Phibro Animal Health Corporation (PAHC)

Short-term

Turnover ratios

Phibro Animal Health Corporation's activity ratios provide insight into how efficiently the company manages its inventory, receivables, payables, and working capital.

1. Inventory turnover: Phibro's inventory turnover has shown a slight increasing trend over the past five years, from 2.76 in 2020 to 3.70 in 2024. This indicates that the company is selling its inventory more quickly. A higher turnover ratio is generally preferred as it signifies efficient management of inventory levels.

2. Receivables turnover: The receivables turnover ratio has fluctuated slightly over the years but has remained relatively stable. This ratio measures how efficiently the company collects cash from its credit sales. Phibro has maintained a healthy turnover ratio, indicating effective management of its accounts receivable.

3. Payables turnover: The payables turnover ratio has also fluctuated over the years but has generally remained at a consistent level. A higher turnover ratio suggests that the company is paying its suppliers more quickly. Phibro's stable payables turnover ratio signals efficient management of its accounts payable.

4. Working capital turnover: Phibro's working capital turnover has shown a slight decreasing trend over the past five years, from 2.72 in 2020 to 2.50 in 2024. This ratio measures how efficiently the company is generating revenue relative to its working capital. A higher turnover ratio indicates better utilization of working capital. Phibro's working capital turnover ratio, although slightly decreasing, remains at a favorable level.

Overall, Phibro Animal Health Corporation's activity ratios suggest that the company is effectively managing its inventory, receivables, payables, and working capital to support its operations and financial performance.

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Average number of days

Based on the activity ratios of Phibro Animal Health Corporation over the past five years:

1. Days of Inventory on Hand (DOH):
- Phibro Animal Health Corporation has shown a decreasing trend in its Days of Inventory on Hand from 132.08 days in 2020 to 98.53 days in 2024.
- A lower DOH indicates that the company is managing its inventory more efficiently, potentially reducing carrying costs and holding excess inventory.

2. Days of Sales Outstanding (DSO):
- The Days of Sales Outstanding for Phibro Animal Health Corporation have remained relatively stable over the last five years, ranging from 57.70 days in 2020 to 62.23 days in 2024.
- This metric reflects the average number of days it takes for the company to collect its accounts receivable, with a consistent DSO suggesting steady credit and collection practices.

3. Number of Days of Payables:
- Phibro Animal Health Corporation has shown a fluctuating trend in the Number of Days of Payables, varying from 29.44 days in 2023 to 44.40 days in 2021.
- A higher number of days of payables indicates that the company is taking longer to pay its suppliers, potentially benefiting from extended payment terms but also facing potential strain on supplier relationships.

In conclusion, Phibro Animal Health Corporation has demonstrated improvements in managing its inventory more efficiently over the years, maintaining a stable collection period for accounts receivable, and facing some variability in its payment terms to suppliers. These activity ratios provide insights into the company's operational efficiency and working capital management.

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Long-term

The fixed asset turnover ratio for Phibro Animal Health Corporation has remained relatively stable over the past five years, ranging from 4.89 to 5.65. This indicates that the company is generating approximately $4.89 to $5.65 in net sales for every dollar invested in fixed assets. The consistent high fixed asset turnover suggests efficient utilization of fixed assets to generate revenue.

On the other hand, the total asset turnover ratio has also been relatively steady, fluctuating between 0.99 and 1.02. This indicates that the company is generating approximately $0.99 to $1.02 in net sales for every dollar invested in total assets. The stability in total asset turnover suggests that Phibro Animal Health Corporation has been effectively managing its total assets to generate revenue over the past five years.

Overall, both the fixed asset turnover and total asset turnover ratios suggest that Phibro Animal Health Corporation has been efficiently utilizing its assets to generate sales, which is a positive indicator of the company's operational efficiency.