Ingevity Corp (NGVT)

Short-term

Turnover ratios

Based on the provided data for Ingevity Corp, let's analyze the activity ratios:

1. Inventory Turnover:
- The inventory turnover ratio measures how efficiently a company manages its inventory. Ingevity's inventory turnover has been relatively stable over the period, ranging between 3.79 and 7.48.
- A higher turnover ratio indicates that inventory is selling quickly, which is positive for the company. However, a sudden increase or decrease in this ratio could indicate changes in sales patterns or inventory management.

2. Receivables Turnover:
- Unfortunately, the data for receivables turnover is missing for most periods. However, we observe a significant increase from 327.39 to 779.00 from December 31, 2022, to December 31, 2024, indicating an improvement in the collection of receivables.
- A higher receivables turnover ratio implies that the company is collecting its accounts receivable more efficiently.

3. Payables Turnover:
- The payables turnover ratio shows how quickly a company pays its suppliers. Ingevity's payables turnover has fluctuated but generally decreased from 9.57 to 17.96 between March 31, 2020, and December 31, 2024. A lower ratio may suggest a change in payment policies or relationships with suppliers.

4. Working Capital Turnover:
- The working capital turnover ratio indicates how efficiently a company utilizes its working capital to generate sales. Ingevity's working capital turnover has varied but generally improved over time, from 2.52 to 6.12 between March 31, 2020, and December 31, 2024.
- A higher working capital turnover ratio reflects efficient management of working capital to support revenue generation.

Overall, Ingevity Corp's activity ratios depict a mixed performance with some fluctuations over the analyzed periods. It is essential for the company to monitor these ratios regularly to ensure optimal efficiency in managing inventory, receivables, payables, and working capital.

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Average number of days

Based on the provided data, Ingevity Corp's activity ratios can be analyzed as follows:

1. Days of Inventory on Hand (DOH):
- The DOH measures how many days, on average, a company holds its inventory before selling it. Ingevity Corp's DOH has fluctuated over the years, ranging from a high of 97.94 days in June 2023 to a low of 48.77 days in September 2024. A decreasing trend in DOH indicates efficient inventory management, as the company is holding less inventory, which can free up working capital and reduce carrying costs.

2. Days of Sales Outstanding (DSO):
- DSO represents the average number of days it takes for a company to collect revenue after a sale is made. Ingevity Corp's DSO data shows that the company has been able to efficiently collect its receivables, with the DSO decreasing from 45.52 days in December 2020 to as low as 0.47 days in December 2024. A declining DSO indicates that the company is collecting payments faster, which can improve cash flow and liquidity.

3. Number of Days of Payables:
- This ratio measures how long it takes a company to pay its suppliers. Ingevity Corp's number of days of payables has shown variability, ranging from 18.03 days in September 2024 to 51.51 days in June 2023. A lower number of days of payables suggests that the company is paying its suppliers more quickly, which could impact cash flow management and relationships with suppliers.

In summary, Ingevity Corp's activity ratios reflect varying levels of efficiency in managing its inventory, receivables, and payables. Monitoring these ratios over time can provide insights into the company's operational performance and working capital management.

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Long-term

The Fixed Asset Turnover ratio for Ingevity Corp has shown a positive trend over the past few years, indicating an improvement in the company's efficiency in generating sales from its fixed assets. The ratio increased from 1.97 in March 2020 to 2.13 in December 2024, with some fluctuations in between.

On the other hand, the Total Asset Turnover ratio has also increased gradually from 0.55 in March 2020 to 0.69 in December 2024. This indicates that Ingevity Corp has been effectively utilizing its total assets to generate sales revenue during the period under review.

Overall, both ratios demonstrate an upward trend, suggesting that the company is managing its assets efficiently to drive sales growth. The increase in the Fixed Asset Turnover ratio signifies improved utilization of fixed assets, while the rising Total Asset Turnover ratio indicates enhanced efficiency in utilizing all assets to generate revenues over the years.