Neogen Corporation (NEOG)

Short-term

Turnover ratios

Neogen Corporation's inventory turnover ratio has shown a generally upward trend over the past two years, indicating that the company is more efficient in managing its inventory levels. The company's ability to turn over its inventory has improved from 3.72 times in February 2021 to 5.11 times in February 2024. This suggests that Neogen has been able to sell its inventory more frequently within a given period.

In terms of receivables turnover, the ratio has fluctuated but generally remained at healthy levels, with a minor increase from 7.54 times in August 2021 to 10.47 times in February 2024. This indicates that Neogen is collecting its accounts receivable efficiently.

The payables turnover ratio has varied significantly, demonstrating some inconsistency in the company's ability to manage its trade payables. However, there was a notable increase in payables turnover from 7.85 times in August 2022 to 17.96 times in November 2019, suggesting that Neogen has been able to extend its payables cycle, potentially improving its cash flow position.

Neogen's working capital turnover ratio has generally increased over the past two years, indicating improvements in the company's ability to generate sales from its working capital. The ratio has increased from 1.32 times in May 2021 to 4.09 times in February 2024, showing that Neogen is generating more revenue relative to its working capital.

Overall, Neogen Corporation's activity ratios reflect positive trends in inventory management, accounts receivable collection, and working capital utilization. However, the payables turnover ratio showed some fluctuations, indicating potential variations in the company's payment practices.

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Average number of days

Neogen Corporation's days of inventory on hand (DOH) has shown fluctuating trends over the past several quarters. The company has ranged from 54.87 days to 101.76 days, with a recent DOH of 71.36 days as of Feb 29, 2024. This suggests that Neogen has been able to manage its inventory efficiently in some quarters but may have faced challenges in others.

The days of sales outstanding (DSO) for Neogen have also varied over time, ranging from 28.26 days to 48.38 days. As of Feb 29, 2024, the DSO was at 34.86 days. This indicates that the company takes, on average, around 34.86 days to collect its accounts receivable, which is crucial for maintaining healthy cash flow.

In terms of the number of days of payables, Neogen has seen fluctuations between 19.26 days and 46.48 days. The company's recent data as of Feb 29, 2024, shows 35.11 days of payables. This suggests that Neogen takes around 35.11 days on average to settle its payables.

Overall, the activity ratios of Neogen Corporation indicate that the company has managed its inventory, receivables, and payables efficiently in some periods but has faced challenges in others. Monitoring these ratios is essential for assessing the company's operational efficiency and liquidity management.

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Long-term

Neogen Corporation's long-term activity ratios reveal insights into the efficiency of the company's asset management over time.

Fixed asset turnover has shown a fluctuating trend and has been fairly stable overall. The company's ability to generate sales relative to its investment in fixed assets has ranged from a high of 9.53 to a low of 6.68 in recent periods. This indicates that Neogen is effectively utilizing its fixed assets to generate revenue and is efficient in turning its investment in property, plant, and equipment into sales.

Total asset turnover has displayed a more volatile pattern, with significant variability across periods. The ratio has varied from as low as 0.27 to as high as 1.09, indicating fluctuations in Neogen's ability to generate sales based on its total assets. On average, the company's total assets are generating revenues at a slower pace compared to its fixed assets, suggesting that there may be underutilized assets or inefficiencies in managing its current assets.

Overall, while Neogen Corporation demonstrates efficiency in utilizing its fixed assets to generate sales, there are opportunities for improvement in optimizing the turnover of its total assets to enhance overall operational efficiency and profitability. It may be beneficial for the company to evaluate and potentially streamline its asset management strategies to enhance overall performance and profitability in the long term.