O-I Glass Inc (OI)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Inventory turnover | 5.70 | 5.24 | 7.30 | 7.14 | 6.85 |
| Receivables turnover | 11.42 | 10.59 | 8.70 | 8.87 | 9.79 |
| Payables turnover | 4.80 | 3.90 | 4.57 | 4.82 | 5.12 |
| Working capital turnover | 20.54 | 13.21 | 26.89 | 9.12 | 15.28 |
O-I Glass Inc's activity ratios provide valuable insights into the efficiency of the company's operations. Let's analyze the key activity ratios based on the provided data:
1. Inventory Turnover: O-I Glass Inc's inventory turnover has shown a generally increasing trend from 6.85 in 2020 to 5.70 in 2024. This indicates that the company is selling through its inventory at a faster rate in recent years, which is generally a positive sign. A higher inventory turnover ratio suggests effective inventory management and potentially lower carrying costs.
2. Receivables Turnover: The receivables turnover ratio for O-I Glass Inc has fluctuated over the years, ranging from 8.70 in 2022 to 11.42 in 2024. A higher receivables turnover ratio implies that the company is collecting its accounts receivable more quickly, which can improve cash flow and reduce the risk of bad debts.
3. Payables Turnover: O-I Glass Inc's payables turnover ratio has also varied, with a low of 3.90 in 2023 to a high of 5.12 in 2020. A higher payables turnover ratio indicates that the company is paying its suppliers more quickly, which can enhance relationships and potentially allow for better credit terms.
4. Working Capital Turnover: The working capital turnover ratio of O-I Glass Inc has shown significant fluctuations, with a notable peak of 26.89 in 2022. This ratio reflects how effectively the company is using its working capital to generate sales. A higher working capital turnover ratio indicates efficient utilization of resources.
In conclusion, O-I Glass Inc's activity ratios suggest that the company has been managing its inventory, receivables, payables, and working capital efficiently over the years. However, it is important for the company to continue monitoring and improving these ratios to enhance operational performance and financial health.
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 | 64.07 | 69.69 | 50.02 | 51.11 | 53.26 |
| Days of sales outstanding (DSO) | days | 31.97 | 34.47 | 41.93 | 41.15 | 37.30 |
| Number of days of payables | days | 75.98 | 93.51 | 79.92 | 75.79 | 71.32 |
The activity ratios provide insight into how efficiently O-I Glass Inc manages its inventory, sales, and payables.
1. Days of Inventory on Hand (DOH):
- The trend in O-I Glass Inc's DOH shows a slight decrease from 53.26 days in 2020 to 50.02 days in 2022, indicating an improvement in managing inventory levels. However, there was a significant increase in 2023 and 2024 to 69.69 days and 64.07 days, respectively, suggesting potential issues with inventory management efficiency or changes in the business environment.
2. Days of Sales Outstanding (DSO):
- The DSO for O-I Glass Inc increased steadily from 37.30 days in 2020 to 41.93 days in 2022. However, in 2023 and 2024, there was a decrease to 34.47 days and 31.97 days, respectively. A lower DSO indicates that the company is collecting its accounts receivable more quickly, which is generally positive for cash flow management.
3. Number of Days of Payables:
- O-I Glass Inc's number of days of payables increased from 71.32 days in 2020 to 79.92 days in 2022 before a significant jump to 93.51 days in 2023. The number decreased in 2024 to 75.98 days. A higher number of days of payables may suggest that the company is taking longer to pay its suppliers which can have implications on relationships with vendors and cash flow management.
Overall, O-I Glass Inc appears to have made progress in managing its inventory and accounts receivable efficiently from 2020 to 2022. However, the significant changes in 2023 and 2024 require further investigation to understand the factors influencing the activity ratios and their impact on the company's operations and financial health.
Long-term
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Fixed asset turnover | 1.98 | 2.00 | 2.23 | 2.18 | 2.10 |
| Total asset turnover | 0.75 | 0.73 | 0.73 | 0.69 | 0.69 |
O-I Glass Inc's long-term activity ratios indicate its efficiency in utilizing its assets over time.
1. Fixed Asset Turnover:
- The Fixed Asset Turnover ratio measures how effectively the company generates revenue from its investment in fixed assets. O-I Glass Inc experienced a steady increase in its Fixed Asset Turnover ratio from 2.10 in 2020 to 2.23 in 2022, indicating improved efficiency in utilizing its fixed assets to generate sales.
- However, there was a slight decline in the ratio to 1.98 by the end of 2024, which may suggest a decrease in the company's ability to generate revenue from its fixed assets efficiently.
2. Total Asset Turnover:
- The Total Asset Turnover ratio reflects O-I Glass Inc's ability to generate sales from all its assets. The company maintained a relatively stable Total Asset Turnover ratio around 0.69 in 2020 and 2021 before a gradual increase to 0.75 by the end of 2024.
- The increasing trend in the Total Asset Turnover ratio indicates that O-I Glass Inc is becoming more efficient in generating revenue from its total asset base, potentially through better asset utilization or increased sales volume.
Overall, while O-I Glass Inc showed improvements in its efficiency in generating revenue from both fixed and total assets over the years, the slight decline in the Fixed Asset Turnover ratio by the end of 2024 may require further investigation to understand the underlying causes and take appropriate measures to enhance asset utilization efficiency.