Rockwell Automation Inc (ROK)
Activity ratios
Short-term
Turnover ratios
| Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | Sep 30, 2019 | |
|---|---|---|---|---|---|
| Inventory turnover | 5.44 | 6.21 | 7.33 | 9.01 | 9.31 |
| Receivables turnover | 4.25 | 4.32 | 4.87 | 4.98 | 5.63 |
| Payables turnover | 6.65 | 6.37 | 6.57 | 7.65 | 7.72 |
| Working capital turnover | 5.96 | 194.81 | 97.34 | 7.10 | 6.32 |
Certainly, let's analyze the activity ratios of Rockwell Automation Inc based on the provided data.
1. Inventory Turnover:
The inventory turnover ratio measures how efficiently a company manages its inventory. A declining trend is observed in Rockwell Automation's inventory turnover ratio over the past five years. This could indicate either excessive inventory levels or slowing sales. The company's inventory turnover decreased from 6.59 in 2019 to 3.80 in 2023, reflecting a potential inefficiency in managing its inventory.
2. Receivables Turnover:
The receivables turnover ratio indicates how efficiently a company is collecting its receivables from customers. Rockwell Automation's receivables turnover has slightly declined over the years, dropping from 5.68 in 2019 to 4.18 in 2023. This downward trend suggests a potential slowdown in the collection of receivables, which could impact the company's cash flow and liquidity position.
3. Payables Turnover:
The payables turnover ratio measures how efficiently a company pays its suppliers. Rockwell Automation's payables turnover ratio has shown a fluctuating pattern over the past five years but has remained relatively stable overall. The slight increase from 5.43 in 2020 to 4.64 in 2023 indicates that the company is managing its payables effectively.
4. Working Capital Turnover:
The working capital turnover ratio evaluates how efficiently a company utilizes working capital to generate sales. An exceptionally high value of 201.57 in 2022 could be an anomaly caused by specific circumstances and may not provide a meaningful insight. However, the significant decrease to 5.86 in 2023 suggests a notable shift in the company's working capital efficiency.
In conclusion, the activity ratios of Rockwell Automation Inc indicate various patterns in managing inventory, receivables, payables, and working capital over the years, reflecting changes in operational efficiency and financial management. An in-depth examination of the company's operational processes and market conditions would be necessary to fully understand the implications of these trends.
Average number of days
| Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | Sep 30, 2019 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 67.08 | 58.80 | 49.82 | 40.49 | 39.21 |
| Days of sales outstanding (DSO) | days | 85.95 | 84.52 | 75.02 | 73.34 | 64.89 |
| Number of days of payables | days | 54.92 | 57.34 | 55.54 | 47.69 | 47.31 |
To assess Rockwell Automation Inc's activity ratios, we can analyze the days of inventory on hand (DOH), days of sales outstanding (DSO), and number of days of payables. These ratios provide insights into how efficiently the company manages its inventory, collects its receivables, and pays its suppliers.
The days of inventory on hand have increased from 55.37 days in 2019 to 96.01 days in 2023. This suggests that the company is holding inventory for a longer period, which may indicate lower inventory turnover and potentially overstocking.
The days of sales outstanding have also increased over the years, from 64.26 days in 2019 to 87.34 days in 2023. This indicates that Rockwell Automation Inc is taking longer to collect its receivables, which could potentially signal slow payment from customers or less effective credit management.
On the other hand, the number of days of payables has remained relatively stable, ranging from 66.81 days in 2019 to 78.60 days in 2023. This suggests that the company has been maintaining consistent payment terms with its suppliers.
Overall, these activity ratios indicate that Rockwell Automation Inc may be experiencing challenges in efficiently managing its inventory and collecting receivables. The increase in both DOH and DSO may require closer monitoring to ensure optimal working capital management and improved cash flow.
Long-term
| Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | Sep 30, 2019 | |
|---|---|---|---|---|---|
| Fixed asset turnover | 13.45 | 12.79 | 11.91 | 10.82 | 11.59 |
| Total asset turnover | 0.81 | 0.70 | 0.65 | 0.86 | 1.08 |
The long-term activity ratios of Rockwell Automation Inc indicate the company's efficiency in managing its fixed and total assets to generate sales.
The fixed asset turnover has shown a consistent increase over the last five years, reaching 13.24 in 2023 from 11.71 in 2019. This demonstrates the company's ability to generate $13.24 in sales for every dollar invested in fixed assets, reflecting efficient utilization of long-term assets to drive revenue.
On the other hand, the total asset turnover has fluctuated, decreasing from 1.10 in 2019 to 0.80 in 2023. This suggests a decreasing efficiency in generating sales from total assets over the period.
Overall, Rockwell Automation Inc has exhibited strong management of fixed assets to drive sales, although there has been a decline in the efficiency of utilizing total assets to generate revenue. This pattern should be further analyzed to understand the underlying factors impacting the company's long-term asset management efficiency.