Stanley Black & Decker Inc (SWK)
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 | 3.26 | 2.91 | 2.58 | 2.23 | 2.16 | 1.94 | 1.77 | 1.75 | 1.88 | 2.40 | 2.62 | 2.90 | 3.28 | 2.99 | 3.18 | 3.67 | 4.27 | 3.48 | 3.34 | 3.42 |
| Receivables turnover | 10.14 | 9.30 | 8.94 | — | 12.78 | — | — | — | 9.64 | — | — | — | — | — | — | — | — | — | — | — |
| Payables turnover | 6.72 | 6.42 | 5.64 | 5.30 | 5.40 | 4.93 | 3.74 | 3.27 | 2.98 | 3.25 | 3.21 | 3.43 | 3.73 | 3.67 | 4.13 | 4.58 | 4.62 | 4.62 | 4.11 | 4.22 |
| Working capital turnover | 13.92 | 9.34 | 9.53 | 8.66 | 12.06 | 14.15 | — | — | — | 11.81 | 13.02 | 7.21 | 8.84 | 8.16 | 10.84 | 42.99 | 283.74 | — | — | — |
Stanley Black & Decker Inc's inventory turnover ratio has displayed some fluctuation over the periods analyzed, ranging from a low of 1.75 to a high of 4.27. Generally, a rising trend in inventory turnover indicates efficient management of inventory levels. However, it is essential to note that inventory turnover is industry-specific, and a comparison with sector peers would provide a better context.
The receivables turnover ratio indicates how efficiently the company is collecting outstanding receivables. The data shows variability in this ratio, with values ranging from 8.94 to 12.78. A higher ratio signifies quicker collection of receivables, which can improve cash flow and overall liquidity.
Stanley Black & Decker Inc's payables turnover ratio has also shown fluctuations, varying from 2.98 to 6.72. A higher payables turnover ratio suggests that the company is paying its suppliers more quickly, which can positively impact relationships and potentially enable negotiation of better terms. However, excessively high ratios may indicate a risk of strained supplier relationships.
The working capital turnover ratio, which indicates how effectively the company is using its working capital to generate sales, has fluctuated significantly. The range of values from 7.21 to 283.74 highlights considerable variability in working capital efficiency. A higher ratio typically indicates better utilization of working capital, but it is crucial to analyze this ratio's trend over time to assess the company's overall financial health.
In summary, Stanley Black & Decker Inc's activity ratios demonstrate varying levels of efficiency in managing inventory, collecting receivables, paying suppliers, and utilizing working capital. Further analysis and comparison with industry benchmarks would provide a more comprehensive understanding of the company's performance in these areas.
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 | 112.00 | 125.54 | 141.66 | 163.72 | 168.94 | 188.58 | 206.17 | 208.00 | 194.15 | 151.93 | 139.54 | 125.74 | 111.32 | 121.90 | 114.92 | 99.53 | 85.41 | 104.77 | 109.34 | 106.61 |
| Days of sales outstanding (DSO) | days | 35.99 | 39.23 | 40.84 | — | 28.57 | — | — | — | 37.88 | — | — | — | — | — | — | — | — | — | — | — |
| Number of days of payables | days | 54.34 | 56.81 | 64.73 | 68.81 | 67.57 | 74.06 | 97.52 | 111.76 | 122.64 | 112.29 | 113.72 | 106.33 | 97.87 | 99.45 | 88.38 | 79.76 | 79.08 | 79.06 | 88.74 | 86.47 |
Based on the activity ratios for Stanley Black & Decker Inc, we can see trends and insights into the company's operational efficiency and liquidity management.
1. Days of Inventory on Hand (DOH):
- The trend in Days of Inventory on Hand (DOH) shows an increase from 106.61 days as of March 31, 2019, to 163.72 days as of March 31, 2023. This indicates a prolonged holding period for inventory, which may lead to higher storage costs and potential obsolescence risk.
2. Days of Sales Outstanding (DSO):
- The Days of Sales Outstanding (DSO) figure is only available for some periods, indicating that the company might not have consistent data on this metric. However, for the available data, we observe a fluctuating trend, with a decrease from 37.88 days as of December 31, 2021, to 28.57 days as of December 31, 2019. A lower DSO suggests faster collection of receivables, improving cash flow and liquidity.
3. Number of Days of Payables:
- The Number of Days of Payables shows the company's average payment period to suppliers. The trend reveals some variability over the periods, with an increase from 79.06 days as of March 31, 2019, to 122.64 days as of December 31, 2021. A longer payment period allows the company to better manage its cash flow but may strain supplier relationships if excessively prolonged.
Overall, the analysis of these activity ratios indicates potential areas for improvement in inventory management efficiency and working capital optimization by reducing inventory holding periods and managing payables effectively to maintain positive vendor relations. Additionally, collecting receivables more promptly can enhance cash flow and overall liquidity position.
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 | 7.27 | 7.28 | 7.21 | 7.12 | 7.20 | 7.35 | 7.19 | 6.77 | 6.54 | 7.46 | 7.36 | 6.95 | 6.62 | 6.37 | 6.38 | 6.81 | 7.37 | 7.51 | 7.43 | 7.45 |
| Total asset turnover | 0.67 | 0.67 | 0.65 | 0.66 | 0.68 | 0.66 | 0.57 | 0.55 | 0.54 | 0.63 | 0.63 | 0.59 | 0.55 | 0.55 | 0.56 | 0.61 | 0.70 | 0.67 | 0.67 | 0.67 |
The fixed asset turnover ratio measures how efficiently a company utilizes its fixed assets to generate revenue. Stanley Black & Decker Inc's fixed asset turnover has shown fluctuation over the periods, ranging from a high of 7.46 to a low of 6.37.
A high fixed asset turnover ratio indicates that the company is effectively using its fixed assets to generate sales. The company's ratio has generally been above 7, reflecting efficient utilization of its fixed assets.
On the other hand, total asset turnover measures how effectively a company uses all its assets to generate revenue. Stanley Black & Decker Inc's total asset turnover has ranged from 0.54 to 0.70 over the periods analyzed.
A lower total asset turnover ratio suggests that the company is not efficiently generating sales relative to its total assets. Stanley Black & Decker's ratio has shown variability, indicating fluctuations in its ability to generate revenue from its total asset base.
In conclusion, while Stanley Black & Decker Inc has demonstrated strong efficiency in utilizing its fixed assets to generate revenue based on the fixed asset turnover, the total asset turnover suggests some inconsistency in the overall efficiency of utilizing all assets for revenue generation. This analysis underscores the importance of closely monitoring both ratios to ensure optimal asset utilization and revenue generation.