Stryker Corporation (SYK)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Inventory turnover | 1.71 | 1.54 | 1.72 | 1.85 | 1.52 |
| Receivables turnover | 5.67 | 5.44 | 5.18 | 5.66 | 5.31 |
| Payables turnover | 4.86 | 4.90 | 4.86 | 5.44 | 6.54 |
| Working capital turnover | 3.12 | 4.46 | 4.64 | 3.13 | 3.08 |
Inventory Turnover:
- Stryker Corporation's inventory turnover has shown fluctuation over the years, ranging from 1.52 in 2020 to 1.85 in 2021.
- The ratio decreased to 1.54 in 2023 but then slightly improved to 1.71 in 2024.
- This indicates that the company is managing its inventory more efficiently in recent years compared to earlier periods.
Receivables Turnover:
- The receivables turnover for Stryker Corporation has generally been stable and healthy, with values ranging from 5.18 to 5.67 between 2020 and 2024.
- This consistency suggests that the company is effective in collecting payments from customers, maintaining a strong credit control process.
Payables Turnover:
- Stryker Corporation's payables turnover has decreased from 6.54 in 2020 to 4.86 in 2024.
- This may indicate that the company is taking longer to pay its suppliers, potentially impacting its relationships with vendors.
Working Capital Turnover:
- The working capital turnover for Stryker Corporation has shown variability, peaking at 4.64 in 2022 and dropping to 3.12 in 2024.
- This may suggest that the company is utilizing its working capital less efficiently in recent years.
In general, Stryker Corporation should monitor its inventory, payables, and working capital turnover ratios closely to ensure optimal operational efficiency and financial health.
Average number of days
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 213.67 | 237.59 | 212.22 | 197.00 | 240.90 |
| Days of sales outstanding (DSO) | days | 64.41 | 67.04 | 70.53 | 64.47 | 68.70 |
| Number of days of payables | days | 75.15 | 74.42 | 75.06 | 67.11 | 55.85 |
Stryker Corporation's activity ratios exhibit certain trends over the years.
1. Days of Inventory on Hand (DOH):
- The company's DOH decreased from 240.90 days on December 31, 2020, to 197.00 days on December 31, 2021, indicating an improvement in inventory management efficiency.
- However, there was a slight increase in DOH to 212.22 days by December 31, 2022, followed by a further increase to 237.59 days by December 31, 2023, before reducing to 213.67 days by December 31, 2024. These fluctuations suggest some challenges in managing inventory levels efficiently over the years.
2. Days of Sales Outstanding (DSO):
- The DSO decreased from 68.70 days on December 31, 2020, to 64.47 days on December 31, 2021, indicating a positive trend in collecting receivables more promptly.
- However, there was a slight increase in DSO to 70.53 days by December 31, 2022, followed by a decrease to 67.04 days by December 31, 2023, and a further decline to 64.41 days by December 31, 2024. These fluctuations suggest the company implemented effective credit and collection policies to manage receivables efficiently.
3. Number of Days of Payables:
- The number of days of payables increased from 55.85 days on December 31, 2020, to 67.11 days on December 31, 2021, suggesting a potential delay in paying suppliers.
- There was a further increase in the days of payables to 75.06 days by December 31, 2022, followed by a slight decrease to 74.42 days by December 31, 2023, and a marginal increase to 75.15 days by December 31, 2024. These figures indicate the company may have extended its payment terms to manage cash flow or bargaining power with suppliers.
In summary, while Stryker Corporation has shown improvements in some areas of activity ratios such as DSO, it has faced challenges in managing inventory levels efficiently and potentially extending payment terms to suppliers over the analyzed years.
See also:
Long-term
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Fixed asset turnover | 6.55 | 6.38 | 6.21 | 6.04 | 5.21 |
| Total asset turnover | 0.53 | 0.51 | 0.50 | 0.49 | 0.42 |
Stryker Corporation's long-term activity ratios depict an improvement in efficiency over the years. The fixed asset turnover ratio has been on an upward trend, increasing from 5.21 in 2020 to 6.55 in 2024. This indicates that the company is generating more revenue relative to its investment in fixed assets, reflecting effective asset utilization.
Similarly, the total asset turnover ratio has also shown a positive trend, rising from 0.42 in 2020 to 0.53 in 2024. This signifies that Stryker is generating more sales in relation to its total assets, indicating enhanced efficiency in utilizing its resources to generate revenue.
Overall, the consistent improvement in both fixed asset turnover and total asset turnover ratios reflects Stryker Corporation's ability to efficiently utilize its assets to generate revenue over the long term.