PPG Industries Inc (PPG)
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 | 5.54 | 6.99 | 6.17 | 5.92 | 6.87 | 6.54 | 6.34 | 6.33 | 6.73 | 5.72 | 5.38 | 5.75 | 6.15 | 6.37 | 6.37 | 6.28 | 6.91 | 6.40 | 4.97 | 3.70 |
| Receivables turnover | 5.53 | 4.95 | 4.64 | 4.90 | 5.31 | 4.99 | 4.62 | 4.74 | 5.37 | 4.87 | 4.49 | 4.71 | 5.06 | 4.82 | 5.18 | 5.31 | 5.49 | 4.99 | 4.53 | 4.76 |
| Payables turnover | 4.51 | — | — | — | 6.15 | — | — | — | 5.34 | — | — | — | 4.73 | — | — | — | 5.64 | — | — | — |
| Working capital turnover | 7.62 | 7.30 | 6.69 | 5.30 | 7.16 | 6.89 | 6.81 | 7.07 | 8.42 | 8.97 | 8.03 | 6.44 | 7.01 | 5.74 | 7.51 | 7.96 | 8.43 | 6.75 | 7.55 | 8.35 |
Activity ratios provide insights into how efficiently a company is managing its assets and liabilities to generate revenue.
1. Inventory turnover: PPG Industries, Inc. has shown a consistent trend of improving inventory turnover over the past eight quarters, with the ratio ranging from 4.23 to 5.05. This indicates that the company is effectively managing its inventory levels and selling products quickly.
2. Receivables turnover: The receivables turnover ratio has also been fairly stable, ranging from 4.60 to 5.56 over the same period. This suggests that PPG Industries is efficient in collecting payments from customers and converting credit sales into cash.
3. Payables turnover: The payables turnover ratio was not available for quarters other than Q4 2022 and Q4 2023, with values of 4.11 and 4.37 respectively. A higher payables turnover ratio indicates that the company is paying its suppliers more frequently, which can positively impact cash flow.
4. Working capital turnover: PPG Industries has demonstrated a varying working capital turnover ratio, fluctuating between 5.33 and 7.68 over the past eight quarters. A higher working capital turnover ratio signifies that the company is utilizing its working capital efficiently to generate sales revenue.
Overall, PPG Industries appears to be effectively managing its assets and liabilities to drive operational efficiency and optimize its working capital cycle. By closely monitoring these activity ratios, investors and stakeholders can gain valuable insights into the company's operational performance and financial health.
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 | 65.83 | 52.25 | 59.16 | 61.62 | 53.16 | 55.82 | 57.57 | 57.68 | 54.23 | 63.82 | 67.88 | 63.46 | 59.33 | 57.33 | 57.29 | 58.09 | 52.79 | 57.05 | 73.44 | 98.70 |
| Days of sales outstanding (DSO) | days | 66.05 | 73.70 | 78.65 | 74.53 | 68.69 | 73.21 | 78.99 | 76.95 | 68.02 | 74.92 | 81.23 | 77.50 | 72.15 | 75.71 | 70.47 | 68.74 | 66.48 | 73.17 | 80.53 | 76.73 |
| Number of days of payables | days | 80.84 | — | — | — | 59.39 | — | — | — | 68.29 | — | — | — | 77.25 | — | — | — | 64.76 | — | — | — |
The activity ratios for PPG Industries, Inc. indicate how efficiently the company manages its inventory, collects its receivables, and pays its payables.
1. Days of Inventory on Hand (DOH): PPG Industries has shown a fluctuating trend in managing its inventory over the past eight quarters, ranging from a low of 72.25 days to a high of 86.29 days. Generally, a lower number of days of inventory on hand is preferred as it signifies faster inventory turnover, reducing holding costs and the risk of obsolescence. The company should aim to lower its DOH to improve efficiency in managing inventory.
2. Days of Sales Outstanding (DSO): The company's DSO has shown variability over the quarters, ranging from 65.59 days to 77.89 days. A lower DSO indicates that the company is collecting its receivables quickly, which is favorable for cash flow. However, the trend suggests that PPG Industries may need to focus on improving its credit and collection policies to reduce the number of days sales remain outstanding.
3. Number of Days of Payables: Data for payables days is incomplete in some quarters but indicates an increasing trend in the past available data. A higher number of days of payables suggests that the company is taking longer to pay its suppliers, which can help with cash flow management but may strain supplier relationships. PPG Industries should monitor the trend in payables days to ensure it remains within industry norms.
Overall, PPG Industries should focus on optimizing its inventory management, receivables collection, and payables payment processes to enhance operational efficiency and cash flow management.
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 | 4.97 | 5.25 | 5.19 | 5.25 | 5.27 | 5.62 | 5.49 | 5.22 | 4.91 | 4.92 | 4.59 | 4.68 | 4.41 | 4.73 | 4.83 | 5.20 | 5.07 | 5.28 | 5.16 | 5.31 |
| Total asset turnover | 0.84 | 0.83 | 0.80 | 0.80 | 0.85 | 0.85 | 0.82 | 0.79 | 0.79 | 0.75 | 0.70 | 0.71 | 0.71 | 0.75 | 0.76 | 0.82 | 0.85 | 0.84 | 0.84 | 0.88 |
The fixed asset turnover ratio for PPG Industries, Inc. has shown some fluctuation over the past eight quarters, ranging from a low of 5.01 in Q4 2023 to a high of 5.62 in Q3 2022. This ratio measures the efficiency with which the company generates sales from its fixed assets, indicating how well the company is utilizing its long-term assets to generate revenue. A higher fixed asset turnover ratio is generally preferred as it suggests that the company is generating more revenue per dollar invested in fixed assets.
On the other hand, the total asset turnover ratio has also demonstrated variability over the same period, ranging from 0.79 in Q1 2022 to 0.85 in Q4 2022 and Q3 2022. This ratio evaluates the company's ability to generate sales from its total assets, including both fixed and current assets. A higher total asset turnover ratio implies that the company is effectively using its total assets to generate revenue.
Overall, both ratios indicate that PPG Industries, Inc. has been efficient in utilizing its assets to generate sales, with the fixed asset turnover ratio consistently higher than the total asset turnover ratio. This suggests that the company is effectively managing its fixed assets to drive revenue growth. The fluctuation in these ratios over the periods may be due to changes in business operations, investments in new assets, or variations in sales volume.