Parker-Hannifin Corporation (PH)

Activity ratios

Short-term

Turnover ratios

	Jun 30, 2025	Mar 31, 2025	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	Sep 30, 2020
Inventory turnover	4.41	4.44	4.52	4.45	4.58	4.29	4.13	4.27	4.34	4.04	3.87	3.68	5.06	4.73	4.68	4.65	4.99	5.24	5.34	5.66
Receivables turnover	6.15	6.31	7.24	6.60	6.23	6.15	6.49	6.25	5.85	5.42	5.61	5.24	5.50	5.77	6.49	6.97	5.64	5.50	6.25	6.28
Payables turnover	5.89	6.33	7.07	6.54	6.41	6.47	6.48	6.34	6.16	5.95	6.09	5.70	6.47	6.36	6.76	6.44	6.26	6.41	7.44	8.04
Working capital turnover	17.55	17.02	55.12	—	—	—	—	—	—	12.56	10.86	9.78	2.56	5.54	5.77	6.34	5.69	6.73	8.48	8.82

The activity ratios for Parker-Hannifin Corporation over the examined period reflect several noteworthy trends and shifts in operational efficiency, particularly concerning inventory management, receivables collection, payables management, and working capital utilization.

Inventory Turnover:
The inventory turnover ratio demonstrates a declining trend from 5.66 times as of September 30, 2020, to a low of approximately 3.68 times on September 30, 2022. Subsequently, there is a gradual recovery, with the ratio reaching 4.58 times by June 30, 2024, before slightly declining again to 4.41 times by June 30, 2025. The initial decrease suggests an accumulation or slower movement of inventory, potentially hinting at excess stock or supply chain delays, which then improves as inventory turns more frequently relative to sales.

Receivables Turnover:
Receivables turnover ratios exhibit a general upward trend, rising from 6.28 times on September 30, 2020, to a peak of around 7.24 times on December 31, 2024. This increase implies an enhancement in the efficiency of collecting outstanding accounts receivable over the period, reducing the days sales outstanding (DSO) and thus improving cash flow management.

Payables Turnover:
The payables turnover ratio shows some fluctuations but remain relatively stable, with values generally oscillating around 6 to 8 times across the period. Early in the period, it peaks at 8.04 times (September 2020) and declines to a low of approximately 5.70 times on September 30, 2022. In later periods, the ratio stabilizes near 6.30 to 6.50 times, indicating a consistent approach to managing accounts payable and supplier credit terms.

Working Capital Turnover:
The working capital turnover ratio exhibits considerable variability. It peaks notably at 12.56 times as of March 31, 2023, reflecting a period of high efficiency in utilizing working capital to generate sales. However, there is a significant drop to undefined or unreported figures in subsequent periods, which may be due to changes in financial statement presentation or data reporting. In the latest available data (December 31, 2024), the ratio re-emerges at 55.12 times, suggesting improved efficiency in working capital utilization.

Overall Assessment:
The trends indicate that Parker-Hannifin strategized towards more efficient receivables collection over time, while inventory levels temporarily accumulated before a recovery in turnover rates. The stabilization of payables suggests balanced supplier relationships. The fluctuations in working capital turnover reveal dynamic management of operational assets, with periods of heightened efficiency balancing out prior inefficiencies. Collectively, these activity ratios suggest the company has managed to improve certain operational efficiencies over the recent years, though some volatility remains, reflecting ongoing adjustments in operational practices and market conditions.

Average number of days

		Jun 30, 2025	Mar 31, 2025	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	Sep 30, 2020
Days of inventory on hand (DOH)	days	82.81	82.15	80.72	82.08	79.65	85.14	88.37	85.57	84.07	90.41	94.35	99.31	72.08	77.19	77.95	78.43	73.13	69.63	68.33	64.46
Days of sales outstanding (DSO)	days	59.36	57.80	50.43	55.34	58.55	59.31	56.22	58.36	62.42	67.30	65.12	69.70	66.39	63.26	56.25	52.39	64.72	66.37	58.42	58.15
Number of days of payables	days	62.01	57.66	51.62	55.82	56.92	56.38	56.34	57.54	59.29	61.31	59.94	64.03	56.37	57.39	53.96	56.67	58.34	56.91	49.05	45.41

The activity ratios for Parker-Hannifin Corporation, specifically Days of Inventory on Hand (DOH), Days of Sales Outstanding (DSO), and Days of Payables, demonstrate notable trends over the period from September 2020 through June 2025.

Days of Inventory on Hand (DOH):
The DOH metric exhibits an increasing trend from approximately 64.5 days in September 2020 to a peak of around 99.3 days in September 2022. Subsequently, there is a decline, with the figure stabilizing around 79.7 days by June 2024. The fluctuations indicate periods of inventory buildup and clearance, potentially reflecting changes in production cycles, demand fluctuations, or supply chain adjustments. The recent stabilization suggests a potential normalization of inventory levels, although they remain elevated compared to the early period, possibly implying a strategic inventory accumulation or lingering supply chain challenges.

Days of Sales Outstanding (DSO):
The DSO shows variability but generally remains within a range of approximately 52 to 69 days. After reaching a low of around 52.4 days in September 2021, DSO fluctuates but trends downward slightly, reaching approximately 55.3 days in September 2024. This pattern signifies that the company has maintained a relatively consistent collection period, with minor fluctuations possibly attributable to changes in credit policies, customer payment behavior, or product lines. The relatively stable DSO suggests effective receivables management over the period.

Number of Days of Payables:
The number of days of payables generally fluctuates between approximately 45 and 64 days during the period. Notably, payables reach their maximum of about 64 days in September 2022, indicating a period where the company delayed payments more than usual, possibly due to cash flow strategies or supplier negotiations. In recent periods, payables have remained closer to 56 days, indicative of a balanced approach toward managing supplier payments.

Overall Interpretation:
The activity ratios collectively depict a company experiencing a significant inventory accumulation phase culminating around September 2022, followed by a gradual reduction in inventory levels. Despite these fluctuations, receivable collection efficiency has remained fairly consistent, demonstrating stable credit management practices. The payables period shows a tendency to fluctuate, with occasional extensions, suggesting active management of working capital and cash flows.

These trends provide insights into Parker-Hannifin’s operational strategies—initial inventory buildup could reflect anticipation of demand changes or efforts to replenish stock, while stabilization in receivables and payables indicates mature management of operational cycles. Continuous monitoring of these ratios is advisable to evaluate how the company adjusts its working capital policies in response to market and operational conditions.

Long-term

	Jun 30, 2025	Mar 31, 2025	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	Sep 30, 2020
Fixed asset turnover	—	7.02	7.11	7.04	—	—	—	6.93	6.65	6.38	6.05	5.93	7.47	7.19	6.94	6.69	6.33	6.02	5.87	5.93
Total asset turnover	0.67	0.68	0.70	0.68	0.68	0.67	0.67	0.67	0.64	0.60	0.56	0.55	0.61	0.69	0.68	0.74	0.71	0.68	0.68	0.69

The analysis of Parker-Hannifin Corporation’s long-term activity ratios over the period up to September 2023 reveals insightful trends into the company's asset utilization efficiency. The Fixed Asset Turnover ratio, which measures how effectively fixed assets are employed to generate sales, exhibits a general upward trajectory from 5.93 on September 30, 2020, reaching a peak of approximately 7.04 by September 30, 2024. This consistent increase suggests improvements in the company's ability to derive revenue from its fixed assets, potentially attributable to operational efficiencies or strategic asset management initiatives.

Similarly, the Total Asset Turnover ratio indicates relatively stable, yet modest fluctuations within the range of approximately 0.55 to 0.74 during the same timeframe. It shows a slight declining trend during 2022, dipping to 0.55 by September 30, 2022, before gradually rising back to around 0.68-0.70 levels by late 2024 and early 2025. This indicates that, overall, the company maintains a consistent efficiency in utilizing its total assets to generate sales, though the period during 2022 reflects some compression in asset utilization efficiency, possibly due to operational or macroeconomic factors.

The upward trend in fixed asset efficiency combined with the relatively stable total asset turnover ratios suggests a focused enhancement in the productivity of fixed assets, without a significant change in the broader asset base's effectiveness in generating revenue. The stabilization and gradual improvement of total asset turnover in late 2023 and into 2024 imply a strategic or operational stabilization phase, further reinforcing the company's ability to utilize its assets effectively over time.

Overall, Parker-Hannifin Corporation demonstrates an improving trend in the utilization of fixed assets, aligned with stable to slightly improving total asset turnover ratios, indicative of operational efficiencies and asset management practices that have enhanced long-term activity performance over the analyzed period.