Sensient Technologies Corporation (SXT)

Activity ratios

Short-term

Turnover ratios

Dec 31, 2024 Sep 30, 2024 Jun 30, 2024 Mar 31, 2024 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
Inventory turnover 2.28 2.37 2.45 2.33 2.18 2.16 2.15 1.77 1.37 1.07 0.64 0.72 0.73 0.79 0.85 0.80 0.75 0.53 0.54 0.56
Receivables turnover 5.34 5.02 4.69 4.84 5.26 5.03 4.76 4.59 4.71 4.93 4.73 4.83 5.24 5.16 5.19 5.16 5.63 5.84 5.63 5.44
Payables turnover 9.84 11.56 12.64 12.63 9.97 11.44 10.59 8.39 5.42 4.03 2.06 2.63 2.40 2.51 2.66 2.76 2.67 2.27 2.17 2.36
Working capital turnover 2.24 2.16 2.06 2.00 2.04 1.99 1.92 1.98 2.15 2.26 2.51 2.40 2.69 2.65 2.62 2.46 2.51 2.40 2.46 2.32

Based on the provided data, we can observe the following trends in Sensient Technologies Corporation's activity ratios:

1. Inventory Turnover: The company's inventory turnover ratio has shown an increasing trend from 0.56 in March 2020 to 2.28 in December 2024. This indicates that inventory is being sold more efficiently over time.

2. Receivables Turnover: The receivables turnover ratio has fluctuated over the years but generally remained within a stable range. It peaked at 5.34 in December 2024, indicating that the company is collecting receivables efficiently.

3. Payables Turnover: The payables turnover ratio initially fluctuated but then saw a significant increase from 2.06 in June 2022 to 12.64 in June 2024, before decreasing slightly to 9.84 in December 2024. This suggests that the company is managing its payables effectively.

4. Working Capital Turnover: The trend in the working capital turnover ratio has been mostly stable, ranging from 1.92 in June 2023 to 2.69 in December 2021. A higher ratio indicates that the company is utilizing its working capital more efficiently.

Overall, the activity ratios of Sensient Technologies Corporation demonstrate effective management of inventory, receivables, payables, and working capital over the years, indicating operational efficiency and effectiveness in managing its resources.

Average number of days

Dec 31, 2024 Sep 30, 2024 Jun 30, 2024 Mar 31, 2024 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
Days of inventory on hand (DOH) days 160.16 153.87 149.07 156.75 167.13 168.75 169.93 205.90 267.09 341.49 567.79 510.30 499.70 460.62 428.38 457.45 485.76 689.14 670.61 649.62
Days of sales outstanding (DSO) days 68.30 72.71 77.78 75.37 69.44 72.54 76.64 79.61 77.52 74.02 77.16 75.54 69.70 70.72 70.39 70.77 64.88 62.45 64.85 67.06
Number of days of payables days 37.10 31.59 28.88 28.90 36.62 31.90 34.46 43.53 67.41 90.52 176.78 138.62 152.37 145.50 137.14 132.19 136.71 160.65 167.88 154.62

Sensient Technologies Corporation's activity ratios provide insights into the efficiency of its operations.

1. Days of Inventory on Hand:
- Sensient's days of inventory on hand have shown a decreasing trend over the years, indicating better inventory management.
- The company went from holding inventory for 649.62 days on March 31, 2020, to only 160.16 days on December 31, 2024.
- The decrease in days of inventory on hand suggests that Sensient has been able to sell its products more quickly and efficiently.

2. Days of Sales Outstanding:
- Sensient's days of sales outstanding have fluctuated over the years but have generally remained within a reasonable range.
- The company took around 67.06 days to collect sales revenue on March 31, 2020, and reduced it to 68.30 days by December 31, 2024.
- The stability of this ratio indicates that Sensient has been effective in managing its accounts receivable and collecting payments from customers in a timely manner.

3. Number of Days of Payables:
- Sensient's number of days of payables has seen significant fluctuations, possibly due to changes in payment terms with suppliers.
- The company had payable days of 154.62 days on March 31, 2020, which decreased to 37.10 days by December 31, 2024.
- The drastic decrease in payable days reflects a more aggressive approach in managing payables and potentially taking advantage of discounts or negotiating better terms with suppliers.

Overall, the trends in Sensient's activity ratios suggest improvements in inventory management, stable accounts receivable collection, and significant changes in payable days, indicating a focus on optimizing cash flow and operational efficiency.

Long-term

Dec 31, 2024 Sep 30, 2024 Jun 30, 2024 Mar 31, 2024 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
Fixed asset turnover 3.15 3.07 3.02 2.90 2.83 2.83 2.84 2.90 2.94 3.22 3.16 3.06 3.06 3.11 3.03 3.00 2.96 3.03 3.05 3.09
Total asset turnover 0.77 0.74 0.74 0.72 0.71 0.71 0.70 0.71 0.72 0.77 0.78 0.76 0.78 0.79 0.79 0.77 0.76 0.76 0.77 0.77

Based on the provided data, we can analyze Sensient Technologies Corporation's long-term activity ratios, focusing on the fixed asset turnover and total asset turnover ratios.

1. Fixed Asset Turnover Ratio:
The fixed asset turnover ratio measures how efficiently the company generates sales from its investments in fixed assets. Sensient's fixed asset turnover ratio has fluctuated over the years, ranging from a low of 2.84 to a high of 3.22. The generally increasing trend from March 2020 to December 2022 indicates that the company was able to generate more revenue per dollar of fixed assets during this period. However, a slight decline in the ratio from December 2022 to December 2024 suggests a potential decrease in efficiency in utilizing fixed assets to generate sales.

2. Total Asset Turnover Ratio:
The total asset turnover ratio reflects the company's ability to generate sales from its total assets. Sensient's total asset turnover ratio has shown variability, with values ranging from 0.70 to 0.79. The ratio hovered around 0.77 in the earlier years but experienced a slight decline towards 0.72 by December 2022 before a gradual increase to 0.77 by December 2024. This indicates that the company has been effective in utilizing its total assets to generate sales, with a slight improvement in recent periods.

In conclusion, the analysis of Sensient Technologies Corporation's long-term activity ratios suggests that the company has shown mixed performance in efficiently utilizing both fixed assets and total assets to generate sales over the reported period. It would be important for the company to further evaluate and optimize its asset management strategies to maintain or improve these ratios for sustainable growth and profitability.