Sensata Technologies Holding NV (ST)

Short-term

Turnover ratios

Sensata Technologies Holding Plc's inventory turnover has been relatively stable over the past five years, ranging from 3.91 to 4.70. This indicates that the company is able to efficiently manage its inventory levels and convert them into sales.

The receivables turnover has also shown consistency, with values between 5.28 and 6.19. This suggests that Sensata is effective in collecting payments from its customers in a timely manner.

In terms of payables turnover, there has been some fluctuation from 5.10 to 6.01, indicating variations in the company's relationship with its suppliers and how quickly it settles its payables.

The working capital turnover has shown some volatility over the years, ranging from 1.71 to 3.17. This metric reflects how effectively the company is using its working capital to generate sales revenue. A higher turnover ratio indicates efficient use of working capital.

Overall, Sensata Technologies Holding Plc demonstrates reasonably good efficiency in managing its inventory, receivables, payables, and working capital, as indicated by the turnover ratios analyzed.

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Average number of days

Activity ratios such as Days of Inventory on Hand (DOH), Days of Sales Outstanding (DSO), and Number of Days of Payables provide insights into how efficiently Sensata Technologies Holding Plc manages its working capital and operations.

1. Days of Inventory on Hand (DOH): The company's DOH has increased steadily over the past five years, from 81.56 days in 2019 to 93.25 days in 2023. This indicates that Sensata is holding onto its inventory for a longer period, potentially tying up cash that could have been used elsewhere. The increasing trend suggests the need to monitor and potentially improve inventory management practices to avoid overstocking or obsolete inventory.

2. Days of Sales Outstanding (DSO): Sensata's DSO has fluctuated over the years, ranging from 59.01 days in 2019 to 67.25 days in 2022. In 2023, DSO decreased to 67.00 days. A higher DSO implies a longer collection period for accounts receivable, which may indicate inefficiencies in the company's credit policies or difficulties in collecting payments from customers. The recent decrease in DSO is a positive sign, as it shows improvement in the company's ability to collect receivables promptly.

3. Number of Days of Payables: Sensata's number of days of payables has varied over the past five years, with fluctuations between 60.68 days in 2019 and 71.54 days in 2022. In 2023, the number of days of payables decreased to 63.03 days. A lower number of days of payables indicates that the company is taking less time to pay its suppliers, which could potentially strain supplier relationships. The recent decrease in this ratio suggests the company may be managing its payables more effectively.

Overall, Sensata Technologies Holding Plc should continue monitoring and managing its activity ratios to ensure efficient working capital management and improve overall operational efficiency.

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Long-term

Sensata Technologies Holding Plc's long-term activity ratios show variations in efficiency in utilizing its fixed assets and total assets over the past five years. The fixed asset turnover ratio has generally been above 4, indicating that the company generates significant sales relative to its investment in fixed assets. This trend suggests that Sensata is effectively using its fixed assets to generate revenue.

On the other hand, the total asset turnover ratio has fluctuated between 0.39 and 0.53 over the same period, showing a lower overall efficiency in utilizing all assets to generate sales. This indicates that Sensata might not be as effective in generating revenue from all its assets compared to just its fixed assets.

In summary, while Sensata demonstrates strong efficiency in generating sales from its fixed assets, there is room for improvement in optimizing the utilization of its total assets to drive overall revenue generation.