Envista Holdings Corp (NVST)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Inventory turnover | 4.35 | 3.64 | 4.10 | 4.05 | 3.37 |
| Receivables turnover | 6.30 | 6.53 | 7.56 | 5.34 | 5.15 |
| Payables turnover | 6.27 | 4.79 | 5.83 | 3.72 | 4.50 |
| Working capital turnover | 2.67 | 13.67 | 4.00 | — | 7.81 |
Envista Holdings Corp's activity ratios provide insights into how efficiently the company is managing its inventory, receivables, payables, and working capital over the years.
1. Inventory Turnover:
- The inventory turnover ratio has been relatively stable over the past five years, ranging from 3.64 to 4.46 times.
- The slight increase in 2023 indicates that Envista is selling its inventory at a faster rate compared to previous years.
- This suggests that the company is effectively managing its inventory levels and converting inventory into sales efficiently.
2. Receivables Turnover:
- The receivables turnover ratio has also shown consistency, with values between 6.20 and 7.56 times.
- The higher turnover in 2021 indicates that Envista was collecting its receivables more frequently during that period.
- A high receivables turnover ratio indicates that the company is efficient in collecting outstanding receivables, improving its cash flow.
3. Payables Turnover:
- The payables turnover ratio has been somewhat volatile, ranging from 4.78 to 6.27 times.
- The increase in 2023 suggests that Envista is paying its suppliers more frequently in that year.
- A higher payables turnover ratio could indicate that the company is managing its payment obligations effectively, potentially benefiting from any available discounts for early payments.
4. Working Capital Turnover:
- The working capital turnover ratio fluctuates significantly between the years provided.
- The very high turnover in 2019 indicates that Envista was efficiently using its working capital to generate revenue during that period.
- However, the dramatic drop in 2022 signifies a change in how efficiently the company is utilizing its working capital for revenue generation.
In conclusion, Envista Holdings Corp's activity ratios reflect varying levels of efficiency in managing inventory, receivables, payables, and working capital over the years, highlighting the company's ability to convert assets into sales and cash flows.
Average number of days
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 83.89 | 100.33 | 88.96 | 90.17 | 108.42 |
| Days of sales outstanding (DSO) | days | 57.95 | 55.91 | 48.29 | 68.30 | 70.87 |
| Number of days of payables | days | 58.19 | 76.15 | 62.65 | 98.15 | 81.15 |
The Days of Inventory on Hand (DOH) for Envista Holdings Corp has shown some fluctuation over the past five years, ranging from a low of 81.90 days in 2019 to a high of 100.33 days in 2022. This ratio measures how long, on average, it takes for the company to sell its inventory. A lower DOH indicates the company is managing its inventory efficiently, while a higher DOH may suggest overstocking or slow-moving inventory.
The Days of Sales Outstanding (DSO) metric reveals the average number of days it takes for the company to collect its accounts receivable. Envista's DSO has fluctuated as well, peaking at 58.84 days in 2019 and declining to 48.29 days in 2021. A lower DSO indicates efficient collection practices, while a higher DSO may suggest problems with credit policies or collection efforts.
The Number of Days of Payables metric for Envista shows the average number of days it takes for the company to pay its suppliers. The company has experienced some variability in this ratio, with a peak of 76.35 days in 2020 and a low of 58.19 days in 2023. A higher number of days of payables may indicate improved cash flow management, as the company is taking longer to pay its bills.
Overall, analyzing these activity ratios for Envista Holdings Corp indicates that the company has managed its inventory efficiently, improved its accounts receivable collection processes, and effectively managed its payables over the past five years. Further analysis and comparison with industry benchmarks could provide additional insights into the company's operational efficiency and financial health.
Long-term
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Fixed asset turnover | 8.29 | 8.75 | 9.50 | 7.03 | 7.87 |
| Total asset turnover | 0.39 | 0.39 | 0.38 | 0.28 | 0.37 |
Envista Holdings Corp's long-term activity ratios show the efficiency of the company in utilizing its fixed assets and total assets to generate revenue over the past five years.
The fixed asset turnover ratio has been fluctuating over the years, ranging from 7.53 to 9.50 times. This ratio indicates that for every dollar invested in fixed assets, the company generated revenues ranging from 7.53 to 9.50 dollars. A higher fixed asset turnover ratio generally indicates effective asset utilization and efficiency in generating sales from fixed assets.
On the other hand, the total asset turnover ratio has remained relatively stable around 0.39 times, with a slight increase in recent years. This ratio reflects how efficiently the company is generating sales from its total assets. A total asset turnover ratio of 0.39 means that for every dollar invested in total assets, the company is generating 39 cents in revenue.
Overall, the trend in the fixed asset turnover ratio suggests that the company has effectively utilized its fixed assets to generate sales, while the stable total asset turnover ratio indicates consistent efficiency in generating revenue from total assets. Further analysis of the company's operations and industry benchmarks would provide more insights into its asset utilization efficiency.