Silgan Holdings Inc (SLGN)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Inventory turnover | 5.78 | 7.68 | 6.50 | 6.62 | 5.97 |
| Receivables turnover | 9.70 | 9.55 | 7.83 | 7.77 | 8.89 |
| Payables turnover | 5.06 | 6.06 | 4.59 | 5.59 | 5.19 |
| Working capital turnover | 156.65 | 9.04 | 7.07 | 7.93 | 11.56 |
The inventory turnover ratio for Silgan Holdings Inc. has shown a decreasing trend from 2022 to 2023, indicating that the company is selling its inventory at a slower pace than in previous years. This may suggest potential issues with inventory management or slower demand for the company's products.
The receivables turnover ratio has been relatively consistent over the years, indicating that Silgan is efficient in collecting payments from its customers. A higher receivables turnover ratio is generally favorable as it shows that the company is able to collect its accounts receivable quickly.
The payables turnover ratio has fluctuated over the years, with a notable decrease from 2021 to 2022. A lower payables turnover ratio may suggest that the company is taking longer to pay its suppliers, which could impact relationships with vendors.
The working capital turnover ratio for Silgan has varied significantly, with a sharp increase in 2023. A high working capital turnover ratio indicates that the company is generating a significant amount of revenue relative to its working capital. However, such a drastic change in a single year warrants further investigation to understand the factors driving this change in efficiency.
Overall, these activity ratios provide insights into Silgan Holdings Inc.'s efficiency in managing its inventory, receivables, payables, and working capital. It is essential for the company to closely monitor these ratios and understand the underlying factors influencing them to optimize its operational performance and financial health.
Average number of days
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 63.11 | 47.54 | 56.11 | 55.15 | 61.19 |
| Days of sales outstanding (DSO) | days | 37.63 | 38.22 | 46.64 | 46.95 | 41.05 |
| Number of days of payables | days | 72.17 | 60.18 | 79.61 | 65.32 | 70.28 |
Silgan Holdings 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 DOH shows an increase from 52.36 days in 2022 to 68.74 days in 2023, indicating that inventory is held for a longer period before being sold.
- A higher DOH may suggest overstocking or slower inventory turnover, potentially tying up capital and increasing holding costs.
2. Days of Sales Outstanding (DSO):
- DSO decreased from 37.46 days in 2022 to 36.54 days in 2023, which suggests a slight improvement in collecting receivables.
- A lower DSO indicates better management of accounts receivable, implying that the company is able to collect sales revenues more quickly.
3. Number of Days of Payables:
- The days of payables increased from 66.28 days in 2022 to 78.61 days in 2023, indicating that the company is taking longer to pay its suppliers.
- A longer payment period can enhance cash flow management but may strain supplier relationships if excessively prolonged.
In summary, Silgan Holdings Inc. has seen varying trends in its activity ratios over the years. The company should focus on optimizing its inventory levels to ensure efficient utilization of resources, continuing the improvement in receivables collection, and managing payables effectively to maintain a healthy working capital cycle.
Long-term
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Fixed asset turnover | 2.96 | 3.25 | 2.79 | 2.62 | 2.86 |
| Total asset turnover | 0.76 | 0.86 | 0.72 | 0.74 | 0.91 |
The fixed asset turnover ratio for Silgan Holdings Inc. has been fluctuating over the past five years, ranging from 2.67 to 3.32. This ratio indicates that the company generates between $2.67 to $3.32 in sales for every dollar invested in fixed assets. The decreasing trend from 2019 to 2022 suggests that the company may have become more efficient in utilizing its fixed assets to generate revenue. However, the slight increase in 2023 indicates a potential improvement in fixed asset utilization.
In contrast, the total asset turnover ratio has also varied over the same period, with values between 0.73 and 0.91. This ratio reflects how efficiently the company utilizes all its assets to generate sales. The declining trend from 2019 to 2021 indicates a potential decrease in asset utilization efficiency, but the increase in 2022 and 2023 suggests an improvement in this aspect.
Overall, while Silgan Holdings Inc. has shown fluctuations in its fixed asset turnover and total asset turnover ratios over the years, the recent improvements in these ratios indicate a possible enhancement in the company's operational efficiency and ability to generate sales relative to its asset base.