Transdigm Group Incorporated (TDG)
Activity ratios
Short-term
Turnover ratios
| 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 | Dec 31, 2019 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Inventory turnover | 1.74 | 1.65 | 1.71 | 1.69 | 1.70 | 1.63 | 1.62 | 1.67 | 1.75 | 1.71 | 1.80 | 1.85 | 1.93 | 1.93 | 1.88 | 1.84 | 1.92 | 1.84 | 2.10 | 2.05 |
| Receivables turnover | 5.75 | 5.85 | 6.08 | 6.09 | 5.35 | 5.39 | — | 6.55 | 5.61 | — | — | — | 6.07 | — | — | — | — | — | — | — |
| Payables turnover | 10.11 | 9.69 | 9.90 | 10.02 | 8.99 | 8.92 | 8.47 | 8.86 | 8.35 | 9.11 | 9.42 | 10.62 | 10.07 | 11.50 | 10.92 | 11.98 | 11.27 | 10.73 | 10.36 | 10.00 |
| Working capital turnover | 2.15 | 1.46 | 1.21 | 1.25 | 1.28 | 1.32 | 1.20 | 1.25 | 1.29 | 1.05 | 0.95 | 0.87 | 0.89 | 0.92 | 0.94 | 0.86 | 0.95 | 1.07 | 1.68 | 1.72 |
Transdigm Group Incorporated's inventory turnover ratio has shown fluctuations over the periods, ranging from a low of 1.62 to a high of 2.10. The current ratio stands at 1.74, indicating that the company efficiently turns its inventory into sales. However, there has been some variability in the efficiency of managing inventory levels over time.
In terms of receivables turnover, there is inconsistency in the data, with figures ranging from 5.35 to 6.55. The latest figure stands at 5.75, implying that the company collects outstanding receivables approximately 5.75 times a year. A higher receivables turnover ratio suggests effective credit management and timely collections.
Regarding payables turnover, the company's performance has been relatively stable over time, with values ranging from 8.35 to 11.98. The payables turnover ratio indicates how quickly the company pays its suppliers. A higher ratio may suggest better liquidity management but could also lead to strained supplier relationships if payments are delayed excessively.
Lastly, the working capital turnover ratio has exhibited variability, ranging from 0.86 to 2.15. The current ratio of 2.15 suggests that, on average, the company generates revenue more than twice the value of its working capital. This ratio reflects the efficiency of utilizing working capital to generate sales.
Overall, analyzing these activity ratios provides insights into Transdigm Group's efficiency in managing inventory, receivables, payables, and working capital, highlighting areas of strength and potential improvement in its operational performance.
Average number of days
| 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 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 209.59 | 221.12 | 214.07 | 216.09 | 215.11 | 224.52 | 225.67 | 218.76 | 208.66 | 213.19 | 202.29 | 196.92 | 189.21 | 188.74 | 193.67 | 198.58 | 190.60 | 197.89 | 173.89 | 178.30 |
| Days of sales outstanding (DSO) | days | 63.48 | 62.38 | 60.02 | 59.90 | 68.18 | 67.76 | — | 55.74 | 65.01 | — | — | — | 60.16 | — | — | — | — | — | — | — |
| Number of days of payables | days | 36.09 | 37.68 | 36.88 | 36.44 | 40.60 | 40.90 | 43.10 | 41.20 | 43.71 | 40.05 | 38.76 | 34.36 | 36.24 | 31.74 | 33.42 | 30.47 | 32.39 | 34.01 | 35.23 | 36.51 |
Transdigm Group Incorporated's activity ratios provide insight into the efficiency of its operations.
1. Days of Inventory on Hand (DOH): This ratio measures how many days it takes for the company to sell its inventory. A decreasing trend in DOH over the analyzed period indicates improved efficiency in managing inventory levels. However, the recent increase in DOH from 2022 to 2024 suggests potential challenges in inventory management.
2. Days of Sales Outstanding (DSO): DSO reflects the average number of days it takes for the company to collect receivables. A lower DSO is favorable, indicating swift collection of sales. Transdigm Group's DSO has shown fluctuation, reflecting potential changes in the company's credit policies or the ability of customers to pay.
3. Number of Days of Payables: This ratio indicates how long it takes for the company to pay its suppliers. A higher number of days of payables suggests that the company is taking longer to settle its payables, which can positively affect cash flow. Transdigm Group's days of payables have generally decreased over the periods analyzed, indicating potential enhanced negotiation with suppliers or improved cash management.
Overall, a detailed analysis of Transdigm Group's activity ratios suggests areas for potential improvement in inventory management and collection efficiency while also highlighting effective payables management practices.
Long-term
| 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 | Dec 31, 2019 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Fixed asset turnover | 5.34 | 5.32 | 5.67 | 5.23 | 5.25 | 6.35 | 6.76 | 6.52 | 6.73 | 6.39 | 6.20 | 6.15 | 6.23 | 6.04 | 5.69 | 6.11 | 6.79 | 7.35 | 7.98 | 7.56 |
| Total asset turnover | 0.31 | 0.35 | 0.34 | 0.34 | 0.33 | 0.32 | 0.29 | 0.30 | 0.30 | 0.28 | 0.27 | 0.25 | 0.25 | 0.25 | 0.24 | 0.26 | 0.28 | 0.30 | 0.36 | 0.31 |
The long-term activity ratios of Transdigm Group Incorporated provide insights into the efficiency of the company in utilizing its assets.
1. Fixed asset turnover: This ratio indicates how efficiently the company generates revenue from its fixed assets. Transdigm's fixed asset turnover has been relatively stable over the periods analyzed, ranging between 5.23 and 7.98. A higher fixed asset turnover suggests that Transdigm is effectively using its fixed assets to generate sales, with values consistently above 5 indicating strong operational efficiency.
2. Total asset turnover: This ratio measures the company's ability to generate revenue relative to its total assets. Transdigm's total asset turnover has varied over time, but generally stayed within the range of 0.24 to 0.36. A lower total asset turnover indicates that the company may have a higher level of assets relative to its revenue generation, which could signal inefficiencies in asset utilization.
Overall, Transdigm Group Incorporated has shown consistent operational efficiency in utilizing its fixed assets to generate revenue, as reflected by the stable and relatively high fixed asset turnover ratios. However, the varying total asset turnover ratios suggest some fluctuations in the company's overall asset utilization efficiency over the periods analyzed.