Textron Inc (TXT)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Inventory turnover | 0.29 | 0.28 | 0.32 | 0.30 | 3.07 |
| Receivables turnover | — | — | — | — | — |
| Payables turnover | — | — | — | — | — |
| Working capital turnover | — | 6.98 | 23.50 | 4.88 | 3.25 |
The inventory turnover ratio for Textron Inc has been fluctuating over the past five years, with a significant decrease in 2020 and 2021. This ratio indicates the number of times inventory is sold and replaced during a period. A low inventory turnover ratio could suggest inefficiency in managing inventory levels or potential overstocking.
The receivables turnover ratio and payables turnover ratio data are not provided, making it difficult to assess Textron Inc's efficiency in collecting receivables and paying its suppliers.
The working capital turnover ratio has shown a significant increase over the years, indicating an improvement in the company's ability to generate revenue relative to its working capital. This implies that Textron Inc has been able to generate more revenue using its working capital efficiently.
Overall, based on the available data, Textron Inc should further analyze its inventory management practices and aim to improve efficiency in inventory turnover. Additionally, monitoring and optimizing receivables and payables turnover ratios can provide further insights into the company's working capital management.
Average number of days
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 1,237.96 | 1,298.35 | 1,137.30 | 1,215.40 | 118.73 |
| Days of sales outstanding (DSO) | days | — | — | — | — | — |
| Number of days of payables | days | — | — | — | — | — |
Days of Inventory on Hand (DOH) for Textron Inc has been fluctuating over the past five years, ranging from a low of 118.73 days in 2019 to a high of 1,298.35 days in 2022. This indicates significant variability in the efficiency of managing inventory levels. The increasing trend in DOH up to 2022 suggests potential issues with inventory management that could lead to higher carrying costs and potential obsolescence.
Unfortunately, there is no data available for Days of Sales Outstanding (DSO) and Number of Days of Payables, which are essential metrics for analyzing the efficiency of receivables and payables management. Without this information, it is challenging to assess how quickly Textron is collecting from customers or paying its suppliers, which are critical factors in assessing liquidity and working capital efficiency.
Overall, the data provided reveals challenges in inventory management based on the fluctuating DOH ratios, but further details on DSO and Days of Payables are needed to provide a comprehensive analysis of Textron Inc's activity ratios.
Long-term
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Fixed asset turnover | 5.52 | 5.10 | 4.88 | 4.63 | 5.39 |
| Total asset turnover | 0.81 | 0.79 | 0.78 | 0.75 | 0.91 |
The long-term activity ratios for Textron Inc indicate its efficiency in utilizing its fixed assets and total assets to generate sales revenue over the years presented.
1. Fixed Asset Turnover:
- The fixed asset turnover ratio measures how effectively a company is utilizing its fixed assets to generate sales. A higher ratio indicates better efficiency in asset utilization.
- Textron Inc's fixed asset turnover improved consistently from 2019 to 2023, reaching 5.52 in 2023. This indicates that for every dollar invested in fixed assets, the company generated $5.52 in sales in 2023, reflecting an efficient use of its fixed assets to drive revenue growth.
2. Total Asset Turnover:
- The total asset turnover ratio reflects how efficiently a company is utilizing all its assets to generate sales revenue.
- Textron Inc's total asset turnover remained relatively stable over the years, fluctuating between 0.75 in 2020 and 0.91 in 2019 before declining to 0.81 in 2023.
- The decrease in total asset turnover from 0.91 in 2019 to 0.81 in 2023 may indicate a decrease in the company's ability to generate sales relative to its total assets. However, it is important to consider industry norms and specific business strategies when interpreting this ratio.
Overall, an analysis of Textron Inc's long-term activity ratios suggests a strong efficiency in utilizing fixed assets for revenue generation but a slight decline in the overall efficiency of asset utilization for generating sales revenue in recent years. Further examination of the company's operational strategies and industry dynamics would provide additional insights into these trends.