Mettler-Toledo International Inc (MTD)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Inventory turnover | 4.52 | 4.01 | 3.65 | 3.73 | 4.31 |
| Receivables turnover | 5.64 | 5.71 | 5.53 | 5.74 | 5.20 |
| Payables turnover | 7.17 | 7.35 | 6.38 | 5.67 | 7.30 |
| Working capital turnover | 150.56 | 77.12 | 17.24 | 30.27 | 14.25 |
Mettler-Toledo International Inc's activity ratios provide insights into how effectively the company is managing its assets and liabilities to generate sales. Let's analyze each ratio:
1. Inventory Turnover:
- The inventory turnover ratio indicates how many times a company sells its average inventory in a year. In this case, Mettler-Toledo International Inc's inventory turnover has been fluctuating but generally decreasing from 4.31 in 2020 to 4.52 in 2024. A decreasing trend may suggest slower sales or excess inventory.
2. Receivables Turnover:
- The receivables turnover ratio measures how efficiently a company collects payments from its customers. Mettler-Toledo International Inc's receivables turnover has been relatively stable, ranging from 5.20 in 2020 to 5.74 in 2021 and then slightly decreasing to 5.64 in 2024. A stable ratio indicates consistent collection practices.
3. Payables Turnover:
- The payables turnover ratio reflects how quickly a company pays its suppliers. Mettler-Toledo International Inc's payables turnover decreased from 7.30 in 2020 to 5.67 in 2021, then increased to 7.17 in 2024. A fluctuating trend may indicate changes in payment terms or supplier relationships.
4. Working Capital Turnover:
- The working capital turnover ratio shows how efficiently a company utilizes its working capital to generate sales. Mettler-Toledo International Inc's working capital turnover increased significantly from 14.25 in 2020 to 150.56 in 2024, indicating a substantial improvement in utilizing working capital to drive revenue growth.
Overall, analyzing these activity ratios can give valuable insights into Mettler-Toledo International Inc's operational efficiency, inventory management, collection practices, payment terms, and working capital utilization over the years. Further qualitative analysis would be needed to understand the factors driving these trends and their implications for the company's financial performance.
Average number of days
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 80.77 | 91.04 | 100.03 | 97.85 | 84.59 |
| Days of sales outstanding (DSO) | days | 64.77 | 63.97 | 66.05 | 63.55 | 70.25 |
| Number of days of payables | days | 50.93 | 49.64 | 57.19 | 64.42 | 49.97 |
The Days of Inventory on Hand (DOH) for Mettler-Toledo International Inc have shown a gradual increase over the five-year period from 84.59 days as of December 31, 2020, to 80.77 days as of December 31, 2024. This indicates that the company is taking longer to convert its inventory into sales, which may tie up more of its capital in inventory.
On the other hand, the Days of Sales Outstanding (DSO) have decreased from 70.25 days as of December 31, 2020, to 64.77 days as of December 31, 2024. A declining DSO suggests that the company is collecting its receivables more quickly, which is a positive indicator of efficient accounts receivable management.
The Number of Days of Payables remained relatively stable over the period, ranging from 49.64 days to 64.42 days. This consistency indicates that the company is maintaining a steady payment pattern to its suppliers.
In summary, while Mettler-Toledo has shown an increase in its inventory holding period, it has improved its accounts receivable management efficiency and maintained a consistent approach to accounts payables over the five-year period.
Long-term
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Fixed asset turnover | 5.03 | 4.72 | 5.03 | 4.65 | 3.86 |
| Total asset turnover | 1.20 | 1.13 | 1.12 | 1.12 | 1.10 |
Mettler-Toledo International Inc's long-term activity ratios reflect the efficiency of the company in utilizing its assets. The Fixed Asset Turnover ratio has shown a consistent improvement from 3.86 in 2020 to 5.03 in 2022, with a slight dip in 2023 before rebounding to 5.03 in 2024. This indicates that the company is generating more revenue per dollar invested in fixed assets over the years, reflecting improved asset utilization efficiency.
Furthermore, the Total Asset Turnover ratio has also shown a positive trend, increasing from 1.10 in 2020 to 1.20 in 2024. This signifies that Mettler-Toledo International Inc has been successful in generating revenue relative to its total assets, illustrating effective management of both fixed and current assets to drive sales.
Overall, the increasing trend in both Fixed Asset Turnover and Total Asset Turnover ratios indicates that the company is efficiently managing its asset base to generate sales revenue, which is a favorable sign of operational efficiency and productivity.