Ingevity Corp (NGVT)

Short-term

Turnover ratios

Ingevity Corp's activity ratios indicate the efficiency with which the company manages its assets and liabilities to generate sales and cash flows.

1. Inventory Turnover:
Ingevity Corp's inventory turnover has been quite stable over the years, averaging around 3.70. This ratio indicates that the company is able to sell and replace its inventory approximately 3.70 times a year. A higher turnover ratio suggests efficient inventory management and lower holding costs.

2. Receivables Turnover:
The receivables turnover ratio has shown an increasing trend, reaching 9.30 in 2023. This indicates that the company collects its accounts receivables approximately 9.30 times a year, reflecting effective credit and collection policies. A higher turnover ratio implies a shorter time between credit sales and cash collection.

3. Payables Turnover:
Ingevity Corp's payables turnover has also been relatively steady, averaging around 7.27. This ratio highlights how efficiently the company pays its suppliers by turning over its accounts payable approximately 7.27 times a year. A higher turnover ratio suggests a shorter cash conversion cycle and potential advantage from trade credit terms.

4. Working Capital Turnover:
The working capital turnover ratio has shown fluctuations over the years, indicating variation in how effectively the company utilizes its working capital to generate sales. In 2023, the ratio improved to 5.72, showing that the company generated sales turnover of approximately 5.72 times for each dollar of working capital employed. This ratio is useful for assessing how efficiently working capital is being utilized to generate revenue.

Overall, Ingevity Corp's activity ratios suggest a generally efficient management of its assets and liabilities to support sales generation and cash flow, with improvements in some areas over the years. Analyzing these ratios can provide insights into the company's operational effectiveness and potential areas for further enhancement in working capital and inventory management strategies.

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Average number of days

Ingevity Corp's activity ratios provide insight into the efficiency of its operations in managing its inventory, receivables, and payables.

1. Days of Inventory on Hand (DOH):
- Ingevity Corp's DOH has fluctuated over the years, ranging from 91.91 days in 2020 to 111.34 days in 2022. The decrease in 2020 suggests an improvement in inventory management efficiency, although this metric increased in subsequent years.
- The current DOH of 92.37 days in 2023 indicates that, on average, Ingevity holds inventory for approximately 92 days before turning it over.

2. Days of Sales Outstanding (DSO):
- Ingevity Corp's DSO also varies annually, with a high of 49.18 days in 2022 and a low of 39.26 days in 2023. A lower DSO indicates faster collection of receivables.
- The DSO of 39.26 days in 2023 implies that, on average, it takes Ingevity about 39 days to collect payment from its customers.

3. Number of Days of Payables:
- The number of days of payables has ranged from 44.61 days in 2019 to 58.10 days in 2022. A longer payable period can provide more flexibility in cash management.
- With a current figure of 47.38 days in 2023, Ingevity takes approximately 47 days to pay its suppliers.

Overall, analyzing these activity ratios can help stakeholders assess Ingevity Corp's effectiveness in managing its working capital and optimizing its operations to enhance financial performance.

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Long-term

The long-term activity ratios for Ingevity Corp indicate the efficiency with which the company utilizes its assets to generate sales revenue over a period of time. The fixed asset turnover ratio has shown a consistent improvement from 2019 to 2023, with a value of 2.22 in 2023, indicating that the company is generating $2.22 in sales for every dollar invested in fixed assets. This suggests that Ingevity Corp is efficiently utilizing its fixed assets to generate revenue.

On the other hand, the total asset turnover ratio has also displayed a positive trend over the years, albeit at a slower pace compared to the fixed asset turnover ratio. In 2023, the total asset turnover ratio stands at 0.65, implying that the company is generating $0.65 in sales for every dollar of total assets. This indicates that Ingevity Corp has been effectively utilizing its total assets to drive sales.

Overall, both the fixed asset turnover and total asset turnover ratios suggest that Ingevity Corp has been progressively improving its efficiency in generating sales revenue in relation to its investment in fixed assets and total assets, respectively. These ratios reflect the company's ability to efficiently manage its assets and generate revenue, which can be indicative of its operational effectiveness and long-term sustainability.