Envista Holdings Corp (NVST)

Short-term

Turnover ratios

To analyze the activity ratios of Envista Holdings Corp, we will examine the inventory turnover, receivables turnover, payables turnover, and working capital turnover ratios over the past eight quarters.

1. Inventory turnover:
- The inventory turnover ratio has shown a fluctuating trend over the quarters, ranging from 3.59 to 4.35.
- On average, the company is turning over its inventory approximately 3 to 4 times a year. A higher inventory turnover indicates efficient inventory management.

2. Receivables turnover:
- The receivables turnover ratio has also varied but generally remained consistent between 6 to 7 times per year.
- This implies that the company is collecting its receivables efficiently, converting sales into cash relatively quickly.

3. Payables turnover:
- The payables turnover ratio has also fluctuated, ranging from 4.79 to 6.59.
- A higher payables turnover ratio suggests that the company is paying its suppliers more frequently, possibly taking advantage of discounts or managing cash flow effectively.

4. Working capital turnover:
- The working capital turnover ratio has seen significant fluctuations over the quarters, with a high of 21.92 and a low of 2.67.
- A higher working capital turnover indicates effective utilization of working capital to generate sales revenue. The company's working capital management strategy seems to have varied significantly over the period.

Overall, Envista Holdings Corp's activity ratios reflect varying degrees of efficiency in managing its inventory, receivables, payables, and working capital. Monitoring these ratios can help assess the company's operational effectiveness and financial performance over time.

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Average number of days

Envista Holdings Corp's activity ratios provide valuable insights into the efficiency of the company's operations.

1. Days of inventory on hand (DOH) shows the number of days a company holds its inventory before it is sold. The trend for Envista Holdings Corp's DOH is decreasing, which indicates that the company is managing its inventory more efficiently over time. The company has been able to reduce the number of days it holds inventory, which may result in lower carrying costs and improved cash flow.

2. Days of sales outstanding (DSO) measures the average number of days it takes for the company to collect payment after making a sale. Envista Holdings Corp's DSO has been relatively stable, with some fluctuations, indicating that the company is maintaining consistency in its collection efforts. A lower DSO is generally favorable as it reflects faster collection of receivables.

3. Number of days of payables represents the average number of days a company takes to pay its suppliers. Envista Holdings Corp has shown a decreasing trend in its number of days of payables, indicating that the company is paying its suppliers more quickly over time. While prompt payments can improve supplier relationships, they can also impact cash flow management.

In summary, Envista Holdings Corp has been improving its inventory management, maintaining steady collection efforts, and decreasing the time taken to pay suppliers. These trends suggest that the company is focused on enhancing operational efficiency and managing its working capital effectively.

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Long-term

The fixed asset turnover ratio measures how efficiently a company is utilizing its fixed assets to generate revenue. Envista Holdings Corp's fixed asset turnover ratio has been relatively stable over the quarters, ranging from 8.29 to 9.20, indicating consistent efficiency in generating sales from its fixed assets.

On the other hand, the total asset turnover ratio reflects the company's overall ability to generate sales from all assets. Envista Holdings Corp's total asset turnover ratio has also remained fairly constant at around 0.39, showing consistent performance in generating revenue relative to its total assets.

Both ratios suggest that Envista Holdings Corp is efficiently utilizing its assets to generate sales, with the fixed asset turnover ratio highlighting the effectiveness of the company's use of fixed assets specifically. This stable performance in asset turnover ratios indicates effective asset management and operational efficiency within the company.