Materion Corporation (MTRN)

Short-term

Turnover ratios

Materion Corporation's activity ratios provide insight into how efficiently the company manages its assets and liabilities.

1. Inventory Turnover:
- Materion's inventory turnover ratio decreased from 4.62 in 2020 to 3.64 in 2024. This suggests that the company is holding onto its inventory for a longer period, which may indicate slower sales or excess inventory levels.

2. Receivables Turnover:
- The receivables turnover ratio ranged from 6.73 to 8.51 during the period. An increasing trend indicates that Materion is collecting its receivables more quickly over time, improving its cash flow and liquidity.

3. Payables Turnover:
- Materion's payables turnover ratio decreased from 20.82 in 2020 to 15.16 in 2024. A decreasing trend suggests that the company is taking longer to pay its suppliers, potentially indicating financial strain or changing payment terms.

4. Working Capital Turnover:
- The working capital turnover ratio remained relatively stable, ranging from 3.31 to 3.84. This indicates that Materion effectively utilizes its working capital to generate sales, with a consistent level of efficiency over the years.

Overall, Materion Corporation should closely monitor its inventory turnover and payables turnover ratios to ensure optimal management of its inventory levels and payment cycles. The improvement in receivables turnover is a positive indicator of effective credit management and cash flow optimization.

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Average number of days

Based on the provided data on Materion Corporation's activity ratios, we can analyze the following:

1. Days of Inventory on Hand (DOH):
- The company's DOH has increased steadily over the years, from 79.03 days in 2020 to 100.31 days in 2024.
- This indicates that Materion Corporation is holding inventory for a longer period before selling it, which may tie up capital and lead to higher carrying costs.

2. Days of Sales Outstanding (DSO):
- Materion Corporation's DSO has generally improved over the years, decreasing from 51.73 days in 2020 to 42.90 days in 2024.
- A lower DSO suggests that the company is collecting receivables more efficiently, which is a positive indicator of its ability to manage its accounts receivable effectively.

3. Number of Days of Payables:
- The number of days of payables for Materion Corporation has fluctuated, with a peak in 2023 at 30.52 days.
- A higher number of days of payables may indicate that the company is taking longer to pay its suppliers, which could be a strategic move to manage cash flow or a signal of potential liquidity issues.

Overall, Materion Corporation's activity ratios show a mixed performance. While improvements in DSO reflect efficient collections, the increasing DOH and fluctuating days of payables require further analysis to understand the impact on the company's working capital management and overall financial health.

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Long-term

The fixed asset turnover ratio measures how efficiently a company utilizes its fixed assets to generate revenue. Materion Corporation's fixed asset turnover has shown some fluctuations over the years, ranging from 3.17 in 2023 to 3.87 in 2022. A higher fixed asset turnover generally indicates better efficiency in using fixed assets to generate sales. In Materion's case, the ratio has remained relatively stable around the 3.5 range, suggesting that the company has been effectively utilizing its fixed assets to generate sales.

Total asset turnover, on the other hand, measures how efficiently a company uses its total assets to generate sales. Materion Corporation's total asset turnover ratios have ranged from 0.93 in 2023 to 1.11 in 2020. A higher total asset turnover ratio indicates that the company is generating more sales per dollar of assets. The fluctuations in Materion's total asset turnover ratios indicate varying levels of efficiency in utilizing its total assets to generate revenue over the years.

Overall, while Materion's fixed asset turnover ratio has shown relatively stable performance, its total asset turnover ratio has fluctuated somewhat. Further analysis and comparison with industry benchmarks would provide more insights into Materion Corporation's efficiency in utilizing its assets to drive revenue generation.