MKS Instruments Inc (MKSI)

Short-term

Turnover ratios

The activity ratios of MKS Instruments Inc depict the company's efficiency in managing its assets and cash flows.

1. Inventory Turnover:
- The inventory turnover ratio shows how many times the company's inventory is sold and replaced over a period. MKS's inventory turnover has fluctuated over the years but has remained within a relatively stable range, indicating the company efficiently manages its inventory levels.

2. Receivables Turnover:
- The receivables turnover ratio reflects how efficiently the company is collecting cash from its credit sales. MKS's receivables turnover has shown a moderate increase over the years, indicating the company is effectively converting credit sales into cash.

3. Payables Turnover:
- The payables turnover ratio measures how quickly the company pays its suppliers. MKS's payables turnover has varied over the years, potentially indicating changes in the company's payment practices or supplier relationships.

4. Working Capital Turnover:
- The working capital turnover ratio assesses how efficiently the company is using its working capital to generate sales. MKS's working capital turnover has shown a consistent improvement over the years, implying the company effectively utilizes its working capital to support its operations and drive revenue growth.

Overall, the activity ratios of MKS Instruments Inc suggest that the company has maintained a good level of efficiency in managing its inventory, receivables, payables, and working capital to support its business operations and drive profitability.

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Average number of days

MKS Instruments Inc's Days of Inventory on Hand (DOH) measure illustrates the efficiency of managing inventory levels. The trend indicates a fluctuation in inventory management over the years. In 2020, MKS had an inventory turnover cycle of 105.08 days, which reduced to 100.44 days in 2021, indicating a slight improvement in inventory management. However, in 2022, the DOH increased significantly to 128.97 days, reflecting a potential issue with inventory control. The DOH then decreased to 72.49 days in 2023, showing a positive turnaround in managing inventory levels but increased again to 111.82 days in 2024, indicating potential inefficiencies in inventory management that year.

Days of Sales Outstanding (DSO) measures the average number of days it takes to collect revenue after a sale is made. MKS experienced a decrease in DSO from 62.30 days in 2020 to 55.25 days in 2021, indicating improved efficiency in collecting receivables. However, the DSO increased to 77.82 days in 2022, suggesting a potential delay in collecting receivables. In 2023, the DSO decreased to 67.51 days, showing some improvement in collecting payments, but then slightly increased to 63.61 days in 2024.

The Number of Days of Payables metric measures how long a company takes to pay its suppliers. MKS extended its payment cycle from 23.18 days in 2020 to 29.24 days in 2021, indicating a slower payment cycle that year. In 2022, the days of payables increased significantly to 56.24 days, reflecting a further delay in paying suppliers. The payables cycle then decreased to 23.92 days in 2023, suggesting an improvement in managing payables, but increased to 42.70 days in 2024, signifying potential challenges in paying suppliers promptly.

Overall, analyzing MKS Instruments Inc's activity ratios highlights fluctuations in inventory management, collections, and payment cycles, indicating the need for continuous monitoring and potential improvements to enhance operational efficiency and working capital management.

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Long-term

MKS Instruments Inc's fixed asset turnover ratio has shown a consistent trend over the years, increasing from 8.09 in 2020 to a peak of 8.97 in 2021 before declining to 4.22 in 2022 and further to 4.16 in 2023. In 2024, there was a slight uptick to 4.58.

This ratio indicates the company's ability to generate sales from its investments in fixed assets, such as property, plant, and equipment. The decreasing trend from 2021 to 2023 suggests that MKS Instruments may not be utilizing its fixed assets as efficiently as before, resulting in lower sales generated relative to its fixed asset base.

On the other hand, the total asset turnover ratio, which measures how efficiently the company is using all its assets to generate sales, has also shown fluctuations. It increased from 0.59 in 2020 to 0.64 in 2021 before dropping to 0.29 in 2022. Subsequently, there was a slight improvement to 0.36 in 2023 and further to 0.41 in 2024.

The downward trend from 2021 to 2022 indicates that MKS Instruments may have experienced challenges in effectively utilizing its total assets to generate revenue during that period. However, the improvement in 2023 and 2024 suggests some recovery in asset utilization efficiency.

Overall, the trends in both the fixed asset turnover and total asset turnover ratios for MKS Instruments Inc indicate fluctuations in the company's ability to efficiently generate sales from its investments in fixed assets and total assets. Continued monitoring and analysis of these ratios will be essential in assessing the company's operational efficiency and asset management strategies.