United Therapeutics Corporation (UTHR)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Inventory turnover | 1.96 | 2.30 | 1.44 | 1.31 | 1.25 |
| Receivables turnover | — | — | — | — | — |
| Payables turnover | — | — | — | — | — |
| Working capital turnover | 0.92 | 0.85 | 0.64 | 0.84 | 0.80 |
United Therapeutics Corporation's activity ratios provide insight into how effectively the company manages its assets and liabilities to generate revenue.
1. Inventory Turnover:
- The inventory turnover ratio measures how efficiently the company is managing its inventory.
- United Therapeutics' inventory turnover has improved over the years from 1.25 in 2020 to 1.96 in 2024.
- A higher turnover ratio indicates that the company is selling its inventory more quickly, which is generally seen as positive.
2. Receivables Turnover:
- The data provided does not include information on the receivables turnover ratio for United Therapeutics.
- This ratio measures how effectively the company is collecting payments from its customers.
- A higher receivables turnover ratio is typically preferred as it signifies faster collection of accounts receivable.
3. Payables Turnover:
- The data does not provide information on the payables turnover ratio for United Therapeutics.
- Payables turnover ratio helps in assessing how quickly the company is paying its suppliers.
- Typically, a higher payables turnover ratio suggests that the company is managing its payables efficiently.
4. Working Capital Turnover:
- The working capital turnover ratio evaluates how efficiently the company utilizes its working capital to generate sales.
- United Therapeutics' working capital turnover has fluctuated over the years from 0.64 in 2022 to 0.92 in 2024.
- A higher turnover ratio indicates that the company is effectively utilizing its working capital to support operations and generate revenue.
Overall, United Therapeutics Corporation's activity ratios suggest improvements in inventory turnover and working capital turnover, indicating effective management of assets to drive sales. However, the lack of data on receivables and payables turnover limits a comprehensive assessment of the company's overall efficiency in managing its working capital cycle.
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 | 186.09 | 158.47 | 253.78 | 279.49 | 292.07 |
| Days of sales outstanding (DSO) | days | — | — | — | — | — |
| Number of days of payables | days | — | — | — | — | — |
The activity ratios of United Therapeutics Corporation over the years indicate various trends in the management of its inventory, accounts receivable, and accounts payable.
1. Days of Inventory on Hand (DOH):
- The DOH measures how many days, on average, the company holds inventory before selling it.
- United Therapeutics Corporation managed to reduce its DOH from 292.07 days in 2020 to 186.09 days in 2024.
- A declining trend in DOH implies improved inventory management efficiency, as the company is selling inventory faster or holding less inventory over time.
2. Days of Sales Outstanding (DSO):
- DSO measures the average number of days it takes for the company to collect payment from its customers after a sale.
- The data provided indicates that DSO was not available for any year, which suggests that specific information relating to accounts receivable turnover is not provided.
3. Number of Days of Payables:
- This ratio reflects the average number of days it takes for the company to pay its suppliers for purchases.
- Similar to DSO, the information on the number of days of payables was not available for any year, indicating a lack of visibility into the company's payment practices.
In conclusion, United Therapeutics Corporation has shown improvement in managing its inventory by reducing the number of days inventory is held before being sold. However, the lack of data on DSO and number of days of payables limits a comprehensive analysis of the company's overall efficiency in managing accounts receivables and payables.
Long-term
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Fixed asset turnover | — | — | 2.25 | 2.16 | 2.03 |
| Total asset turnover | 0.39 | 0.32 | 0.32 | 0.33 | 0.32 |
The Fixed Asset Turnover ratio for United Therapeutics Corporation has been gradually increasing from 2.03 in 2020 to 2.25 in 2022, indicating that the company is generating more sales relative to its investment in fixed assets. However, there is missing data for 2023 and 2024.
On the other hand, the Total Asset Turnover ratio has shown some fluctuations, with a slight increase from 0.32 in 2020 to 0.33 in 2021, followed by a decline to 0.32 in 2022, and then a significant increase to 0.39 in 2024. This indicates that the company is utilizing its total assets more efficiently to generate sales, especially in 2024.
Overall, the trend in the Fixed Asset Turnover ratio suggests improving efficiency in utilizing fixed assets, while the fluctuations in the Total Asset Turnover ratio may be attributed to changes in the company's overall asset base and revenue generation strategies.