Minerals Technologies Inc (MTX)

Short-term

Turnover ratios

Based on the activity ratios provided for Minerals Technologies, Inc., we can assess the efficiency of the company's operations in managing its inventory, receivables, payables, and working capital over the past five years.

1. Inventory Turnover:
- The inventory turnover ratio indicates how efficiently the company manages its inventory by selling and replenishing stock.
- The trend shows a slight fluctuation over the years, with a peak in 2019 at 5.33 and a low in 2022 at 4.76.
- On average, the company turns its inventory over approximately 5 times a year, with a slightly decreasing trend in recent years, which may indicate either improved inventory management or a change in sales patterns.

2. Receivables Turnover:
- The receivables turnover ratio measures how effectively the company collects cash from its credit sales.
- The trend indicates an increasing trend from 2019 to 2023, with the company collecting receivables more frequently each year.
- The average receivable turnover ratio stands at about 5 times per year, showing that the company is efficiently managing its accounts receivable.

3. Payables Turnover:
- The payables turnover ratio signifies how quickly the company pays its suppliers for credit purchases.
- The payables turnover ratio has been relatively stable over the years, hovering around 8 times a year on average.
- A consistently high payables turnover ratio may indicate that the company is efficiently managing its payables and possibly taking advantage of supplier credit terms.

4. Working Capital Turnover:
- The working capital turnover ratio assesses how effectively the company utilizes its working capital to generate revenue.
- The trend shows variability over the years, with a notable increase from 2016 to 2017.
- The working capital turnover ratio indicates that, on average, the company generates revenue approximately 3 times for every dollar of working capital invested.

Overall, the activity ratios demonstrate that Minerals Technologies, Inc. has been overall efficient in managing its inventory, receivables, payables, and working capital. The stability in payables turnover and the increasing trend in receivables turnover suggest effective management of cash flows and operational efficiency in the company's activities.

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Average number of days

Minerals Technologies, Inc. has shown a consistent trend of reducing its Days of Inventory on Hand (DOH) from 2019 to 2023, indicating an improvement in managing its inventory levels efficiently. In 2019, the company had 68.46 days of inventory on hand, which decreased to 71.43 days by the end of 2023. This suggests a more effective inventory management strategy, potentially leading to lower carrying costs and better liquidity.

In terms of Days of Sales Outstanding (DSO), the company has also made progress in collecting its accounts receivable more promptly over the years. The DSO decreased from 76.67 days in 2019 to 67.13 days by the end of 2023. This trend signifies better credit control and potentially indicates a healthier cash flow position for Minerals Technologies, Inc.

The Number of Days of Payables indicates the average number of days a company takes to pay its suppliers. Minerals Technologies, Inc. has managed a relatively stable number of days of payables over the years, ranging from 41.42 days in 2023 to 50.70 days in 2021. This stability may reflect consistent relationships with suppliers or efficient cash management practices.

Overall, the company's activity ratios show improvements in managing inventory and collecting receivables efficiently, which can positively impact its working capital position and overall financial health.

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Long-term

Minerals Technologies, Inc.'s long-term activity ratios show trends in the efficiency with which the company is utilizing its fixed assets and total assets to generate sales over the past five years.

The fixed asset turnover ratio has generally improved over the period, increasing from 1.70 in 2019 to 2.20 in 2023. This indicates that the company is generating more sales revenue per dollar invested in fixed assets. The higher fixed asset turnover suggests that Minerals Technologies, Inc. has been able to efficiently utilize its fixed assets to generate sales, reflecting improved operational efficiency and potentially better production capacity utilization.

On the other hand, the total asset turnover ratio has also shown an increasing trend over the period, rising from 0.58 in 2019 to 0.65 in 2023, indicating that the company is generating more sales revenue per dollar of total assets employed. The upward trend in total asset turnover suggests that Minerals Technologies, Inc. has been more effective in using its total assets, including both fixed and current assets, to drive sales.

Overall, the increasing trends in both fixed asset turnover and total asset turnover ratios suggest that Minerals Technologies, Inc. has been successful in improving its asset utilization efficiency over the years, which is a positive sign for the company's operational performance and potential for generating higher sales from existing assets.