Omnicom Group Inc (OMC)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Inventory turnover | 9.52 | 9.73 | 10.07 | 10.76 | 10.20 |
| Receivables turnover | 1.70 | 1.76 | 1.69 | 1.69 | 1.91 |
| Payables turnover | 1.10 | 1.11 | 1.02 | 1.03 | 1.09 |
| Working capital turnover | — | — | — | 202.63 | — |
Omnicom Group, Inc. has consistently maintained an inventory turnover ratio of 0.00 over the past five years, indicating that the company is not efficiently managing its inventory levels or experiencing slow-moving or obsolete inventory.
The receivables turnover ratio has shown slight fluctuations, ranging from 1.69 to 1.91, with the latest figure standing at 1.70 in 2023. This suggests that Omnicom takes approximately 1.70 to 1.91 times a year to collect its accounts receivable, which is a moderate turnover rate but may indicate room for improvement in the collection process.
The payables turnover ratio has been consistently reported as 0.00 across the five-year period, indicating that Omnicom is not utilizing its accounts payable effectively in terms of generating purchases or managing its payable obligations.
As for the working capital turnover, data is missing for the recent years but was notably high at 202.63 in 2020. This high turnover ratio suggests that Omnicom is efficiently utilizing its working capital to generate revenue during that period.
Overall, Omnicom's activity ratios reveal room for improvement in inventory and accounts payable management, while maintaining moderate efficiency in accounts receivable collection and a history of effective working capital utilization.
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 | 38.35 | 37.52 | 36.25 | 33.91 | 35.77 |
| Days of sales outstanding (DSO) | days | 215.14 | 206.83 | 216.42 | 216.53 | 191.10 |
| Number of days of payables | days | 332.30 | 328.95 | 359.13 | 354.50 | 334.76 |
Based on the activity ratios provided for Omnicom Group, Inc., we can analyze its efficiency in managing inventory, collecting receivables, and paying its suppliers.
1. Days of Inventory on Hand (DOH): Unfortunately, the data for Days of Inventory on Hand is not available for the years provided. As a result, we are unable to assess Omnicom's efficiency in managing its inventory turnover and the average number of days it holds inventory before selling.
2. Days of Sales Outstanding (DSO): Omnicom's Days of Sales Outstanding have shown a slight upward trend over the last five years, indicating that the company is taking more time to collect payments from its customers. Specifically, DSO has increased from 191.10 days in 2019 to 215.14 days in 2023. A higher number of days of sales outstanding could signal potential cash flow challenges or issues with credit policies.
3. Number of Days of Payables: Unfortunately, data for the Number of Days of Payables is not available for the years provided. This ratio helps in assessing how long it takes for a company to pay its suppliers, providing insights into its liquidity position and relationships with vendors.
In conclusion, while Omnicom Group, Inc. lacks data on inventory management and payables turnover, the increasing trend in Days of Sales Outstanding suggests a slower collection of receivables over the years. Management should monitor and potentially improve this aspect to ensure healthy cash flows and efficient working capital management.
Long-term
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Fixed asset turnover | 16.79 | 15.88 | 14.40 | 22.51 | 22.54 |
| Total asset turnover | 0.52 | 0.53 | 0.50 | 0.48 | 0.56 |
Omnicom Group, Inc.'s long-term activity ratios indicate the efficiency with which the company utilizes its assets to generate sales over the years. The fixed asset turnover ratio has shown a generally increasing trend from 2019 to 2021, indicating that the company has been able to generate more revenue from its fixed assets. However, there was a slight decrease in 2022 and 2023, which may suggest a decrease in efficiency in utilizing fixed assets to generate revenue.
On the other hand, the total asset turnover ratio has fluctuated over the same period, reflecting the company's ability to generate sales in relation to its total assets. The ratio was highest in 2019 and has since fluctuated slightly, with a slight decline in 2023. This indicates that Omnicom Group, Inc. may be becoming less efficient in generating sales in relation to its total assets in recent years.
Overall, while the fixed asset turnover ratio suggests some inconsistency in asset utilization efficiency, the total asset turnover ratio reflects fluctuations in sales generation efficiency relative to total assets. It would be advisable for the company to further analyze the drivers behind these fluctuations to identify areas for improvement in asset utilization and sales generation efficiency.