Resideo Technologies Inc (REZI)

Short-term

Turnover ratios

Based on the data provided for Resideo Technologies Inc, let's analyze the activity ratios:

1. Inventory Turnover:
- The inventory turnover measures how efficiently a company manages its inventory by calculating how many times the inventory is sold and replaced in a given period.
- We observe an increasing trend in inventory turnover from 5.59 in 2020 to 5.79 in 2021 before declining to 4.72 in 2022 and further to 3.93 in 2024.
- Generally, a higher inventory turnover indicates better inventory management and faster sales.

2. Receivables Turnover:
- Unfortunately, there is no data provided for receivables turnover, which makes it challenging to assess how quickly Resideo collects its outstanding receivables from customers.
- Typically, a higher receivables turnover implies efficient credit and collection policies.

3. Payables Turnover:
- Similar to receivables turnover, data is not available for payables turnover, making it difficult to evaluate how fast Resideo pays its suppliers.
- A higher payables turnover ratio usually suggests that the company is efficiently managing its payables.

4. Working Capital Turnover:
- The working capital turnover ratio shows how effectively a company utilizes its working capital to generate sales.
- We observe fluctuations in the working capital turnover ratio over the years, from 7.38 in 2020 to 4.89 in 2024, indicating varying efficiency in utilizing working capital.
- A higher working capital turnover ratio generally implies better efficiency in generating sales from the working capital available.

In conclusion, while Resideo Technologies Inc demonstrates reasonably strong inventory turnover and working capital turnover ratios, the lack of data for receivables turnover and payables turnover limits a comprehensive assessment of the company's efficiency in managing its receivables and payables. Monitoring these ratios over time can provide valuable insights into the company's operational efficiency and financial health.

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Average number of days

Resideo Technologies Inc's activity ratios indicate the efficiency of the company in managing its inventory, receivables, and payables.

1. Days of Inventory on Hand (DOH):
- The trend in Resideo's DOH shows a slight increase over the years, from 65.27 days in 2020 to 92.90 days in 2024. This suggests that the company is holding onto inventory for a longer period.
- A higher DOH may indicate overstocking or slow-moving inventory, which can tie up resources and potentially lead to increased storage costs.

2. Days of Sales Outstanding (DSO):
- The data indicates that DSO information is not available for the years provided, meaning we lack insight into the company's efficiency in collecting receivables.
- A lower DSO would typically be preferred as it signifies faster collections and improved cash flow.

3. Number of Days of Payables:
- The information on the days of payables is also not provided, making it difficult to evaluate how long Resideo takes to pay its suppliers.
- Monitoring this metric is essential as a longer period of days of payables can suggest the company is stretching its payment terms, potentially straining supplier relationships.

In conclusion, while the DOH trend suggests a need to monitor inventory management closely, the absence of data on DSO and days of payables limits a comprehensive assessment of Resideo Technologies Inc's overall efficiency in managing its working capital and operating cycle.

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Long-term

The fixed asset turnover ratio measures how efficiently a company is utilizing its fixed assets to generate revenue.

For Resideo Technologies Inc:
1. In 2020, the fixed asset turnover was 15.95, indicating that for every dollar of fixed assets, the company generated $15.95 in sales.
2. In 2021, the ratio improved to 20.37, showing that the company became more efficient in utilizing its fixed assets to generate revenue.
3. In 2022, the ratio decreased slightly to 17.40, still indicating a good level of efficiency.
4. The data for 2023 and 2024 are unavailable.

The total asset turnover ratio measures how effectively a company is utilizing all its assets to generate revenue.

For Resideo Technologies Inc:
1. In 2020, the total asset turnover was 0.90, suggesting that the company generated $0.90 in sales for every dollar of assets.
2. In 2021 and 2022, the ratio improved to 1.00, indicating that the company was able to generate sales equal to its total assets.
3. In 2023, the ratio dropped slightly to 0.94, still showing a relatively good level of efficiency.
4. In 2024, the ratio decreased further to 0.82, indicating a potential decline in the company's ability to generate sales relative to its total assets.

Overall, the fixed asset turnover ratios suggest improvements in efficiency over the years, while the total asset turnover ratios showed variations but generally indicated a reasonable level of asset utilization for revenue generation.