Omnicell Inc (OMCL)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Inventory turnover | 10.38 | 8.54 | 8.28 | 8.37 | 7.12 |
| Receivables turnover | 4.71 | 4.48 | 4.75 | 4.87 | 4.33 |
| Payables turnover | 25.38 | 19.89 | 13.89 | 20.00 | 16.58 |
| Working capital turnover | 2.12 | 2.96 | — | 1.67 | 3.84 |
Omnicell, Inc.'s activity ratios provide insights into how efficiently the company manages its assets and operations.
1. Inventory turnover:
Omnicell has shown a consistent improvement in inventory turnover over the past five years, indicating that it is selling its inventory more efficiently. The company's inventory turnover ratio increased from 4.26 in 2019 to 5.91 in 2023, which suggests that the company's inventory management has become more efficient, potentially reducing carrying costs and minimizing obsolete inventory risks.
2. Receivables turnover:
The receivables turnover ratio measures how quickly a company collects its accounts receivable. Omnicell has maintained a relatively stable receivables turnover ratio over the years, ranging from 4.11 in 2019 to 4.70 in 2021. A higher receivables turnover ratio indicates that the company is collecting its receivables more quickly, which could help improve its cash flow and working capital management.
3. Payables turnover:
Omnicell's payables turnover ratio has shown volatility over the past five years, ranging from 8.07 in 2021 to 14.44 in 2023. A higher payables turnover ratio suggests that the company is paying its suppliers more quickly, potentially benefiting from early payment discounts while maintaining good relationships with its vendors.
4. Working capital turnover:
The working capital turnover ratio measures how efficiently a company utilizes its working capital to generate sales. Omnicell's working capital turnover ratio has fluctuated over the years, indicating changes in the company's working capital management efficiency. In 2023, the ratio decreased to 2.05 from 2.86 in 2022, which could signal a decrease in the company's ability to generate sales from its working capital.
Overall, Omnicell's activity ratios reflect improvements in inventory management efficiency and stable receivables turnover, while the payables turnover ratio has shown some fluctuations. Monitoring these ratios can help stakeholders assess the company's operational efficiency and effectiveness in managing its resources.
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 | 35.16 | 42.72 | 44.07 | 43.60 | 51.27 |
| Days of sales outstanding (DSO) | days | 77.43 | 81.43 | 76.85 | 74.98 | 84.34 |
| Number of days of payables | days | 14.38 | 18.35 | 26.28 | 18.25 | 22.02 |
Activity ratios provide insights into how efficiently a company manages its inventory, receivables, and payables. Let's analyze the activity ratios of Omnicell, Inc. over the past five years:
1. Days of Inventory on Hand (DOH):
- The DOH ratio measures how many days, on average, a company holds its inventory before selling it. A lower DOH is generally preferred as it indicates faster inventory turnover.
- Omnicell's DOH has fluctuated over the years, ranging from 61.80 days in 2023 to 85.68 days in 2019. In recent years, there has been a decreasing trend in DOH, indicating improved efficiency in managing inventory.
2. Days of Sales Outstanding (DSO):
- The DSO ratio indicates how long it takes a company to collect payments from its customers after a sale. A lower DSO reflects faster collection of receivables, which is beneficial for cash flow.
- Omnicell's DSO has varied between 77.67 days in 2021 to 88.85 days in 2019. While there have been fluctuations, the company has shown some improvement in collecting receivables more promptly.
3. Number of Days of Payables:
- This ratio measures the average number of days it takes for a company to pay its suppliers. A higher number of days of payables can suggest improved cash flow management.
- Omnicell's days of payables have been somewhat inconsistent, ranging from 25.27 days in 2023 to 45.21 days in 2021. The company has shown variability in its payment cycles to suppliers.
Overall, Omnicell has made some progress in managing its activity ratios over the years, with improvements in inventory turnover and receivables collection. However, the variability in the days of payables indicates some fluctuations in the company's payment practices. Monitoring and optimizing these activity ratios can help Omnicell enhance its operational efficiency and cash flow management strategies.
Long-term
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Fixed asset turnover | 10.94 | 14.29 | 16.08 | 15.67 | 17.42 |
| Total asset turnover | 0.53 | 0.61 | 0.53 | 0.51 | 0.76 |
Omnicell, Inc.'s long-term activity ratios indicate how effectively the company is utilizing its fixed assets and total assets to generate sales revenue. The fixed asset turnover ratio has shown a declining trend over the past five years, decreasing from 16.54 in 2019 to 10.56 in 2023. This suggests that the company's efficiency in utilizing its fixed assets to generate sales has weakened over time.
On the other hand, the total asset turnover ratio has fluctuated over the same period, with a notable decrease from 0.72 in 2019 to 0.52 in 2023. This indicates that the company's ability to generate sales revenue from its total assets has gradually declined.
Overall, the trends in these activity ratios suggest that Omnicell, Inc. may be facing challenges in effectively leveraging its assets to drive sales growth and profitability. The declining ratios may warrant a closer examination of the company's asset management strategies and operational efficiency to identify areas for improvement.