Parker-Hannifin Corporation (PH)

Activity ratios

Short-term

Turnover ratios

	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	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020	Dec 31, 2019	Sep 30, 2019
Inventory turnover	5.89	5.51	5.32	5.48	5.57	5.05	4.73	4.39	5.97	5.64	5.59	5.57	5.86	6.12	6.25	6.67	6.16	6.21	6.18	6.85
Receivables turnover	91.82	95.66	103.95	115.91	107.71	88.48	82.02	67.43	87.06	81.47	94.73	83.61	83.15	86.06	94.09	102.47	98.82	5.86	6.51	6.52
Payables turnover	8.24	8.33	8.35	8.16	7.90	7.44	7.44	6.80	7.63	7.59	8.07	7.72	7.35	7.48	8.70	9.47	10.88	8.79	9.49	9.53
Working capital turnover	—	—	—	—	—	12.51	10.87	9.84	2.54	5.46	5.68	6.24	5.60	6.65	8.33	8.65	7.12	7.71	8.92	3.52

The activity ratios for Parker-Hannifin Corporation provide insights into the efficiency of the company's management of inventory, receivables, payables, and working capital over the specified period. Here is a detailed analysis based on the provided data:

1. Inventory turnover: The inventory turnover ratio measures how efficiently a company manages its inventory. Parker-Hannifin Corporation's inventory turnover fluctuated between 4.39 and 6.85 over the past few quarters, with an average ratio of approximately 5.74. The company effectively turned over its inventory, on average, around 5.74 times during the period, indicating sound inventory management.

2. Receivables turnover: The receivables turnover ratio indicates how efficiently a company collects on its credit sales. Parker-Hannifin Corporation's receivables turnover ranged from 67.43 to 115.91, with an average of approximately 92.44. The higher turnover rates suggest that the company was efficient in collecting outstanding receivables, with an average collection period of approximately 3.96 days.

3. Payables turnover: The payables turnover ratio reflects how quickly a company pays its suppliers. Parker-Hannifin Corporation's payables turnover varied between 6.80 and 10.88, averaging around 8.40. The higher turnover rates imply that the company managed its payables efficiently, with an average payment period of approximately 43.39 days.

4. Working capital turnover: The working capital turnover ratio measures the efficiency of a company in managing its working capital to generate sales. In the available data, Parker-Hannifin Corporation's working capital turnover ranged from 2.54 to 12.51, averaging approximately 7.02. A higher turnover ratio indicates better utilization of working capital to generate revenue, highlighting the company's effectiveness in this aspect.

In summary, Parker-Hannifin Corporation demonstrates strong efficiency in managing its inventory, receivables, payables, and working capital based on the calculated activity ratios. These ratios suggest that the company has been effective in optimizing its resources to drive operational performance and financial health.

Average number of days

		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	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020	Dec 31, 2019	Sep 30, 2019
Days of inventory on hand (DOH)	days	61.98	66.20	68.55	66.55	65.50	72.31	77.21	83.22	61.18	64.66	65.31	65.48	62.25	59.68	58.43	54.69	59.28	58.75	59.08	53.25
Days of sales outstanding (DSO)	days	3.98	3.82	3.51	3.15	3.39	4.13	4.45	5.41	4.19	4.48	3.85	4.37	4.39	4.24	3.88	3.56	3.69	62.29	56.03	55.97
Number of days of payables	days	44.29	43.83	43.70	44.75	46.20	49.04	49.05	53.66	47.85	48.07	45.21	47.31	49.66	48.78	41.94	38.52	33.55	41.54	38.48	38.30

The days of inventory on hand (DOH) for Parker-Hannifin Corporation have shown some fluctuations over the past several quarters, ranging from a low of 53.25 days to a high of 83.22 days. Generally, the company has been able to manage its inventory efficiently with the DOH typically ranging between 55 to 75 days. A lower DOH implies that the company is able to sell its inventory quickly and may have better inventory management practices in place.

The days of sales outstanding (DSO) have also varied over the quarters, with a range from 3.15 days to 62.29 days. It is worth noting that the DSO spiked significantly in the September 2019 quarter, which could indicate potential issues with collecting receivables efficiently during that period. However, in recent quarters, the DSO has been relatively stable at around 3 to 5 days, indicating that the company has been successful in collecting payments from customers in a timely manner.

In contrast, the number of days of payables demonstrates a downward trend, with a range from 33.55 days to 53.66 days. This could suggest that the company has been extending its payment period to suppliers, which may be seen as a positive strategy to manage working capital effectively. However, it is important for the company to strike a balance between extending payables and maintaining good relationships with suppliers.

Overall, Parker-Hannifin Corporation appears to have relatively efficient activity ratios, with reasonable management of inventory, receivables, and payables. The company's ability to maintain healthy levels for these ratios indicates effective working capital management practices.

Long-term

	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	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020	Dec 31, 2019	Sep 30, 2019
Fixed asset turnover	7.19	6.73	6.63	6.73	6.57	6.36	6.05	5.97	7.39	7.08	6.84	6.59	6.23	5.95	5.77	5.82	5.86	6.07	6.00	7.46
Total asset turnover	0.68	0.65	0.65	0.65	0.63	0.59	0.56	0.55	0.60	0.68	0.67	0.72	0.69	0.67	0.67	0.67	0.68	0.68	0.67	0.72

The long-term activity ratios of Parker-Hannifin Corporation indicate the efficiency of the company in utilizing its assets to generate sales over an extended period. The fixed asset turnover ratio has shown a fluctuating trend over the past few quarters, ranging from 5.77 to 7.46. This ratio reveals that for every dollar invested in fixed assets, the company generated sales of approximately 5.77 to 7.46 dollars, with a recent peak in June 2022.

On the other hand, the total asset turnover ratio has also exhibited variability, ranging from 0.55 to 0.72. This ratio reflects the company's ability to generate sales from all its assets, including current and fixed assets. The total asset turnover has been slightly improving since March 2021, reaching its highest value in September 2022.

Overall, the fixed asset turnover and total asset turnover ratios of Parker-Hannifin Corporation suggest that the company has been efficient in utilizing both its fixed and total assets to generate revenue, with some fluctuations in performance over the quarters. The management may want to further analyze the factors driving these fluctuations to ensure continued operational efficiency and profitability.