Phibro Animal Health Corporation (PAHC)

Short-term

Turnover ratios

The activity ratios of Phibro Animal Health Corporation over the period from June 2021 to June 2025 reveal insights into the company's operational efficiency in managing inventory, receivables, payables, and working capital.

Inventory Turnover:
The inventory turnover ratio has exhibited a slight declining trend from 2.60 times in June 2021 to 2.45 times in June 2023, indicating a marginal decrease in the frequency of inventory sales and replenishment. However, the ratio rebounded to 2.65 times in June 2024 before declining again to 2.02 times in June 2025, signaling potential challenges in inventory management or shifts in sales performance in the most recent year.

Receivables Turnover:
The receivables turnover ratio remained relatively stable, fluctuating between 5.67 times in June 2021 and 6.01 times in June 2024. This stability suggests consistent collection efficiency, with a slight upward trend indicating a marginal improvement in accounts receivable management, before slightly decreasing to 5.69 times in June 2025.

Payables Turnover:
The payables turnover ratio experienced variability, decreasing from 8.22 times in June 2021 to 6.87 times in June 2022, then increasing significantly to 9.20 times in June 2023. Subsequently, the ratio decreased to 8.23 times in June 2024 and further declined to 6.49 times in June 2025. These fluctuations reflect changes in payment practices or supplier terms, with a notable decrease in the most recent year indicating potentially longer payment durations or shifts in procurement policies.

Working Capital Turnover:
The working capital turnover ratio has remained relatively stable throughout the period, ranging narrowly between 2.39 and 2.56. This suggests that the company has maintained a consistent level of efficiency in using its working capital to support sales activities without significant fluctuations.

In summary, Phibro Animal Health Corporation demonstrates stable receivables and working capital management, with some variability in inventory and payables turnover ratios. The recent decline in inventory turnover and payables ratio may warrant further investigation into operational changes or potential inefficiencies in managing inventory and supplier relationships.

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Average number of days

The analysis of Phibro Animal Health Corporation's activity ratios over the specified period reveals several noteworthy trends and patterns:

1. Days of Inventory on Hand (DOH):
The company's inventory holding period has shown fluctuations across the five years assessed. Starting at approximately 140.49 days as of June 30, 2021, it increased slightly to 144.00 days in 2022 and further to 149.07 days in 2023. This trend suggests a gradual accumulation of inventory, potentially indicating slower inventory turnover or increased inventory levels relative to sales during this period. However, a notable reduction occurred in 2024, with DOH decreasing to 137.75 days, suggesting improved inventory management or faster inventory turnover. Conversely, an increase to 180.99 days in 2025 represents a significant extension in inventory holding, which could imply supply chain inefficiencies, changes in product mix, or strategic inventory buildup.

2. Days of Sales Outstanding (DSO):
The receivables collection period has remained relatively stable over the analyzed years. It was approximately 64.32 days in 2021, slightly rising to 64.51 days in 2022. A marginal decline to 61.02 days occurred in 2023, indicating slightly improved collection efficiency or shorter credit terms. This stability persisted into 2024 and 2025, with DSO values of 60.78 days and 64.20 days, respectively. Overall, the data suggests the company's credit and collection policies have remained consistent, with minor fluctuations.

3. Number of Days of Payables:
The company's payment period to suppliers exhibits variability. Starting at 44.40 days in 2021, it increased to 53.12 days in 2022, indicating an extension in the payment cycle perhaps as a strategic approach to optimize cash flow. In 2023, the payables period decreased to 39.66 days, potentially reflecting improved cash management or changes in supplier payment terms. The period reverted to around 44.33 days in 2024 and further extended to 56.28 days in 2025, indicating a trend toward lengthening payables over time, which may suggest efforts to conserve cash or negotiations favorable to the company.

Summary:
The activity ratios suggest that Phibro Animal Health Corporation experienced a gradual increase in inventory holding periods up to 2023, followed by a reduction in 2024 and a substantial increase again in 2025, signaling possible fluctuations in inventory management or supply chain demands. The receivables collection cycle has remained relatively steady, implying stable credit policies. The accounts payable period has shown periods of both extension and contraction, with a notable lengthening in 2025, which could reflect strategic payment management to optimize liquidity. Overall, these trends provide insight into the company's operational efficiency and cash management strategies over the analyzed period.

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Long-term

The analysis of Phibro Animal Health Corporation's long-term activity ratios reveals insights into the company's utilization of its fixed assets and total assets over the specified periods.

The Fixed Asset Turnover ratio demonstrates an upward trend from June 30, 2021, to June 30, 2022, increasing from 4.44 to 5.69. This indicates an improvement in the company's efficiency in utilizing its fixed assets to generate sales during that period. However, from June 30, 2022, to June 30, 2023, the ratio declines slightly to 5.00, suggesting a marginal reduction in fixed asset efficiency, though it remains higher than the 2021 level. The absence of data for June 30, 2024, and 2025 precludes further trend analysis.

In contrast, the Total Asset Turnover ratio shows relative stability with minor fluctuations across the years. It increased marginally from 0.99 on June 30, 2021, to 1.01 on June 30, 2022, and remains consistent at 1.01 in 2023. A slight increase is observed in June 30, 2024, reaching 1.04, indicating a modest enhancement in overall asset utilization efficiency in that year. However, by June 30, 2025, the ratio drops to 0.95, reflecting a decrease in the efficiency of asset use in generating sales.

Overall, the fixed asset turnover ratio indicates a period of high efficiency in assets utilization, peaking in 2022, before experiencing a slight decline in 2023. The total asset turnover remains relatively stable with slight improvements in 2024 but ultimately declines in 2025, suggesting potential challenges or shifts in the company's asset efficiency over the observed period.