Owens & Minor Inc (OMI)

Short-term

Turnover ratios

Owens & Minor, Inc.'s activity ratios provide insights into how efficiently the company manages its assets and liabilities to generate revenue.

1. Inventory Turnover:
- Owens & Minor's inventory turnover ratio has generally been increasing over the past five years, indicating that the company is selling its inventory more quickly. This implies efficient management of inventory levels and effective sales strategies.

2. Receivables Turnover:
- The receivables turnover ratio has shown a fluctuating trend with an overall increasing pattern. This suggests that Owens & Minor is collecting its accounts receivable at a faster pace, potentially improving its cash flow and reducing the risk of bad debts.

3. Payables Turnover:
- The payables turnover ratio has fluctuated but maintained at a relatively stable range. A lower turnover ratio may indicate that the company is taking longer to pay its suppliers, potentially improving cash flow management. However, the consistency in the ratio suggests a stable relationship with creditors.

4. Working Capital Turnover:
- The working capital turnover ratio has shown significant fluctuations over the years, with a notable spike in 2023. This indicates that Owens & Minor is generating revenue efficiently relative to its working capital, which includes current assets and liabilities. A higher ratio reflects effective utilization of working capital to drive sales.

Overall, the trends in Owens & Minor's activity ratios suggest that the company has been improving its operational efficiency, inventory management, accounts receivable collection, and working capital utilization in recent years. This is essential for sustaining profitability and maximizing shareholder value in the long run.

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Average number of days

Activity ratios, also known as efficiency ratios, provide insights into how well a company manages its resources to generate sales and cash flow. Let's analyze the activity ratios of Owens & Minor, Inc. over the past five years.

1. Days of Inventory on Hand (DOH):
- The DOH measures the average number of days it takes for a company to sell its inventory. A lower DOH indicates efficient inventory management.
- Owens & Minor's trend shows a fluctuating DOH over the years, with a peak in 2021 and a decrease in 2023. The current DOH of 49.38 days suggests an improvement in managing inventory levels.

2. Days of Sales Outstanding (DSO):
- DSO indicates the average number of days it takes for a company to collect its accounts receivable. A lower DSO is favorable as it indicates faster cash collection.
- Owens & Minor's DSO has shown variation year over year, with a decrease in 2023 to 21.13 days. This suggests that the company has been more effective in collecting payments from customers.

3. Number of Days of Payables:
- This ratio measures how long it takes for a company to pay its suppliers. A longer payment period may indicate better cash flow management.
- Owens & Minor's days of payables have increased steadily over the years, reaching 52.11 days in 2023. This implies that the company is taking longer to settle its payables, potentially benefiting from improved cash flow or negotiating favorable payment terms.

Overall, Owens & Minor has shown varying levels of efficiency in managing its inventory, receivables, and payables over the years. The recent improvements in inventory management and collection of receivables are positive signs, but the increasing days of payables may warrant further investigation to understand the impact on the company's working capital and supplier relationships.

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Long-term

Based on the provided data, Owens & Minor, Inc.'s long-term activity ratios can be analyzed as follows:

1. Fixed Asset Turnover:
- The fixed asset turnover ratio measures how efficiently a company is generating sales from its investment in fixed assets.
- Owens & Minor, Inc.'s fixed asset turnover has fluctuated over the past five years, ranging between 17.22 and 30.85.
- The higher the fixed asset turnover ratio, the more effectively the company is utilizing its fixed assets to generate revenue.
- In 2023, Owens & Minor's fixed asset turnover improved to 19.00, indicating that the company generated $19.00 in sales for every dollar invested in fixed assets.

2. Total Asset Turnover:
- The total asset turnover ratio evaluates how well a company is utilizing all its assets to generate revenue.
- Owens & Minor, Inc.'s total asset turnover has also varied over the five-year period, with values ranging from 1.85 to 2.77.
- A higher total asset turnover ratio suggests that the company is efficiently generating sales from its total asset base.
- In 2023, Owens & Minor's total asset turnover stood at 2.03, indicating that the company generated $2.03 in sales for every dollar invested in total assets.

Overall, while both the fixed asset turnover and total asset turnover ratios have fluctuated over the years, Owens & Minor, Inc. appears to have effectively utilized its fixed assets and total assets to generate sales. The improvement in the fixed asset turnover ratio in 2023 suggests increased efficiency in generating revenue from fixed assets, while the total asset turnover ratio remained relatively stable at a satisfactory level.