PPG Industries Inc (PPG)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Inventory turnover | 5.01 | 5.03 | 4.88 | 4.74 | 4.48 |
| Receivables turnover | — | — | — | — | — |
| Payables turnover | — | — | — | — | — |
| Working capital turnover | 10.27 | 7.68 | 7.20 | 8.42 | 6.98 |
The activity ratios of PPG Industries Inc provide insight into how effectively the company manages its assets and liabilities to generate revenue.
1. Inventory Turnover: PPG Industries Inc's inventory turnover has shown a consistent improvement over the years, increasing from 4.48 in 2020 to 5.01 in 2024. This indicates that the company is selling its inventory more quickly, which can lead to lower holding costs and potential cash flow improvements.
2. Receivables Turnover: The receivables turnover ratio, unfortunately, is not provided for the years analyzed, indicating that we do not have data on how quickly the company collects payments from customers. A higher turnover ratio in this area would typically indicate efficient management of accounts receivable.
3. Payables Turnover: Similarly, payables turnover data is not available for the years under review. This ratio would have provided insight into how quickly the company pays its suppliers, which can impact relationships and cash flow management.
4. Working Capital Turnover: The working capital turnover for PPG Industries Inc fluctuated over the years, with a notable increase in 2024 to 10.27. This ratio measures how effectively the company utilizes its working capital to generate sales. A higher turnover ratio suggests better utilization of resources.
Overall, while the inventory turnover and working capital turnover ratios show positive trends, the lack of data for receivables and payables turnovers limits a comprehensive analysis of how efficiently PPG Industries Inc manages its working capital and relationships with customers and suppliers.
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 | 72.83 | 72.56 | 74.74 | 77.04 | 81.43 |
| Days of sales outstanding (DSO) | days | — | — | — | — | — |
| Number of days of payables | days | — | — | — | — | — |
The activity ratios for PPG Industries Inc can be analyzed as follows:
1. Days of Inventory on Hand (DOH): This ratio measures how many days it takes for the company to sell its inventory. A declining trend in this ratio from 81.43 days in 2020 to 72.83 days in 2024 indicates that PPG Industries is managing its inventory more efficiently, possibly through better inventory management processes or demand forecasting.
2. Days of Sales Outstanding (DSO): Unfortunately, the data provided does not include information on DSO, which is usually used to assess how quickly the company collects its accounts receivable. Without this data, we are unable to evaluate PPG Industries' effectiveness in converting sales into cash.
3. Number of Days of Payables: Similarly, no information is available for the number of days of payables, which would have revealed how quickly the company pays its suppliers. Managing payables effectively can help improve cash flow and liquidity.
In summary, based on the provided data, PPG Industries Inc has shown improvements in its inventory management over the years. However, a complete analysis of the company's activity ratios would require information on DSO and the number of days of payables to assess its overall efficiency in managing working capital.
Long-term
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Fixed asset turnover | — | — | 5.30 | 4.88 | 4.42 |
| Total asset turnover | 0.82 | 0.84 | 0.85 | 0.79 | 0.71 |
Long-term activity ratios provide insights into how efficiently a company manages its assets over an extended period. In the case of PPG Industries Inc, we will focus on two key ratios: Fixed Asset Turnover and Total Asset Turnover.
Fixed Asset Turnover:
- The Fixed Asset Turnover ratio measures how well a company generates revenue from its fixed assets. It indicates the company's ability to efficiently utilize its long-term investments in property, plant, and equipment.
- From 2020 to 2022, PPG Industries Inc's Fixed Asset Turnover ratio has shown a positive trend, increasing from 4.42 to 5.30. This signifies an improvement in the company's ability to generate sales from its fixed assets.
- However, the data for 2023 and 2024 is missing, making it difficult to assess whether this positive trend continues. It may be that there was an issue with data reporting for those years.
Total Asset Turnover:
- The Total Asset Turnover ratio indicates how effectively a company uses its assets to generate sales. A higher ratio suggests better asset utilization.
- PPG Industries Inc's Total Asset Turnover ratio has generally increased from 0.71 in 2020 to 0.82 in 2024, with a minor dip in 2023 to 0.84.
- The increasing trend in the Total Asset Turnover ratio indicates that the company is becoming more efficient in generating revenue from its total assets. However, the slight decline in 2023 may warrant further investigation to understand the reasons behind it.
In conclusion, PPG Industries Inc has shown improving efficiency in utilizing both its fixed assets and total assets to generate sales over the analyzed period. However, more data would be required to fully evaluate the long-term sustainability of these trends, especially given the missing data points for 2023 and 2024.