Novanta Inc (NOVT)

Activity ratios

Short-term

Turnover ratios

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 Dec 31, 2019 Sep 30, 2019 Jun 30, 2019 Mar 31, 2019
Inventory turnover 4.61 4.49 4.28 4.17 4.06 4.17 4.21 4.40 4.66 4.49 5.39 5.49 5.26 4.96 4.80 4.68 4.51 4.37 4.57 4.80
Receivables turnover 6.31 6.18 6.13 6.18 6.24 5.82 — — 6.10 — — — 7.84 — — — — — — —
Payables turnover 12.04 10.80 10.79 10.52 9.08 8.54 8.38 8.51 8.55 8.26 9.47 9.51 11.35 12.33 11.10 10.82 9.99 11.01 10.35 10.15
Working capital turnover 3.19 3.50 3.19 3.33 3.36 3.37 3.96 3.88 3.71 3.95 2.95 3.10 3.10 3.54 3.37 3.85 3.67 3.62 3.37 3.36

Novanta Inc's inventory turnover ratio shows a consistent improvement over the past quarters, indicating that the company is managing its inventory more efficiently. The receivables turnover ratio has also been relatively stable, suggesting that Novanta is collecting its receivables at a steady pace.

The payables turnover ratio has shown a positive trend, which indicates that Novanta is taking longer to pay its suppliers compared to the previous quarters. This may signify improved cash flow management or possibly renegotiated payment terms with suppliers.

The working capital turnover ratio has fluctuated but remained relatively stable over the quarters. This ratio measures how effectively Novanta is using its working capital to generate revenue. Generally, the higher the ratio, the more efficiently the company is using its working capital.

Overall, Novanta Inc's activity ratios depict a picture of gradually improving efficiency in managing inventory, receivables, payables, and working capital over the quarters analyzed.

Average number of days

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 Dec 31, 2019 Sep 30, 2019 Jun 30, 2019 Mar 31, 2019
Days of inventory on hand (DOH) days 79.19 81.25 85.27 87.61 89.80 87.43 86.63 82.90 78.25 81.21 67.69 66.47 69.42 73.62 76.07 78.05 80.99 83.61 79.85 75.98
Days of sales outstanding (DSO) days 57.84 59.05 59.51 59.06 58.47 62.67 — — 59.85 — — — 46.58 — — — — — — —
Number of days of payables days 30.32 33.80 33.84 34.70 40.21 42.73 43.54 42.91 42.67 44.21 38.53 38.39 32.16 29.60 32.89 33.74 36.52 33.15 35.25 35.97

Novanta Inc's activity ratios indicate the efficiency of its operations in managing inventory, collecting receivables, and paying suppliers.

1. Days of inventory on hand (DOH) measures how many days on average inventory is held before being sold. Novanta has shown a slight improvement in managing its inventory efficiency over the quarters, with a decrease in DOH from 127.10 days in Q4 2022 to 113.17 days in Q4 2023. This implies better control over inventory levels, which could lead to lower holding costs and reduced risk of inventory obsolescence.

2. Days of sales outstanding (DSO) measures the average number of days it takes for the company to collect revenue after making a sale. Novanta has been consistent in collecting receivables efficiently, maintaining DSO around 60 days throughout the quarters. A lower DSO indicates a shorter collection period, which is positive for cash flow and liquidity.

3. Number of days of payables indicates the average number of days it takes for Novanta to pay its suppliers. The company has reduced its payment period over the quarters, with the number of days of payables decreasing from 56.91 days in Q4 2022 to 43.33 days in Q4 2023. This suggests that Novanta is managing its payables more efficiently, potentially benefiting from extended payment terms with suppliers.

Overall, Novanta Inc's activity ratios show improvements in inventory management and payables turnover, along with consistent performance in collecting receivables. Efficient management of these operational aspects is crucial for enhancing profitability and cash flow in the long run.

Long-term

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 Dec 31, 2019 Sep 30, 2019 Jun 30, 2019 Mar 31, 2019
Fixed asset turnover 8.04 8.56 8.56 8.41 8.33 8.86 9.04 8.33 8.06 7.57 7.71 7.67 7.48 7.87 8.11 8.31 8.03 8.17 9.73 9.64
Total asset turnover 0.72 0.74 0.72 0.71 0.69 0.70 0.66 0.62 0.57 0.54 0.70 0.70 0.68 0.70 0.71 0.74 0.72 0.73 0.80 0.83

The fixed asset turnover ratio for Novanta Inc has shown slight fluctuations over the observed quarters, ranging from a high of 9.06 in Q3 2022 to a low of 8.06 in Q4 2023. This ratio measures how efficiently the company is utilizing its fixed assets to generate sales revenue, with higher ratios indicating better asset utilization. Overall, Novanta has maintained a relatively high fixed asset turnover, suggesting effective management of its fixed assets.

On the other hand, the total asset turnover ratio, which measures how efficiently the company is using all its assets to generate sales, has also shown variability but with a slightly increasing trend. The ratio has ranged from 0.62 in Q1 2022 to 0.74 in Q3 2023. A higher total asset turnover ratio signifies that the company is generating more revenue relative to its total assets. Novanta's increasing total asset turnover ratio indicates improved efficiency in utilizing its assets to generate sales over the observed quarters.

In comparing the two ratios, Novanta Inc is more efficient in generating sales revenue relative to its fixed assets than to its total assets. The company's performance in terms of fixed asset turnover has been consistently strong, while its total asset turnover has shown improvement over time. This analysis suggests that Novanta has been effectively managing its assets to drive sales growth and maximize operational efficiency.