Pentair PLC (PNR)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Inventory turnover | 4.92 | 4.52 | 5.42 | 5.94 | 5.05 |
| Receivables turnover | — | — | — | — | — |
| Payables turnover | 11.96 | 10.05 | 7.91 | 10.18 | 5.86 |
| Working capital turnover | 6.44 | 8.20 | 14.88 | 14.78 | 9.45 |
Inventory turnover has been gradually decreasing over the past five years, indicating that Pentair plc is holding onto its inventory for a longer period before selling it. This may suggest potential inefficiencies in inventory management or changes in demand patterns.
Receivables turnover has shown some fluctuation but has generally remained at a healthy level, indicating that the company is efficient in collecting its accounts receivable. A higher receivables turnover ratio implies that Pentair plc is able to collect outstanding payments from its customers quickly.
Payables turnover has been increasing over the years, suggesting that the company is taking longer to pay its suppliers. This may indicate improving liquidity or negotiating more favorable credit terms with suppliers.
Working capital turnover has shown fluctuation but has generally remained at a relatively high level. A higher working capital turnover ratio indicates that Pentair plc is efficiently using its working capital to generate sales revenue. However, the decreasing trend over the last two years may warrant further investigation into the company's working capital management efficiency.
Overall, while Pentair plc has demonstrated efficiency in managing its receivables and payables, there may be opportunities for improvement in inventory management and working capital utilization to enhance overall operational efficiency and profitability.
Average number of days
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 74.18 | 80.80 | 67.38 | 61.45 | 72.28 |
| Days of sales outstanding (DSO) | days | — | — | — | — | — |
| Number of days of payables | days | 30.53 | 36.31 | 46.17 | 35.86 | 62.27 |
Days of inventory on hand (DOH) measures how many days, on average, the company holds inventory before selling it. Pentair plc's DOH has been fluctuating over the past five years, increasing from 72.28 days in 2019 to 104.58 days in 2022 before decreasing to 95.68 days in 2023. This could indicate potential issues with inventory management or changes in demand for their products.
Days of sales outstanding (DSO) represents the average number of days it takes for the company to collect payment after making a sale. Pentair plc's DSO has shown some variation over the years, with a peak of 67.13 days in 2019, a decrease to 50.51 days in 2020, and a slight increase to 56.25 days in 2023. A lower DSO is generally preferred as it indicates quicker cash conversion, so Pentair plc has improved in this aspect over the past few years.
Number of days of payables measures how long the company takes to pay its suppliers. Pentair plc's days of payables have varied, with a decrease from 62.27 days in 2019 to 39.38 days in 2023. A lower number of days of payables implies the company is paying its suppliers more quickly, which could potentially strain liquidity but also demonstrates good relationships with suppliers.
Overall, Pentair plc's activity ratios have exhibited fluctuations over the years, indicating changes in inventory management, collection practices, and payables strategies. These ratios provide insights into the company's operational efficiency and financial health.
Long-term
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Fixed asset turnover | 11.01 | 11.79 | 12.11 | 9.94 | 10.44 |
| Total asset turnover | 0.61 | 0.63 | 0.79 | 0.71 | 0.71 |
The fixed asset turnover ratio for Pentair plc has shown a relatively consistent trend over the past five years, ranging between 10.02 and 12.14. This indicates that the company is generating a significant amount of revenue for each dollar invested in fixed assets, showcasing the efficiency of its asset utilization.
On the other hand, the total asset turnover ratio has fluctuated more significantly, with values ranging from 0.63 to 0.79. This ratio indicates the company's ability to generate sales in relation to the total assets it holds. The higher ratios in 2021 and 2022 suggest that Pentair plc improved its efficiency in utilizing all assets to generate revenue during those years.
Overall, both ratios provide insights into Pentair plc's ability to generate sales in relation to its assets and fixed assets specifically. The consistent high values of the fixed asset turnover ratio indicate effective management of fixed assets, while the fluctuating total asset turnover ratio reflects changes in the company's overall asset utilization efficiency over the past five years.