Materion Corporation (MTRN)

Activity ratios

Short-term

Turnover ratios

Dec 31, 2024 Sep 30, 2024 Jun 30, 2024 Mar 31, 2024 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
Inventory turnover 2.60 3.21 3.22 3.13 3.40 3.33 3.37 3.65 3.81 3.80 2.69 1.71 0.49 0.26 0.39 0.52 0.69 0.54 0.49 0.43
Receivables turnover 8.47 7.70 8.69 8.36 8.48 8.85 8.91 8.30 8.07 11.73 — — 6.73 — — — 2.19 2.03 2.15 2.35
Payables turnover 10.84 11.74 12.72 10.86 11.96 16.16 12.40 12.50 14.92 16.55 9.97 6.40 2.03 1.15 1.42 1.97 3.09 2.01 1.98 1.63
Working capital turnover 3.30 3.04 3.15 3.25 3.60 3.35 3.61 3.80 3.84 5.53 4.80 4.13 3.56 0.91 0.99 1.03 1.08 1.21 0.81 0.89

The activity ratios of Materion Corporation provide valuable insights into the efficiency of the company's operations. Let's analyze each ratio:

1. Inventory Turnover:
Materion Corporation's inventory turnover has shown improvement over the years, increasing from very low levels in early reporting periods to reaching a more favorable range in recent periods. The significant increase in inventory turnover from March 31, 2022, to December 31, 2024, indicates that the company is managing its inventory more efficiently.

2. Receivables Turnover:
The receivables turnover ratio for Materion Corporation fluctuated in the earlier periods but stabilized and improved in the later periods. The sharp increase in receivables turnover from September 30, 2022, to December 31, 2022, suggests that the company has been successful in collecting its receivables more quickly.

3. Payables Turnover:
Materion Corporation's payables turnover ratio has also shown variability, with some fluctuations over the reporting periods. However, there is a general increasing trend in payables turnover, indicating that the company is extending its payment periods, potentially improving cash flow management.

4. Working Capital Turnover:
The working capital turnover ratio for Materion Corporation has been relatively stable over the years. The ratio indicates how efficiently the company is utilizing its working capital to generate sales. The gradual decline in working capital turnover from December 31, 2022, to December 31, 2024, may suggest a slight decrease in operational efficiency during this period.

Overall, Materion Corporation's activity ratios reflect improvements in inventory management, receivables collection, and payables management over time. These ratios highlight the company's ability to enhance operational efficiency and optimize working capital utilization, contributing to its financial performance and sustainability.

Average number of days

Dec 31, 2024 Sep 30, 2024 Jun 30, 2024 Mar 31, 2024 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
Days of inventory on hand (DOH) days 140.36 113.71 113.25 116.55 107.24 109.68 108.23 100.01 95.91 96.09 135.93 213.39 752.35 1,384.99 925.25 696.83 532.64 679.99 744.36 845.78
Days of sales outstanding (DSO) days 43.12 47.43 42.00 43.63 43.07 41.23 40.99 44.00 45.25 31.11 — — 54.24 — — — 166.68 180.08 169.51 155.41
Number of days of payables days 33.68 31.09 28.69 33.61 30.52 22.59 29.44 29.20 24.46 22.06 36.59 57.04 179.68 317.99 256.50 185.14 118.18 181.56 184.78 223.71

Materion Corporation's activity ratios provide insights into the efficiency of its operations in managing inventory, accounts receivable, and accounts payable.

1. Days of Inventory on Hand (DOH): Materion's DOH has shown significant fluctuations over the years, ranging from a high of 1,384.99 days on September 30, 2021, to a low of 95.91 days on December 31, 2022. A decreasing trend in DOH signifies an improvement in inventory management efficiency, as the company is holding inventory for fewer days before selling it.

2. Days of Sales Outstanding (DSO): The DSO metric indicates the average number of days it takes for Materion to collect payments from its customers. Materion managed to reduce its DSO from 180.08 days on September 30, 2020, to 43.12 days on December 31, 2024, showcasing a favorable trend towards quicker collection of accounts receivable.

3. Number of Days of Payables: Materion's payables days illustrate the time the company takes to pay its suppliers and vendors. The company has successfully decreased its payables days from 317.99 days on September 30, 2021, to 33.68 days on December 31, 2024. A lower number of days of payables indicates that Materion is paying its bills more promptly, potentially improving its supplier relationships.

Overall, the decreasing trends in DOH, DSO, and payables days suggest that Materion Corporation has been enhancing its operational efficiency and working capital management over the analyzed periods. These improvements could positively impact the company's cash flow and overall financial performance.

Long-term

Dec 31, 2024 Sep 30, 2024 Jun 30, 2024 Mar 31, 2024 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
Fixed asset turnover 3.21 3.14 3.05 3.00 3.17 3.32 3.40 3.67 3.87 6.58 5.62 4.67 3.68 0.98 1.01 1.09 1.18 1.03 1.32 1.39
Total asset turnover 0.97 0.89 0.89 0.87 0.93 0.94 0.96 1.00 1.03 1.65 1.40 1.17 0.94 0.29 0.31 0.33 0.34 0.28 0.30 0.39

Materion Corporation's Fixed Asset Turnover ratio has shown fluctuations over the period analyzed, starting at 1.39 on March 31, 2020, and gradually declining to 0.98 on September 30, 2021. However, there was a significant increase in efficiency in utilizing fixed assets from December 31, 2021, reaching a peak of 6.58 on September 30, 2022, before gradually stabilizing around 3.00 - 3.21 from March 31, 2024.

In terms of Total Asset Turnover, the company's performance has been relatively low in the early periods, ranging from 0.28 to 0.34 from September 30, 2020, to December 31, 2020. There was a notable improvement starting on December 31, 2021, with the ratio sharply increasing to 0.94 and reaching a peak of 1.65 on September 30, 2022. However, the ratio gradually declined to around 0.87 - 0.97 by December 31, 2024.

Overall, the analysis indicates that Materion Corporation has been progressively improving its efficiency in using both fixed assets and total assets to generate sales revenue. The company witnessed significant increases in asset turnover ratios during the mid to late periods of the analysis, suggesting improved operational effectiveness and resource utilization. It is important for Materion Corporation to sustain this positive trend to ensure continued operational efficiency and profitability in the long term.