Phibro Animal Health Corporation (PAHC)

Short-term

Turnover ratios

The activity ratios of Phibro Animal Health Corporation over the indicated periods reveal insights into the company's operational efficiency concerning inventory, receivables, payables, and working capital management.

Inventory Turnover: The inventory turnover ratio exhibits relative stability with slight fluctuations throughout the analyzed period. From a high of approximately 2.64 times on September 30, 2020, the ratio shows a gradual downward trend, reaching around 2.38 times by the end of 2023. Notably, there is an abrupt decline to 1.77 in December 2024, suggesting a significant slowdown in inventory sales or increased inventory holdings, followed by a partial recovery to approximately 2.02–2.65 in mid-2025. The prolonged decrease indicates potential challenges in inventory management or shifts in sales volume or product mix.

Receivables Turnover: The receivables turnover ratio demonstrates a generally consistent pattern with minor fluctuations around the 6 times mark. The ratio peaked at approximately 6.73 times at the end of September 2022, implying efficient collection processes during that period. Conversely, the ratio dipped to about 5.66 times in June 2022 and further fluctuated, settling around 6.03 times by June 2025. These dynamics suggest the company's receivables collection cycle has been relatively stable, although variability may reflect seasonal or operational adjustments.

Payables Turnover: The payables turnover ratio indicates some variability but generally maintains a range between approximately 6.18 and 9.20. A notable peak occurs in March 2023 at 8.95 times, implying a period where the company paid its suppliers more frequently or faster. The ratio peaks again at 9.20 in June 2023. Post this period, there is a decline, with the ratio decreasing to approximately 6.18–8.44 towards March 2025, which could reflect deliberate extension of payment terms or changes in supplier relationships.

Working Capital Turnover: This ratio remains relatively stable throughout the sample, with minor fluctuations between approximately 2.16 and 2.66. The highest value appears in September 2024 at 2.66, with lower levels recorded at the end of 2024 and into early 2025 at about 2.16–2.51. Overall, the stability denotes consistent management of working capital in relation to sales, although the dips and peaks may indicate periods of operational adjustment or strategic shifts in working capital deployment.

In summary, Phibro Animal Health Corporation's activity ratios portray a company with stable receivables and payables management during the examined timeframe, albeit with some variability in inventory turnover and significant fluctuations observed in the ending periods, notably in December 2024. These trends could be reflective of strategic or operational changes impacting inventory levels and liquidity management.

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Average number of days

The activity ratios of Phibro Animal Health Corporation, as reflected in the data provided, reveal patterns and trends pertinent to inventory management, receivables collection, and payables payments over the analyzed periods.

Days of Inventory on Hand (DOH):
The company's inventory holding period exhibits variability across the periods. Starting at approximately 138.5 days on September 30, 2020, it increased gradually, reaching a peak of approximately 157.6 days on March 31, 2023. This indicates a trend toward slower inventory turnover, potentially suggesting increased inventory levels or reduced efficiency in inventory management. Notably, from June 30, 2023, onward, there was a marked decrease to around 137.5 days by June 30, 2024, implying improved inventory turnover or tighter inventory controls. However, this figure slightly increased again in the subsequent quarters, reaching approximately 153 days by December 31, 2024, before declining again to around 147.7 days by March 2024, and finally reducing to approximately 137.5 days in June 2024 before rising again in the subsequent period. The most recent data indicates a significant increase in inventory holding period, particularly notable in December 2024 at over 206 days, which suggests potential accumulation of inventory or supply chain challenges, followed by a reduction to approximately 181 days in June 2025. Overall, the pattern indicates periods of inventory accumulation and clearance, with recent periods showing signs of inventory levels stabilizing at lower durations.

Days of Sales Outstanding (DSO):
Receivables collection periods have generally remained within a moderate range, fluctuating between roughly 54 and 65 days over the period. A slight upward trend is observable during 2021 and 2022, where DSO peaks around 64 days, indicating a potential elongation in the collection cycle. Conversely, during 2022 and early 2023, the DSO reduced to approximately 54-57 days, reflecting possibly improved collection efficiency. The latest data shows DSO oscillating around the mid-50s, with a slight increase towards approximately 64 days in June 2025, which could suggest a marginal deterioration in collection periods or changes in credit policies. Overall, the DSO pattern indicates relatively steady, moderate receivables collection times with occasional variations.

Number of Days of Payables:
The company's payables days have remained relatively stable around the low 40s to mid-50s days for most of the period. Initially, from September 2020 to mid-2022, payables days hovered around 42 to 53 days, with a slight increasing trend observed towards the second half of 2022 and early 2023. In recent periods, payables days decreased slightly to below 45 days but then experienced a notable increase to approximately 59 days by March 2025. This rise could indicate extended payment periods to suppliers or changes in payment terms. The fluctuation suggests a strategic approach to managing supplier payments, with the most recent data indicating a potential extension in credit payment terms.

Summary:
Overall, Phibro Animal Health Corporation's activity ratios show a trend toward increasing inventory periods over the long term, with notable peaks suggesting inventory build-up or supply chain inefficiencies, followed by periods of reduction. Receivables collection remains relatively steady with minor fluctuations, indicating stable credit policies. Payables management exhibits consistency but with recent elongation, possibly reflecting strategic extensions of payment terms. These trends collectively suggest a period of operational adjustments, balancing inventory levels, receivables, and payables to optimize working capital management.

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Long-term

The analysis of Phibro Animal Health Corporation’s long-term activity ratios reveals the following insights:

Fixed Asset Turnover:
Throughout the period from September 30, 2020, to June 30, 2023, the fixed asset turnover ratio demonstrates relative stability, with values oscillating between approximately 4.44 and 5.69. The highest point of 5.69 occurs at December 31, 2021, indicating efficient utilization of fixed assets during this period. Conversely, the lowest ratio of 4.44 appears on June 30, 2021, suggesting a temporary decrease in asset utilization efficiency. Overall, the trend indicates that the company has maintained a consistent level of fixed asset productivity over the analyzed period, reflecting stable capital investment and operational effectiveness.

Total Asset Turnover:
The total asset turnover ratio remains relatively steady from September 30, 2020, through June 30, 2023, fluctuating narrowly around 0.99 to 1.02. This consistency indicates that the company has sustained its overall efficiency in generating sales from its total assets during that timeframe. Notably, there is a slight decline observed in the years following, with the ratio dipping below 1.00 in late 2024 and early 2025, reaching approximately 0.86 at December 31, 2024, and around 0.90 to 0.95 in the subsequent quarters. These decreases suggest a potential decline in sales efficiency relative to the total assets employed in operational activities during the later period.

Summary:
Phibro Animal Health Corporation has demonstrated stable long-term activity ratios, with particular strength in fixed asset utilization and overall asset efficiency maintained over multiple fiscal periods. The steady fixed asset turnover suggests effective management of fixed asset investments, while the consistent total asset turnover indicates efficient deployment of total assets in generating revenue. The slight downturn observed in the latter part of 2024 may warrant further analysis to determine if it reflects operational challenges or strategic shifts impacting asset productivity.