Merit Medical Systems Inc (MMSI)

Activity ratios

Short-term

Turnover ratios

Dec 31, 2024 Sep 30, 2024 Jun 30, 2024 Mar 31, 2024 Dec 31, 2023 Sep 30, 2023 Jun 30, 2023 Mar 31, 2023 Dec 31, 2022 Sep 30, 2022 Jun 30, 2022 Mar 31, 2022 Dec 31, 2021 Sep 30, 2021 Jun 30, 2021 Mar 31, 2021 Dec 31, 2020 Sep 30, 2020 Jun 30, 2020 Mar 31, 2020
Inventory turnover 3.86 3.71 3.78 3.71 3.63 3.53 3.46 3.57 3.85 4.12 4.29 4.35 4.44 4.79 5.15 4.86 4.95 4.76 4.47 4.35
Receivables turnover 6.51 6.39 6.64 6.58 6.59 6.69 6.47 6.31 6.44 6.79 6.56 6.54 6.29 6.50 6.34 6.05 6.19 6.37 6.49 6.22
Payables turnover 17.26 18.95 20.31 23.23 16.74 21.97 17.14 15.77 14.97 16.07 16.83 17.34 17.73 19.52 18.60 18.39 19.68 21.35 22.28 17.70
Working capital turnover 1.90 1.49 1.31 1.37 1.37 3.05 2.94 3.42 3.71 3.94 3.74 4.00 4.35 4.20 4.29 4.17 3.90 3.84 3.51 3.33

Activity ratios provide insight into how efficiently a company is managing its assets. Let's analyze the activity ratios of Merit Medical Systems Inc based on the provided data:

1. Inventory Turnover:
- The inventory turnover ratio for Merit Medical Systems Inc has fluctuated over the years, ranging from 3.57 to 5.15.
- A higher inventory turnover indicates that the company is selling its inventory quickly, which can be a positive sign of efficient inventory management.

2. Receivables Turnover:
- The receivables turnover ratio has shown a relatively stable trend for Merit Medical Systems Inc, with values ranging from 6.05 to 6.79.
- A consistent receivables turnover ratio indicates that the company is collecting its receivables in a timely manner, reflecting strong credit policies.

3. Payables Turnover:
- The payables turnover ratio has varied for Merit Medical Systems Inc, with values fluctuating between 14.97 and 23.23.
- A higher payables turnover ratio suggests that the company is paying its suppliers quickly, but excessively high values may indicate potential liquidity issues.

4. Working Capital Turnover:
- The working capital turnover ratio for Merit Medical Systems Inc has shown a declining trend over the years, dropping from 4.35 to 1.90.
- A decreasing working capital turnover ratio could suggest inefficiencies in utilizing working capital to generate revenue.

In summary, while Merit Medical Systems Inc has demonstrated efficient inventory management and receivables collection based on the inventory turnover and receivables turnover ratios, the declining trend in the working capital turnover ratio warrants further investigation into the company's operational efficiency and financial performance. Additionally, the fluctuating payables turnover ratio may require attention to maintain optimal supplier relationships and liquidity management.

Average number of days

Dec 31, 2024 Sep 30, 2024 Jun 30, 2024 Mar 31, 2024 Dec 31, 2023 Sep 30, 2023 Jun 30, 2023 Mar 31, 2023 Dec 31, 2022 Sep 30, 2022 Jun 30, 2022 Mar 31, 2022 Dec 31, 2021 Sep 30, 2021 Jun 30, 2021 Mar 31, 2021 Dec 31, 2020 Sep 30, 2020 Jun 30, 2020 Mar 31, 2020
Days of inventory on hand (DOH) days 94.47 98.37 96.46 98.31 100.48 103.32 105.46 102.18 94.70 88.65 85.05 83.83 82.15 76.16 70.93 75.05 73.68 76.68 81.61 83.86
Days of sales outstanding (DSO) days 56.05 57.10 54.95 55.49 55.40 54.57 56.40 57.85 56.65 53.78 55.64 55.79 58.04 56.14 57.58 60.31 58.98 57.31 56.28 58.71
Number of days of payables days 21.14 19.26 17.98 15.71 21.81 16.61 21.29 23.14 24.39 22.72 21.68 21.04 20.59 18.69 19.62 19.85 18.54 17.10 16.38 20.62

The activity ratios of Merit Medical Systems Inc provide insight into the efficiency of the company's operations.

1. Days of Inventory on Hand (DOH): This ratio measures how long it takes for the company to turn its inventory into sales. A higher DOH may indicate excess inventory or slow-moving products, tying up working capital and potentially leading to obsolescence risks. Merit Medical's DOH has been increasing over the years, reaching 94.47 days by December 31, 2024, which may suggest a need for inventory management improvements.

2. Days of Sales Outstanding (DSO): DSO reflects the average time it takes for the company to collect payment from its customers. A higher DSO can indicate potential issues with accounts receivable collection efficiency. Merit Medical's DSO has been relatively stable, ranging between 53.78 days to 57.85 days, implying a consistent approach to credit and collection management.

3. Number of Days of Payables: This ratio indicates how long the company takes to pay its suppliers. An increase in this metric could signal a positive working capital management strategy, as it shows the company is taking longer to pay its bills. Merit Medical's number of days of payables has fluctuated but decreased significantly to 15.71 days by March 31, 2024, possibly indicating a more aggressive payment strategy or improved supplier terms.

Overall, while Merit Medical may benefit from optimizing its inventory holding periods, its stable DSO and effective management of payables suggest a balanced approach to working capital management.

Long-term

Dec 31, 2024 Sep 30, 2024 Jun 30, 2024 Mar 31, 2024 Dec 31, 2023 Sep 30, 2023 Jun 30, 2023 Mar 31, 2023 Dec 31, 2022 Sep 30, 2022 Jun 30, 2022 Mar 31, 2022 Dec 31, 2021 Sep 30, 2021 Jun 30, 2021 Mar 31, 2021 Dec 31, 2020 Sep 30, 2020 Jun 30, 2020 Mar 31, 2020
Fixed asset turnover 3.49 3.37 3.32 3.29 3.24 3.17 3.09 3.01 2.99 3.01 2.99 2.95 2.88 2.81 2.74 2.55 2.50 2.49 2.49 2.57
Total asset turnover 0.56 0.55 0.54 0.54 0.53 0.67 0.65 0.69 0.69 0.69 0.68 0.67 0.65 0.64 0.62 0.58 0.57 0.57 0.56 0.57

Based on the long-term activity ratios provided for Merit Medical Systems Inc, we can see a positive trend in both the Fixed Asset Turnover and Total Asset Turnover ratios over the observation period from March 31, 2020, to December 31, 2024.

1. Fixed Asset Turnover: This ratio indicates the efficiency with which the company is utilizing its fixed assets to generate sales. The Fixed Asset Turnover ratio has shown a consistent improvement, increasing from 2.57 on March 31, 2020, to 3.49 on December 31, 2024. This upward trend suggests that Merit Medical Systems Inc has been effectively using its fixed assets to drive revenue growth over the period.

2. Total Asset Turnover: The Total Asset Turnover ratio measures how effectively the company is utilizing all its assets to generate revenue. The ratio has also displayed an overall positive trend, rising from 0.57 on March 31, 2020, to 0.56 on December 31, 2024. This indicates that Merit Medical Systems Inc has been improving its ability to generate sales relative to its total asset base throughout the period.

In conclusion, the upward trends in both the Fixed Asset Turnover and Total Asset Turnover ratios suggest that Merit Medical Systems Inc has been successful in enhancing its asset utilization efficiency and generating revenue from its asset base more effectively over the observed period.