assets to support sales.

Overall, Medtronic PLC demonstrates consistent performance in managing its inventory, receivables, payables, and working capital effectively to drive its business operations and generate revenue.

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Average number of days

Days of inventory on hand (DOH) for Medtronic PLC have shown fluctuation over the past five years, with the lowest being 70.23 days in April 2021 and the highest at 82.57 days in April 2023. The company's current DOH stands at 78.03 days, indicating that it takes approximately 78 days for Medtronic to sell or use up its inventory, a slightly longer timeframe compared to previous years.

Days of sales outstanding (DSO) have also varied over the years, with a peak of 69.44 days in April 2023 and a low of 61.84 days in April 2020. Currently, DSO is at 67.86 days, suggesting a moderate collection period for receivables. This ratio reflects the average number of days it takes for Medtronic to collect revenue after a sale, which has remained relatively stable over the past five years.

The number of days of payables for Medtronic has seen minimal changes, staying within a narrow range between 34.11 days in April 2020 and 41.53 days in April 2023. The company's current payables period is 36.04 days, indicating that it takes approximately 36 days for Medtronic to pay its suppliers. This stability in payment period suggests consistent and efficient management of trade payables.

Overall, the activity ratios of Medtronic PLC reflect a stable performance in managing inventory, collecting receivables, and paying suppliers over the past five years. The company has maintained a moderate inventory turnover, a consistent collection period, and timely payment practices, contributing to its operational efficiency.

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See also:

Medtronic PLC Short-term (Operating) Activity Ratios

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Long-term

The fixed asset turnover ratio for Medtronic PLC has shown a slight decline from 5.76 in April 2022 to 5.38 in April 2024. This suggests that the company is generating $5.38 in sales for every dollar invested in fixed assets, indicating efficient utilization of fixed assets to generate revenue over the years.

On the other hand, the total asset turnover ratio has been steadily increasing from 0.30 in April 2020 to 0.37 in April 2024. This indicates that the company is generating more sales per dollar of total assets, reflecting improving efficiency in overall asset utilization and generating revenue.

Overall, the trend in both fixed asset turnover and total asset turnover ratios for Medtronic PLC shows a positive pattern of efficiency in utilizing assets to generate sales over the years, with a minor fluctuation in the fixed asset turnover ratio and a consistent upward trend in the total asset turnover ratio.

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See also:

Medtronic PLC Long-term (Investment) Activity Ratios