Standex International Corporation (SXI)

Short-term

Turnover ratios

Standex International Corporation's activity ratios provide insights into the efficiency of the company's operations in managing its inventory, receivables, payables, and working capital.

1. Inventory turnover: Standex has shown a consistent improvement in inventory turnover over the past five years, indicating that the company is effectively managing its inventory levels. The increasing trend suggests that Standex is selling its inventory more frequently, which is a positive sign for the company's liquidity and profitability.

2. Receivables turnover: The receivables turnover ratio has fluctuated over the years but has generally remained at a reasonable level. This ratio measures how effectively Standex is collecting its accounts receivable. A higher turnover indicates that the company is efficient in collecting payments from its customers, which is crucial for maintaining cash flows and working capital management.

3. Payables turnover: Standex has shown steady improvement in payables turnover, reflecting that the company is taking longer to pay its suppliers. While a higher payables turnover ratio can indicate efficient cash management and favorable credit terms, it may also suggest strained relationships with suppliers if excessively prolonged.

4. Working capital turnover: The working capital turnover ratio has shown some variation, with a notable decrease in the most recent year. This ratio measures how efficiently a company utilizes its working capital to generate sales. A higher turnover ratio implies better efficiency in using working capital. The recent decline in this ratio warrants further investigation to understand the reasons behind this decrease.

Overall, Standex International Corporation has generally exhibited efficiency in managing its inventory, receivables, and payables, as reflected in its activity ratios. However, monitoring these ratios over time and comparing them to industry benchmarks can provide valuable insight into the company's operational performance and potential areas for improvement.

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Average number of days

Standex International Corporation's activity ratios indicate how efficiently the company manages its inventory, collects receivables, and pays its suppliers.

1. Days of Inventory on Hand (DOH):
- Standex's DOH has shown a decreasing trend from 79.77 days in 2020 to 51.36 days in 2024, which suggests that the company has been able to manage its inventory more effectively over the years. A lower DOH is generally favorable as it signifies that Standex is selling its products quickly and not holding excess inventory.

2. Days of Sales Outstanding (DSO):
- The DSO for Standex has fluctuated over the years, with a peak of 70.34 days in 2021 and a decrease to 61.45 days in 2024. This indicates that the company has been improving its accounts receivable collection process, resulting in quicker cash inflows from sales. Lower DSO values reflect better credit management and efficient collections.

3. Number of Days of Payables:
- Standex's days of payables have decreased from 51.51 days in 2020 to 37.36 days in 2024, indicating that the company is taking longer to pay its suppliers. While a higher number of days of payables can sometimes signal liquidity issues or strained supplier relationships, it may also imply that Standex is utilizing its working capital effectively by extending payment periods.

Overall, the trends in Standex International Corporation's activity ratios suggest improvements in inventory management, collections, and payables practices, reflecting increased efficiency and potentially better cash flow management over the years.

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Long-term

Standex International Corporation's long-term activity ratios, as evidenced by the fixed asset turnover and total asset turnover, indicate the efficiency with which the company is utilizing its assets to generate sales.

Looking specifically at the fixed asset turnover, which measures the efficiency of the company in generating sales from its investment in fixed assets, we observe an increasing trend from 4.56 in 2020 to 5.34 in 2024. This indicates that Standex has been progressively more effective in utilizing its fixed assets to generate revenue over the years.

On the other hand, the total asset turnover ratio, which reflects how efficiently the company is using all of its assets to generate revenue, remained relatively stable between 0.65 in 2020 and 0.78 in 2022 and 2023, before decreasing slightly to 0.72 in 2024. Despite the recent decrease, the total asset turnover ratio suggests that Standex has been consistently efficient in generating sales based on its total asset base.

In conclusion, Standex International Corporation's long-term activity ratios suggest that the company is effectively utilizing both its fixed assets and total assets to drive revenue generation. The increasing trend in fixed asset turnover and the overall stable performance of the total asset turnover indicate a good level of efficiency in asset utilization over the specified period.