Novanta Inc (NOVT)

Activity ratios

Short-term

Turnover ratios

Dec 31, 2024 Sep 30, 2024 Jun 30, 2024 Mar 31, 2024 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
Inventory turnover 5.21 4.77 4.45 4.34 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
Receivables turnover 6.29 5.60 6.19 5.91 6.31 6.18 6.13 6.18 6.24 5.82 — — 6.10 — — — 7.84 — — —
Payables turnover 9.81 10.68 10.03 9.82 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
Working capital turnover 3.57 3.28 3.31 3.21 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

The activity ratios of Novanta Inc provide insights into how efficiently the company manages its resources related to inventory, receivables, payables, and working capital turnover.

1. Inventory Turnover:
Novanta Inc's inventory turnover has shown a fluctuating trend over the years, ranging between 4.06 to 5.49. Generally, a higher inventory turnover ratio indicates that the company is efficiently managing its inventory levels and selling products quickly.

2. Receivables Turnover:
The company's receivables turnover ratio has steadily increased from 5.82 to 6.29, indicating that Novanta Inc is collecting its accounts receivable more efficiently. A higher receivables turnover ratio suggests that the company is effective in collecting payments from its customers.

3. Payables Turnover:
Novanta Inc's payables turnover ratio has varied between 8.26 to 12.33. A higher payables turnover ratio implies that the company is taking fewer days to settle its payables, which can indicate good relationships with suppliers or effective cash management practices.

4. Working Capital Turnover:
The working capital turnover ratio for Novanta Inc has ranged from 2.95 to 3.96. This ratio shows how efficiently the company is using its working capital to generate sales. A higher working capital turnover ratio suggests that the company is effectively utilizing its resources to drive revenue.

Overall, an analysis of these activity ratios indicates that Novanta Inc has been able to effectively manage its inventory, accounts receivable, accounts payable, and working capital to support its operations and financial performance.

Average number of days

Dec 31, 2024 Sep 30, 2024 Jun 30, 2024 Mar 31, 2024 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
Days of inventory on hand (DOH) days 70.00 76.58 82.02 84.01 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
Days of sales outstanding (DSO) days 58.05 65.22 58.98 61.80 57.84 59.05 59.51 59.06 58.47 62.67 — — 59.85 — — — 46.58 — — —
Number of days of payables days 37.22 34.17 36.41 37.17 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

Novanta Inc's Days of Inventory on Hand (DOH) have shown a fluctuating trend over the periods analyzed. The company started with 78.05 days of inventory on hand as of March 31, 2020, and experienced a decreasing trend, reaching a low of 66.47 days by March 31, 2021. However, DOH increased again to 89.80 days by December 31, 2022, before declining to 70.00 days by December 31, 2024.

In terms of Days of Sales Outstanding (DSO), Novanta Inc had no data available for the first three quarters of 2020. The company's DSO was 46.58 days by December 31, 2020, and increased over the following periods, reaching 65.22 days by September 30, 2024.

Regarding the Number of Days of Payables, Novanta Inc had 33.74 days of payables outstanding as of March 31, 2020. This metric increased to 44.21 days by September 30, 2021, before trending downwards to 37.22 days by the end of December 31, 2024.

Overall, the inventory management of Novanta Inc has been somewhat volatile, with fluctuations in DOH. The DSO has generally increased over the periods analyzed, indicating potential issues with accounts receivable management. On the other hand, the trend in the Number of Days of Payables suggests some variability but overall a relative stability in managing the company's payable obligations.

Long-term

Dec 31, 2024 Sep 30, 2024 Jun 30, 2024 Mar 31, 2024 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
Fixed asset turnover 8.39 7.70 7.82 7.86 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
Total asset turnover 0.68 0.65 0.64 0.63 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

Novanta Inc's fixed asset turnover ratio has shown some fluctuations over the years, ranging from a high of 9.04 in June 2022 to a low of 7.48 in December 2020. This ratio measures how efficiently the company is generating revenue from its fixed assets. The general trend over the period indicates that Novanta has been able to effectively utilize its fixed assets to generate sales, with the ratio consistently above 7.

On the other hand, the total asset turnover ratio, which measures how well the company is utilizing all its assets to generate revenue, has shown more stability compared to the fixed asset turnover ratio. The ratio has hovered around 0.7 in the recent years, indicating that Novanta is generating approximately $0.70 in sales for every dollar of assets. Despite some minor fluctuations, the total asset turnover ratio has been relatively consistent.

Overall, the analysis of Novanta Inc's long-term activity ratios suggests that the company has been efficient in utilizing both its fixed and total assets to generate revenue, with a strong performance in terms of asset turnover. However, management should continue to monitor these ratios to ensure ongoing efficiency in asset utilization and revenue generation.