Pentair PLC (PNR)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Inventory turnover | 5.40 | 4.92 | 4.52 | 5.42 | 5.94 |
| Receivables turnover | — | — | — | — | — |
| Payables turnover | 12.10 | 11.96 | 10.05 | 7.91 | 10.18 |
| Working capital turnover | 7.38 | 6.44 | 8.20 | 14.88 | 14.78 |
The activity ratios of Pentair PLC provide insights into how effectively the company manages its resources and operational efficiency.
1. Inventory Turnover: Pentair PLC's inventory turnover ratio has shown fluctuations over the years, declining from 5.94 in 2020 to 4.52 in 2022, before slightly improving to 5.40 in 2024. A high inventory turnover indicates that the company is efficiently selling its inventory and not holding excessive stock, which can potentially reduce storage costs and minimize obsolete inventory risks.
2. Receivables Turnover: The data provided does not include receivables turnover figures, which would have indicated how quickly the company collects payments from customers. A high receivables turnover ratio would suggest that Pentair PLC efficiently collects cash from credit sales.
3. Payables Turnover: Pentair PLC's payables turnover ratio has been relatively consistent, with an increasing trend from 10.18 in 2020 to 12.10 in 2024. A high payables turnover ratio indicates that the company is effectively managing its accounts payable by paying suppliers promptly, which can enhance supplier relationships and potentially provide early payment discounts.
4. Working Capital Turnover: The working capital turnover ratio has shown a declining trend for Pentair PLC, dropping from 14.78 in 2020 to 7.38 in 2024. A decreasing working capital turnover ratio may suggest inefficiencies in utilizing working capital to generate sales revenue, indicating potential challenges in managing the company's short-term assets and liabilities effectively.
Overall, Pentair PLC's activity ratios reflect variations in managing inventory, payables, and working capital over the years, highlighting opportunities for improvement in optimizing operational efficiency and resource utilization.
Average number of days
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 67.55 | 74.18 | 80.80 | 67.38 | 61.45 |
| Days of sales outstanding (DSO) | days | — | — | — | — | — |
| Number of days of payables | days | 30.17 | 30.53 | 36.31 | 46.17 | 35.86 |
Based on the provided data for Pentair PLC, let's analyze the activity ratios:
1. Days of Inventory on Hand (DOH):
- December 31, 2020: 61.45 days
- December 31, 2021: 67.38 days
- December 31, 2022: 80.80 days
- December 31, 2023: 74.18 days
- December 31, 2024: 67.55 days
The DOH ratio measures the number of days a company holds its inventory before selling it. Pentair PLC's DOH has been fluctuating over the years, showing an increase from 2020 to 2022 but a slight decrease in 2024. An increasing DOH may indicate slower inventory turnover or potential issues with managing inventory levels efficiently.
2. Days of Sales Outstanding (DSO):
- December 31, 2020: Not provided
- December 31, 2021: Not provided
- December 31, 2022: Not provided
- December 31, 2023: Not provided
- December 31, 2024: Not provided
Unfortunately, DSO data is not available for analysis. DSO measures the average number of days it takes for a company to collect revenue after a sale is made. A lower DSO is generally favorable as it indicates faster cash conversion.
3. Number of Days of Payables:
- December 31, 2020: 35.86 days
- December 31, 2021: 46.17 days
- December 31, 2022: 36.31 days
- December 31, 2023: 30.53 days
- December 31, 2024: 30.17 days
The number of days of payables shows how many days on average a company takes to pay its suppliers. Pentair PLC's payables turnover has shown some fluctuations, with an increase in 2021 followed by a decrease in 2024. A lower number of days of payables may indicate that the company is paying its suppliers more quickly.
Overall, a comprehensive analysis of activity ratios such as DOH, DSO, and payables turnover provides insights into Pentair PLC's efficiency in managing inventory, collecting receivables, and managing payables.
Long-term
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Fixed asset turnover | 11.13 | 11.01 | 11.79 | 12.11 | 9.94 |
| Total asset turnover | 0.62 | 0.61 | 0.63 | 0.79 | 0.71 |
The Fixed Asset Turnover ratio for Pentair PLC has shown a consistent improvement from 9.94 in 2020 to 11.13 in 2024. This indicates that the company is generating more revenue per dollar of fixed assets invested over the years.
On the other hand, the Total Asset Turnover ratio has been fluctuating, with a slight increase from 0.71 in 2020 to 0.79 in 2021, followed by a decline to 0.61 in 2023, and a slight increase to 0.62 in 2024. This suggests that Pentair is generating less revenue per dollar of total assets in recent years compared to 2021.
Overall, the Fixed Asset Turnover ratio reflects an efficient utilization of fixed assets by Pentair, while the fluctuating trend in Total Asset Turnover indicates the need for the company to further optimize its use of total assets to improve revenue generation efficiency.