Motorola Solutions Inc (MSI)

Activity ratios

Short-term

Turnover ratios

	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Inventory turnover	8.22	6.29	7.31	10.65	12.61
Receivables turnover	5.63	5.79	5.65	5.13	5.29
Payables turnover	7.72	6.24	6.77	8.84	9.12
Working capital turnover	—	12.76	5.89	8.62	10.25

Activity ratios provide insights into how efficiently a company is managing its assets and liabilities. Let's analyze the activity ratios of Motorola Solutions Inc over the past five years:

1. Inventory Turnover:
Motorola Solutions Inc's inventory turnover has shown fluctuation over the years, ranging from 4.63 to 8.85 times. Higher inventory turnover indicates that the company is selling its products quickly, which is generally seen as positive. The improvement in inventory turnover from 2020 to 2021 and the subsequent decrease might suggest changes in the company's inventory management processes.

2. Receivables Turnover:
The receivables turnover for Motorola Solutions Inc has been relatively stable over the years, hovering between 5.33 and 5.90 times. This suggests that the company efficiently collects payments from its customers. A consistent receivables turnover ratio indicates that the company has a good credit control system in place.

3. Payables Turnover:
Motorola Solutions Inc's payables turnover has shown a varying trend, with values ranging from 3.80 to 5.08 times. A higher payables turnover ratio indicates that the company is efficiently managing its payments to suppliers. The increase in payables turnover from 2021 to 2023 might indicate a more efficient use of trade credit.

4. Working Capital Turnover:
The working capital turnover ratio provides insights into how well a company utilizes its working capital to generate sales. Motorola Solutions Inc did not report the working capital turnover for 2023, but in the previous years, the company showed a positive trend, with values ranging from 6.06 to 13.11 times. A higher working capital turnover ratio indicates that the company is generating more sales for each dollar of working capital deployed.

In conclusion, Motorola Solutions Inc has shown varying trends in its activity ratios over the past five years. Overall, the company has demonstrated efficiency in managing its inventory, receivables, payables, and working capital to support its operations and generate sales.

Average number of days

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Days of inventory on hand (DOH)	days	44.40	58.06	49.92	34.27	28.95
Days of sales outstanding (DSO)	days	64.83	63.01	64.62	71.20	68.96
Number of days of payables	days	47.30	58.45	53.91	41.28	40.02

Days of inventory on hand (DOH) measures how many days a company takes to sell its average inventory. A lower DOH indicates that the company is efficiently managing its inventory. Motorola Solutions Inc's DOH has been fluctuating over the past five years, with a peak of 78.86 days in 2022 and a low of 41.24 days in 2019. In 2023, the DOH decreased to 60.27 days, suggesting a slight improvement in inventory turnover efficiency.

Days of sales outstanding (DSO) reflects the average number of days a company takes to collect revenue after a sale. A lower DSO indicates that the company is efficient in collecting its accounts receivable. Motorola Solutions Inc's DSO has shown some variation, with a peak of 68.43 days in 2020 and a low of 61.91 days in 2021. In 2023, the DSO increased slightly to 64.02 days, which may indicate a slower collection of receivables compared to the previous year.

Number of days of payables evaluates how long a company takes to pay its suppliers. A higher number of days of payables indicates that the company is taking longer to settle its payables. Motorola Solutions Inc's days of payables have fluctuated over the years, reaching a peak of 95.95 days in 2021 and a low of 71.87 days in 2019. In 2023, the days of payables decreased to 74.41 days, suggesting an improvement in the company's payment process to suppliers.

Overall, the trend in Motorola Solutions Inc's activity ratios indicates some fluctuations in inventory management, accounts receivable collection, and payment to suppliers. However, the company's recent performance in managing inventory and payables has shown some improvement in 2023. Further analysis and monitoring of these ratios are recommended to ensure efficient working capital management.

Long-term

	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Fixed asset turnover	10.06	9.57	7.62	7.07	7.64
Total asset turnover	0.73	0.69	0.65	0.66	0.71

Motorola Solutions Inc's long-term activity ratios provide insights into how effectively the company is utilizing its assets to generate sales. The fixed asset turnover ratio has shown a generally increasing trend over the past five years, indicating that the company is generating more revenue per fixed asset invested. This suggests improving efficiency in utilizing its long-term assets such as property, plant, and equipment.

On the other hand, the total asset turnover ratio has fluctuated over the same period, with a slight overall decrease. This ratio measures the company's ability to generate sales from all its assets, including both short-term and long-term assets. Despite the fluctuations, the total asset turnover remains relatively stable, indicating that the company is efficiently using its total assets to generate revenue.

Overall, these ratios suggest that Motorola Solutions Inc has been effectively managing its long-term assets to drive sales growth, with a particularly notable improvement in the utilization of fixed assets over the years. However, there may be opportunities for the company to further optimize its total asset turnover to increase overall efficiency in generating revenue from all its assets.