UFP Technologies Inc (UFPT)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Inventory turnover | 4.93 | 5.94 | 5.75 | 9.08 | 9.88 |
| Receivables turnover | 6.18 | 6.80 | 5.24 | 6.77 | 6.90 |
| Payables turnover | 15.51 | 15.92 | 18.11 | 41.05 | 39.45 |
| Working capital turnover | 4.61 | 6.21 | 4.25 | 3.15 | 5.42 |
The activity ratios of UFP Technologies Inc indicate the efficiency of the company in managing its assets and liabilities over the past five years.
1. Inventory turnover:
- The inventory turnover ratio has been gradually decreasing from 9.88 in 2019 to 4.93 in 2023. This suggests that the company is selling its inventory at a slower rate compared to previous years, which may indicate potential excess inventory or challenges in sales.
2. Receivables turnover:
- The receivables turnover ratio fluctuated over the five-year period, with a peak of 6.90 in 2019 and a low of 5.24 in 2021. This ratio indicates how efficiently the company collects payments from its customers. The lower ratio in 2021 may signify slower collection of receivables, which can impact cash flow.
3. Payables turnover:
- The payables turnover ratio has shown a declining trend over the years, indicating that the company is taking longer to pay its suppliers. A higher ratio such as in 2020 and 2021 suggests that the company is managing its payables more efficiently.
4. Working capital turnover:
- The working capital turnover ratio reflects how effectively the company is utilizing its working capital to generate sales. The ratio has varied over the years but generally increased from 2019 to 2022 before decreasing in 2023. A higher ratio indicates better utilization of working capital to generate revenue.
Overall, UFP Technologies Inc should closely monitor its activity ratios to ensure optimal management of inventory, receivables, payables, and working capital to maintain efficiency and effectiveness in its operations.
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 | 74.10 | 61.48 | 63.49 | 40.22 | 36.94 |
| Days of sales outstanding (DSO) | days | 59.09 | 53.66 | 69.70 | 53.94 | 52.89 |
| Number of days of payables | days | 23.53 | 22.92 | 20.15 | 8.89 | 9.25 |
The Days of Inventory on Hand (DOH) for UFP Technologies Inc have shown an increasing trend over the past five years, indicating that the company is holding inventory for longer periods before it is sold. This may suggest inefficiencies in managing inventory levels or potential shifts in demand patterns.
The Days of Sales Outstanding (DSO) have fluctuated over the years, but overall, they have remained relatively stable. A higher DSO may suggest that the company is taking longer to collect payments from customers, potentially impacting cash flow and liquidity.
The Number of Days of Payables indicates how long it takes for the company to pay its suppliers. UFP Technologies Inc has seen an increasing trend in this ratio, meaning that the company is taking longer to pay its bills. While this may help to improve cash flow in the short term, it could strain relationships with suppliers in the long run.
In summary, UFP Technologies Inc's activity ratios reflect areas that may require attention, including inventory management, accounts receivable collection, and accounts payable management. Monitoring and addressing these trends can help the company optimize working capital efficiency and maintain healthy liquidity levels.
Long-term
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Fixed asset turnover | 6.41 | 6.46 | 3.65 | 3.33 | 3.48 |
| Total asset turnover | 0.99 | 0.99 | 0.62 | 0.88 | 1.05 |
The long-term activity ratios of UFP Technologies Inc show the company's efficiency in utilizing its fixed assets and total assets to generate sales over the past five years.
The fixed asset turnover ratio has shown a consistent upward trend from 2019 to 2023, indicating that the company is generating an increasing amount of revenue per dollar invested in fixed assets. The ratio of 6.41 in 2023 implies that for every $1 of fixed assets, UFP Technologies Inc generated $6.41 in sales.
On the other hand, the total asset turnover ratio has fluctuated over the same period, with a significant increase in 2021 followed by a drop in 2022, before stabilizing in 2023. The ratio of less than 1 in recent years suggests that the company is not generating as much revenue relative to its total assets compared to previous years.
Overall, the fixed asset turnover ratio indicates that UFP Technologies Inc has been effectively using its fixed assets to drive sales growth, while the total asset turnover ratio highlights the need for the company to improve its efficiency in utilizing its total assets to generate revenue.