Raytheon Technologies Corp (RTX)

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	0.53	0.50	0.50	0.50	0.54	0.56	0.58	0.61	0.64	1.97	3.16	4.30	5.11	4.36	3.75	3.02	3.82	3.49	3.96	4.50
Receivables turnover	6.36	6.67	7.13	6.81	7.36	7.15	6.28	7.15	6.66	6.69	6.99	6.03	6.11	5.13	5.11	3.49	5.19	3.80	4.15	4.58
Payables turnover	0.58	0.59	0.59	0.57	0.58	0.65	0.60	0.72	0.67	2.14	3.75	4.45	5.56	5.27	5.35	3.17	4.43	3.62	3.89	4.55
Working capital turnover	41.62	44.25	16.99	12.76	20.15	19.15	17.77	11.41	9.75	8.11	10.24	9.77	7.52	6.52	6.94	6.21	3.03	22.99	34.74	15.56

Activity ratios provide insight into how efficiently a company manages its assets and liabilities to generate sales or revenue.

1. Inventory turnover:
RTX Corp's inventory turnover has been relatively stable, ranging from 4.60 to 5.03 over the past eight quarters. A higher inventory turnover ratio indicates that the company is selling its inventory more quickly, which can reduce the risk of obsolescence and storage costs. RTX Corp's inventory turnover indicates that the company effectively manages its inventory levels.

2. Receivables turnover:
The receivables turnover ratio measures how quickly a company collects its accounts receivable. RTX Corp's receivables turnover has fluctuated but generally remained above 6.0, indicating that the company efficiently collects payments from its customers. A higher ratio suggests better credit control and collection practices.

3. Payables turnover:
The payables turnover ratio reflects how fast a company pays its suppliers. RTX Corp's payables turnover has fluctuated but generally remains between 5.31 and 6.28. A higher payables turnover ratio may indicate that the company is paying its suppliers quicker, possibly taking advantage of discounts or managing cash effectively.

4. Working capital turnover:
Working capital turnover measures how effectively a company utilizes its working capital to generate revenue. RTX Corp's working capital turnover has varied significantly, from 11.41 to 44.25 over the past eight quarters. A higher ratio suggests better management of working capital and more efficient use of resources to drive sales. The significant fluctuations in this ratio may indicate changes in the company's business activities or financial strategies.

Overall, RTX Corp's activity ratios suggest that the company is managing its assets and liabilities efficiently to drive sales and revenue generation. By analyzing these ratios over time, investors and analysts can assess the company's operational effectiveness and financial performance.

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	695.12	723.16	729.94	723.04	676.18	646.93	632.68	596.04	571.47	185.48	115.50	84.86	71.48	83.73	97.46	120.85	95.44	104.60	92.26	81.13
Days of sales outstanding (DSO)	days	57.40	54.72	51.22	53.60	49.56	51.04	58.11	51.08	54.77	54.60	52.22	60.58	59.69	71.19	71.48	104.53	70.37	96.07	87.95	79.64
Number of days of payables	days	631.43	619.04	616.22	642.17	630.26	558.59	607.11	505.62	544.88	170.55	97.29	82.04	65.62	69.27	68.25	115.28	82.46	100.86	93.74	80.27

RTX Corp's activity ratios provide insights into its efficiency in managing inventory, collecting receivables, and paying its suppliers.

1. Days of Inventory on Hand (DOH): RTX's average DOH over the four quarters of 2023 has been consistently in the range of 75 to 79 days. This indicates that, on average, RTX holds inventory for approximately 2 to 3 months before selling it. It is crucial for the company to monitor inventory levels closely to avoid excessive holding costs and potential obsolescence.

2. Days of Sales Outstanding (DSO): RTX's DSO has fluctuated between 51 to 58 days throughout the quarters of 2023 with a decreasing trend towards the end of the year. This implies that RTX takes, on average, 51 to 58 days to collect payments from customers after a sale. A decreasing trend in DSO indicates improved efficiency in collecting receivables and ensuring a healthy cash flow.

3. Number of Days of Payables: RTX's days of payables have shown some variability across the quarters of 2023, ranging from 58 to 68 days. This metric reflects the average number of days that RTX takes to pay its suppliers after receiving goods or services. A longer payment period may indicate better cash flow management, but it is essential to maintain good relations with suppliers by ensuring timely payments.

In summary, RTX Corp's activity ratios suggest that the company has been managing its inventory, receivables, and payables efficiently. However, continuous monitoring and optimization of these ratios are essential to enhance operational performance and overall financial health.

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	4.38	4.37	4.61	4.53	4.42	4.50	4.43	4.37	4.30	4.39	4.25	4.10	3.78	3.52	3.28	3.67	4.39	4.24	4.62	5.10
Total asset turnover	0.43	0.41	0.44	0.42	0.42	0.42	0.41	0.41	0.40	0.40	0.39	0.38	0.35	0.32	0.30	0.33	0.32	0.37	0.41	0.45

RTX Corp's long-term activity ratios, including fixed asset turnover and total asset turnover, provide insights into the company's efficiency in generating sales relative to its asset base.

Fixed asset turnover measures how efficiently the company is utilizing its fixed assets to generate revenue. RTX Corp's fixed asset turnover has been relatively stable over the past eight quarters, ranging between 4.37 and 4.61. This indicates that the company is effectively leveraging its fixed assets to generate sales, with each dollar of fixed assets generating between $4.37 and $4.61 of revenue during the respective quarters. The consistent high fixed asset turnover suggests that RTX Corp is efficiently utilizing its property, plant, and equipment to drive revenue growth.

Total asset turnover, on the other hand, measures the company's efficiency in generating sales relative to its total assets. RTX Corp's total asset turnover has also remained relatively stable over the quarters, ranging between 0.41 and 0.44. This indicates that the company is generating revenue of between $0.41 and $0.44 for each dollar of total assets during the respective quarters. The stable total asset turnover suggests that RTX Corp is effectively managing its total asset base to generate sales.

Overall, the consistent and relatively high fixed asset turnover and stable total asset turnover ratios indicate that RTX Corp is efficiently utilizing its assets to drive revenue growth and maintain operational efficiency in the long term. This could be viewed positively by investors and stakeholders as it reflects the company's ability to effectively generate sales with its asset base.