Mettler-Toledo International Inc (MTD)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Inventory turnover | 4.01 | 3.65 | 3.73 | 4.31 | 4.62 |
| Receivables turnover | 5.71 | 5.53 | 5.74 | 5.20 | 5.31 |
| Payables turnover | 7.35 | 6.38 | 5.67 | 7.30 | 6.83 |
| Working capital turnover | 77.12 | 17.24 | 30.27 | 14.25 | 8.47 |
Based on the activity ratios of Mettler-Toledo International, Inc. over the past five years:
1. Inventory turnover: This ratio indicates the efficiency of managing inventory levels. Mettler-Toledo's inventory turnover has ranged from 3.65 to 4.62 times annually, with a slight increase in 2023 compared to the previous year. This suggests that the company is selling its inventory at a faster pace in 2023.
2. Receivables turnover: The receivables turnover ratio measures how efficiently the company collects outstanding receivables. Mettler-Toledo's receivables turnover has been relatively stable, ranging from 5.20 to 5.74 times annually. The increase in 2023 indicates that the company is collecting its receivables more effectively than in the previous year.
3. Payables turnover: This ratio reflects how quickly the company pays its suppliers. Mettler-Toledo's payables turnover has varied from 5.67 to 7.35 times annually, with a notable increase in 2023. A higher payables turnover ratio suggests that the company is managing its payables more efficiently in 2023.
4. Working capital turnover: This metric evaluates the efficiency of using working capital to generate sales. Mettler-Toledo's working capital turnover has shown significant fluctuations, with a substantial increase in 2023 compared to the previous years. The notable surge in 2023 indicates that the company is generating more sales per unit of working capital, reflecting improved efficiency in utilizing its resources.
Overall, the activity ratios of Mettler-Toledo International, Inc. suggest that the company has made improvements in managing its inventory, receivables, payables, and working capital in 2023 compared to the previous years. These results highlight the company's efforts to enhance operational efficiency and optimize its financial performance.
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 | 91.04 | 100.03 | 97.85 | 84.59 | 78.99 |
| Days of sales outstanding (DSO) | days | 63.97 | 66.05 | 63.55 | 70.25 | 68.70 |
| Number of days of payables | days | 49.64 | 57.19 | 64.42 | 49.97 | 53.45 |
Activity ratios provide insights into how efficiently a company manages its assets and liabilities. Let's analyze the activity ratios of Mettler-Toledo International, Inc. over the past five years:
1. Days of Inventory on Hand (DOH):
- The trend for DOH shows an increase from 78.99 days in 2019 to 91.04 days in 2023. This indicates that the company is holding inventory for a longer period.
- A higher DOH could suggest potential issues such as overstocking, slow-moving inventory, or inefficiencies in inventory management.
2. Days of Sales Outstanding (DSO):
- DSO decreased from 68.70 days in 2019 to 63.97 days in 2023. This suggests that the company has been collecting its accounts receivable more quickly.
- A lower DSO indicates better credit control and liquidity, as the company is converting its sales into cash faster.
3. Number of Days of Payables:
- The trend for payables days shows fluctuations, with a decrease from 53.45 days in 2019 to 49.64 days in 2023. This indicates that the company is taking longer to pay its suppliers.
- A lower number of days of payables could indicate a strain on working capital, while a longer payment period may improve cash flow but could strain supplier relationships.
Overall, the analysis of these activity ratios suggests that Mettler-Toledo International, Inc. may need to focus on optimizing its inventory management to reduce DOH, while maintaining a balance between DSO and payables days to ensure efficient working capital management and cash flow.
Long-term
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Fixed asset turnover | 4.72 | 5.03 | 4.65 | 3.86 | 4.02 |
| Total asset turnover | 1.13 | 1.12 | 1.12 | 1.10 | 1.08 |
Mettler-Toledo International, Inc.'s long-term activity ratios indicate how efficiently the company utilizes its assets over a period of time.
The fixed asset turnover ratio, which measures the company's ability to generate revenue from its fixed assets, has been fluctuating over the past five years. It increased from 4.02 in 2019 to 5.03 in 2022 before dropping slightly to 4.72 in 2023. The higher the fixed asset turnover ratio, the better the company is at using its fixed assets to generate sales.
On the other hand, the total asset turnover ratio, which shows how effectively the company uses all its assets to generate revenue, has been relatively stable over the same period. It has stayed close to 1.10, indicating that for every dollar of assets, the company generates around $1.10 of sales.
Overall, the fixed asset turnover ratio suggests that Mettler-Toledo International, Inc. has been efficient in utilizing its fixed assets, with fluctuations possibly indicating changes in the company's asset base or sales volume. Meanwhile, the stable total asset turnover ratio implies that the company has maintained consistent effectiveness in generating revenue from all its assets.