Merit Medical Systems Inc (MMSI)

Activity ratios

Short-term

Turnover ratios

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 Dec 31, 2019 Sep 30, 2019 Jun 30, 2019 Mar 31, 2019
Inventory turnover 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 4.35 4.30 4.36 4.27
Receivables turnover 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 5.96 6.14 5.60 5.79
Payables turnover 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 17.95 17.77 16.81 16.44
Working capital turnover 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 3.61 3.34 3.76 3.74

Inventory turnover measures how efficiently a company manages its inventory. Merit Medical Systems, Inc.'s inventory turnover has been relatively stable, ranging from 2.10 to 2.52 over the past eight quarters, with a decrease in recent quarters which may indicate a slower inventory turnover.

Receivables turnover reflects how effectively a company collects payments from customers. Merit Medical's receivables turnover has also been consistent, fluctuating between 6.31 and 6.65, indicating a steady collection process.

Payables turnover shows how quickly a company pays its suppliers. The payables turnover for Merit Medical has been somewhat volatile, ranging from 9.22 to 13.47, with a significant increase in Q3 2023. A higher payables turnover may suggest that the company is paying its suppliers more quickly.

Working capital turnover measures how efficiently a company utilizes its working capital to generate sales. Merit Medical's working capital turnover has remained relatively stable, ranging from 2.96 to 4.02 over the past eight quarters, with a drop in recent quarters which may indicate a decrease in sales relative to working capital.

Overall, Merit Medical Systems, Inc. shows fairly consistent activity ratios over the quarters, with some fluctuations in payables turnover and working capital turnover indicating potential changes in inventory management and payment practices.

Average number of days

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 Dec 31, 2019 Sep 30, 2019 Jun 30, 2019 Mar 31, 2019
Days of inventory on hand (DOH) days 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 84.00 84.97 83.79 85.46
Days of sales outstanding (DSO) days 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 61.26 59.43 65.19 63.09
Number of days of payables days 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 20.33 20.54 21.71 22.20

Activity ratios are essential in evaluating how efficiently a company manages its assets and operations. Let's analyze Merit Medical Systems, Inc.'s activity ratios based on the provided data:

1. Days of Inventory on Hand (DOH):
- The trend over the last eight quarters shows an increasing trend from 139.20 days in Q1 2022 to 173.41 days in Q2 2023, reflecting an increase in the average number of days it takes to sell inventory.
- The rising trend in DOH may indicate that Merit Medical Systems, Inc. is facing challenges in managing its inventory levels efficiently, potentially leading to increased holding costs and obsolete inventory.

2. Days of Sales Outstanding (DSO):
- The DSO ratio shows a fluctuating pattern, ranging from 54.88 days in Q3 2022 to 57.81 days in Q1 2023.
- The DSO measures the average number of days it takes for the company to collect revenue after a sale. The lower the DSO, the faster the company is collecting payments from customers.

3. Number of Days of Payables:
- The number of days of payables has varied over the quarters, with a range from 27.09 days in Q3 2023 to 39.57 days in Q4 2022.
- A higher number of days of payables suggests that Merit Medical Systems, Inc. is taking more time to pay its suppliers, potentially indicating favorable terms or liquidity management.

In summary, the analysis of Merit Medical Systems, Inc.'s activity ratios indicates challenges in managing inventory levels efficiently, variability in collecting payments from customers, and fluctuations in the payment terms to suppliers. Further investigation into inventory management practices, accounts receivable processes, and vendor relationships may be necessary to improve operational efficiency and enhance overall financial performance.

Long-term

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 Dec 31, 2019 Sep 30, 2019 Jun 30, 2019 Mar 31, 2019
Fixed asset turnover 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 2.60 2.62 2.68 2.67
Total asset turnover 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 0.56 0.55 0.54 0.54

The fixed asset turnover ratio measures how efficiently a company is utilizing its fixed assets to generate sales. A higher fixed asset turnover ratio indicates that the company is generating more revenue per dollar invested in fixed assets. In the case of Merit Medical Systems, Inc., the fixed asset turnover has been relatively stable over the past eight quarters, ranging between 2.96 and 3.28. This suggests that the company has been effectively using its fixed assets to generate sales, with a slight improvement in the most recent quarter.

On the other hand, the total asset turnover ratio indicates how efficiently a company is using all of its assets to generate sales. A higher total asset turnover ratio signifies that the company is generating more revenue per dollar of total assets. Merit Medical Systems, Inc.'s total asset turnover ratio has fluctuated over the past quarters, ranging from 0.54 to 0.70. The decline in the most recent quarter to 0.54 indicates that the company may not be efficiently utilizing its total assets to generate sales compared to previous quarters.

Overall, while the company has been effectively utilizing its fixed assets to generate sales consistently, there is some variability in the efficiency of utilizing total assets across quarters, which may warrant further investigation into the company's asset management strategies.