Envista Holdings Corp (NVST)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Inventory turnover | 15.05 | 4.35 | 3.64 | 4.10 | 4.05 |
| Receivables turnover | 6.91 | 6.30 | 6.53 | 7.56 | 5.34 |
| Payables turnover | 20.77 | 6.27 | 4.79 | 5.83 | 3.72 |
| Working capital turnover | 2.76 | 2.67 | 13.67 | 4.00 | — |
Inventory Turnover:
- The inventory turnover ratio measures how many times a company sells and replaces its inventory during a period.
- Envista Holdings Corp's inventory turnover has been relatively stable over the years, ranging from 3.64 to 15.05.
- A higher inventory turnover generally indicates efficient inventory management, as the company is selling its inventory quickly.
Receivables Turnover:
- The receivables turnover ratio shows how efficiently a company is collecting its accounts receivable during a period.
- Envista's receivables turnover has ranged from 5.34 to 7.56, indicating a consistent performance in collecting receivables.
- A higher receivables turnover suggests a shorter time between credit sales and cash collection, which is positive for cash flow.
Payables Turnover:
- The payables turnover ratio measures how many times a company pays its suppliers during a period.
- Envista's payables turnover has shown an increasing trend, from 3.72 to 20.77, indicating the company is managing its payables effectively.
- A higher payables turnover suggests the company is efficient in paying its suppliers, which could imply good relationships and potential cost savings.
Working Capital Turnover:
- The working capital turnover ratio indicates how efficiently a company is using its working capital to generate sales.
- Envista had varying working capital turnover ratios over the years, with the highest being 13.67.
- A higher working capital turnover ratio suggests that the company is effectively utilizing its working capital to generate revenue, which is a positive sign of operational efficiency.
Average number of days
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 24.25 | 83.89 | 100.33 | 88.96 | 90.17 |
| Days of sales outstanding (DSO) | days | 52.83 | 57.95 | 55.91 | 48.29 | 68.30 |
| Number of days of payables | days | 17.57 | 58.19 | 76.15 | 62.65 | 98.15 |
Based on the provided data, let's analyze the activity ratios of Envista Holdings Corp:
1. Days of Inventory on Hand (DOH):
- The trend for DOH over the years shows fluctuations but an overall improvement from 90.17 days in 2020 to 24.25 days in 2024.
- Envista Holdings Corp managed inventory more efficiently over these years, reducing the number of days inventory is held before being sold, which is a positive indicator of effective inventory management.
2. Days of Sales Outstanding (DSO):
- DSO decreased significantly from 68.30 days in 2020 to 52.83 days in 2024, indicating that the company is collecting its accounts receivable more efficiently.
- A decreasing trend in DSO implies that Envista Holdings Corp is converting its sales into cash at a faster rate, which is a positive sign of effective credit management.
3. Number of Days of Payables:
- The number of days of payables shows a significant decrease from 98.15 days in 2020 to 17.57 days in 2024.
- This decreasing trend indicates that Envista Holdings Corp is managing its payables more efficiently, potentially negotiating better terms with suppliers or paying off obligations more promptly.
Overall, based on the activity ratios analysis, Envista Holdings Corp has shown improvement in managing its inventory, collecting receivables, and paying off payables more efficiently over the years. These improvements suggest a positive trend in the company's working capital management and operational efficiency.
Long-term
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Fixed asset turnover | 9.05 | 8.29 | 8.75 | 9.50 | 7.03 |
| Total asset turnover | 0.47 | 0.39 | 0.39 | 0.38 | 0.28 |
The fixed asset turnover ratio of Envista Holdings Corp has shown a positive trend over the years, increasing from 7.03 in 2020 to 9.05 in 2024. This indicates that the company is generating more sales per dollar of fixed assets invested, which reflects efficiency in utilizing its plant, property, and equipment.
Similarly, the total asset turnover ratio has also improved steadily, rising from 0.28 in 2020 to 0.47 in 2024. This suggests that Envista Holdings Corp is effectively using its total assets to generate revenue, highlighting a better efficiency in the overall utilization of assets to drive sales.
Overall, the increasing trend in both fixed asset turnover and total asset turnover ratios indicates that Envista Holdings Corp has been successful in optimizing its asset utilization and improving operational efficiency over the years, which is a positive indication of the company's financial performance.