Otis Worldwide Corp (OTIS)

Activity ratios

Short-term

Turnover ratios

Dec 31, 2024 Sep 30, 2024 Jun 30, 2024 Mar 31, 2024 Dec 31, 2023 Sep 30, 2023 Jun 30, 2023 Mar 31, 2023 Dec 31, 2022 Sep 30, 2022 Jun 30, 2022 Mar 31, 2022 Dec 31, 2021 Sep 30, 2021 Jun 30, 2021 Mar 31, 2021 Dec 31, 2020
Inventory turnover 3.58 3.20 3.32 3.45 3.31 3.13 2.98 2.93 3.08 3.26 3.42 3.31 3.38 3.45 3.24 3.13 5.60
Receivables turnover 3.90 3.67 3.65 3.61 3.75 3.77 3.69 3.76 3.81 4.14 4.10 4.07 4.13 3.99 3.90 3.78 3.65
Payables turnover 1.06 1.12 1.17 1.24 1.08 1.18 1.09 1.24 1.11 1.29 1.26 1.37 1.35 1.30 1.39 1.47 2.54
Working capital turnover — — — — — — — — — — — 11.87 7.03 1,177.50 — — —

The inventory turnover ratio of Otis Worldwide Corp has shown a declining trend over the past few years, indicating that the company is taking longer to sell its inventory. From December 31, 2020, to December 31, 2024, the ratio decreased from 5.60 to 3.58. This suggests that Otis may be experiencing challenges in efficiently managing its inventory levels.

On the other hand, the receivables turnover ratio of Otis has been relatively stable over the same period, ranging from 3.61 to 4.14. This indicates that the company is efficient in collecting payments from its customers.

The payables turnover ratio of Otis has also exhibited a decreasing trend, dropping from 2.54 on December 31, 2020, to 1.06 on December 31, 2024. A declining payables turnover ratio can indicate that the company is taking longer to pay its suppliers.

The working capital turnover ratio, which was significant on September 30, 2021 (1,177.50), suggests that the company was able to generate significant revenue relative to its working capital during that period. However, the lack of data for subsequent periods prevents a comprehensive analysis of this ratio's trend.

In summary, Otis Worldwide Corp's activity ratios show some concerning trends in inventory turnover and payables turnover, while its receivables turnover remains relatively stable. There is a need for further analysis to understand the underlying factors driving these changes and their potential impact on the company's operational efficiency.

Average number of days

Dec 31, 2024 Sep 30, 2024 Jun 30, 2024 Mar 31, 2024 Dec 31, 2023 Sep 30, 2023 Jun 30, 2023 Mar 31, 2023 Dec 31, 2022 Sep 30, 2022 Jun 30, 2022 Mar 31, 2022 Dec 31, 2021 Sep 30, 2021 Jun 30, 2021 Mar 31, 2021 Dec 31, 2020
Days of inventory on hand (DOH) days 102.01 114.06 109.86 105.94 110.42 116.50 122.50 124.45 118.65 111.95 106.85 110.28 108.01 105.78 112.68 116.68 65.13
Days of sales outstanding (DSO) days 93.48 99.54 99.99 100.99 97.44 96.70 98.97 97.17 95.71 88.12 89.01 89.68 88.38 91.39 93.56 96.62 99.92
Number of days of payables days 344.12 324.67 311.61 293.18 338.84 308.99 333.80 293.67 330.19 282.38 289.71 265.47 270.19 279.94 262.70 248.15 143.61

Otis Worldwide Corp's activity ratios show fluctuations over the years.

1. Days of Inventory on Hand (DOH):
- The company's inventory turnover has been fluctuating, ranging from 102.01 days on December 31, 2024, to 65.13 days on December 31, 2020.
- Overall, the trend indicates an increasing number of days of inventory on hand, which suggests that Otis Worldwide Corp might be facing challenges in efficiently managing its inventory levels.

2. Days of Sales Outstanding (DSO):
- The DSO for Otis Worldwide Corp has also been variable, ranging from 93.48 days on December 31, 2024, to 99.92 days on December 31, 2020.
- The trend shows some fluctuations but seems to have slightly decreased towards the end of the period, indicating potentially better accounts receivable management.

3. Number of Days of Payables:
- The number of days of payables for the company shows significant fluctuations, ranging from 144.12 days on December 31, 2024, to 248.15 days on March 31, 2021.
- The trend suggests that the company's payment terms with suppliers vary widely, and it may have faced challenges in managing its payables efficiently over the years.

In conclusion, Otis Worldwide Corp's activity ratios reflect varying levels of efficiency in managing inventory, receivables, and payables. The management should focus on optimizing inventory levels, improving collection processes, and maintaining stable payment terms with suppliers to enhance overall operational efficiency.

Long-term

Dec 31, 2024 Sep 30, 2024 Jun 30, 2024 Mar 31, 2024 Dec 31, 2023 Sep 30, 2023 Jun 30, 2023 Mar 31, 2023 Dec 31, 2022 Sep 30, 2022 Jun 30, 2022 Mar 31, 2022 Dec 31, 2021 Sep 30, 2021 Jun 30, 2021 Mar 31, 2021 Dec 31, 2020
Fixed asset turnover 20.28 19.59 19.85 19.83 19.34 19.61 19.17 18.75 18.83 19.75 19.26 18.71 18.30 18.23 17.63 17.11 16.38
Total asset turnover 1.26 1.38 1.43 1.44 1.39 1.34 1.35 1.37 1.38 1.46 1.41 1.20 1.15 1.35 1.27 1.25 1.18

Otis Worldwide Corp's fixed asset turnover has shown a consistent increasing trend over the years, indicating the company's ability to generate more sales relative to its investment in fixed assets. The ratio improved from 16.38 in December 2020 to 20.28 in December 2024, reaching its peak. This suggests that Otis is efficiently utilizing its fixed assets to generate revenue.

In contrast, the total asset turnover ratio has been more volatile, with fluctuations observed throughout the period. The ratio ranged from 1.15 in December 2021 to 1.46 in September 2022, showing some inconsistency in how effectively Otis is generating sales relative to its total assets. However, the ratio generally stayed above 1, indicating that the company is utilizing its total assets efficiently to generate revenue.

Overall, the increasing trend in fixed asset turnover and the generally strong total asset turnover suggest that Otis Worldwide Corp is effectively managing its assets to generate sales, although there may be some variability in the efficiency of asset utilization over time.