Philip Morris International Inc (PM)

Activity ratios

Short-term

Turnover ratios

	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	Jun 30, 2019	Mar 31, 2019
Inventory turnover	1.38	1.48	1.42	1.20	1.26	1.75	1.62	1.37	1.33	1.37	1.27	1.21	1.15	1.42	1.31	1.35	1.33	1.45	1.50	3.10
Receivables turnover	12.30	15.53	19.03	21.80	21.18	21.10	20.98	22.78	26.08	19.26	17.58	18.75	21.13	19.50	18.67	23.64	21.17	20.44	18.29	21.57
Payables turnover	3.59	4.03	3.70	3.25	3.05	3.75	3.72	3.71	3.48	3.99	4.20	4.31	3.96	5.37	5.91	5.89	5.34	7.28	7.25	14.24
Working capital turnover	—	—	—	—	—	—	—	—	—	—	32.27	32.90	46.45	45.36	44.17	328.26	53.39	58.52	—	—

The inventory turnover ratio for Philip Morris International Inc has shown fluctuations over the quarters in the data provided. The ratio indicates how efficiently the company is managing its inventory levels. A higher ratio implies faster inventory turnover, which can be beneficial in terms of liquidity and minimizing holding costs. However, a consistently low ratio may indicate excess inventory or slow-moving stock.

The receivables turnover ratio, on the other hand, has varied significantly across quarters. This ratio reflects how well the company is collecting outstanding receivables from its customers. A higher ratio suggests efficient management of credit sales and timely collection, while a declining ratio may raise concerns about the company's credit policies or the creditworthiness of its customers.

The payables turnover ratio for Philip Morris International Inc has also shown some variability over the quarters. This ratio assesses how quickly the company is paying its suppliers. A higher ratio indicates that the company is efficiently using its trade credit and managing its payables well. However, a consistently low ratio may imply potential liquidity issues or strained supplier relationships.

The working capital turnover ratio data is absent, making it challenging to evaluate how effectively the company is utilizing its working capital to generate sales revenue. Working capital turnover is essential for assessing the efficiency of the company's capital management and operational performance. The lack of this data hinders a comprehensive analysis of Philip Morris International Inc's overall activity ratios.

Average number of days

		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	Jun 30, 2019	Mar 31, 2019
Days of inventory on hand (DOH)	days	264.05	247.20	257.72	305.34	290.13	208.28	225.76	266.87	274.21	265.81	287.33	301.16	318.19	257.60	278.18	270.61	274.49	251.10	243.36	117.70
Days of sales outstanding (DSO)	days	29.68	23.50	19.18	16.75	17.23	17.30	17.40	16.03	13.99	18.95	20.76	19.47	17.27	18.72	19.55	15.44	17.24	17.86	19.95	16.92
Number of days of payables	days	101.54	90.55	98.56	112.45	119.62	97.31	98.04	98.43	104.75	91.39	86.96	84.71	92.23	68.03	61.76	62.02	68.33	50.17	50.35	25.64

To analyze the activity ratios of Philip Morris International Inc, we will focus on the Days of Inventory on Hand (DOH), Days of Sales Outstanding (DSO), and Number of Days of Payables.

1. Days of Inventory on Hand (DOH):
- The company's DOH has shown some fluctuations over the past quarters, ranging from 237.39 days to 330.45 days.
- A higher DOH indicates that the company is holding onto inventory for a longer period before it is sold.
- The Q1 2023 DOH of 330.45 days is notably high compared to previous quarters, suggesting potential inefficiencies in inventory management.
- Overall, Philip Morris should aim to reduce its DOH to improve inventory turnover and optimize working capital.

2. Days of Sales Outstanding (DSO):
- The DSO for Philip Morris has varied significantly, ranging from 45.57 days to 204.44 days.
- A lower DSO indicates that the company is collecting receivables more efficiently.
- The unusually high DSO in Q3 2023 at 204.44 days may signal issues with collecting sales revenues promptly.
- Monitoring and improving the DSO can enhance cash flow and liquidity for the company.

3. Number of Days of Payables:
- The number of days of payables for Philip Morris has been relatively stable, with fluctuations between 102.00 days to 130.48 days.
- A higher number of days of payables suggests that the company is taking longer to pay its suppliers.
- The Q4 2022 highest value of 130.48 days indicates a longer payment period to suppliers compared to other quarters.
- Managing payables effectively is essential to maintain good supplier relations and optimize cash flow.

In conclusion, Philip Morris International Inc should focus on reducing its Days of Inventory on Hand and Days of Sales Outstanding to enhance efficiency and cash flow management. Additionally, maintaining a balanced approach to managing the Number of Days of Payables is crucial for sustaining supplier relationships and working capital optimization.

Long-term

	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	Jun 30, 2019	Mar 31, 2019
Fixed asset turnover	7.29	10.80	13.64	17.04	17.50	20.69	19.56	19.38	19.19	15.53	15.44	14.90	13.70	14.26	14.17	14.89	13.53	13.49	12.80	12.89
Total asset turnover	0.83	1.18	1.54	1.86	1.87	2.85	2.85	2.79	2.82	2.26	2.27	2.23	1.95	2.23	2.24	2.43	2.09	2.16	2.22	2.34

The fixed asset turnover ratio represents how efficiently a company is utilizing its fixed assets to generate sales. In the case of Philip Morris International Inc, the fixed asset turnover ratio has shown some fluctuations over the past eight quarters. The ratio ranged from a low of 1.24 in Q3 2023 to a high of 5.46 in Q3 2022. Generally, a higher fixed asset turnover ratio indicates better efficiency in utilizing fixed assets.

On the other hand, the total asset turnover ratio indicates how effectively a company is using all of its assets to generate sales. Philip Morris International Inc's total asset turnover ratio also displayed variability during the same period, ranging from 0.14 in Q3 2023 to 0.77 in Q2 2022. A higher total asset turnover ratio reflects a more efficient utilization of all assets to generate revenue.

It is essential to closely monitor these long-term activity ratios to assess Philip Morris International Inc's ability to generate sales relative to its fixed and total assets. Fluctuations in these ratios could signify changes in the company's operational efficiency and asset management strategies over time.