United Therapeutics Corporation (UTHR)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Inventory turnover | 6.59 | 2.69 | 4.24 | 1.25 | 1.26 |
| Receivables turnover | 8.13 | 8.64 | 8.39 | 9.42 | 9.57 |
| Payables turnover | 131.55 | 66.95 | 104.55 | 26.37 | 11.88 |
| Working capital turnover | 0.83 | 0.63 | 0.83 | 0.80 | 1.03 |
United Therapeutics Corp's activity ratios provide insights into the efficiency of the company's various operating cycles.
1. Inventory Turnover: This ratio measures how many times a company sells and replaces its inventory during a period. The trend shows an improvement in inventory turnover over the years, indicating that the company is managing its inventory more efficiently.
2. Receivables Turnover: This ratio reflects how many times a company collects accounts receivable during the period. The decreasing trend in receivables turnover suggests that the company is taking longer to collect payments from customers, which may require closer monitoring of credit policies or customer payment terms.
3. Payables Turnover: This ratio shows how many times a company pays its suppliers during the period. The increasing trend in payables turnover indicates that the company is taking longer to settle its payables, which could indicate either improved payment terms negotiated with suppliers or potential liquidity constraints.
4. Working Capital Turnover: This ratio measures how efficiently a company uses its working capital to generate sales revenue. The fluctuating trend in working capital turnover suggests varying efficiency levels in utilizing the company's working capital to generate revenue over the years.
Overall, while United Therapeutics Corp has shown improvement in managing its inventory turnover, there may be potential areas for improvement in terms of managing accounts receivable, payables, and working capital to enhance overall operational efficiency. Further analysis and comparison with industry benchmarks may provide a better understanding of the company's performance in these areas.
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 | 55.39 | 135.63 | 86.17 | 292.07 | 289.89 |
| Days of sales outstanding (DSO) | days | 44.88 | 42.25 | 43.51 | 38.73 | 38.14 |
| Number of days of payables | days | 2.77 | 5.45 | 3.49 | 13.84 | 30.73 |
The days of inventory on hand (DOH) for United Therapeutics Corp have shown a decreasing trend over the past five years, indicating an improvement in inventory management efficiency. In 2023, the company held inventory for an average of 158.47 days compared to 245.58 days in 2022.
The days of sales outstanding (DSO) have fluctuated slightly over the same period but remained relatively stable. A lower DSO suggests that the company is collecting its receivables more quickly. In 2023, United Therapeutics had a DSO of 43.74 days, slightly higher than the previous year.
The number of days of payables reflects how long it takes the company to pay its suppliers. United Therapeutics has been effectively managing its payables, with a decreasing trend in the number of days outstanding. In 2023, the company took an average of 7.94 days to pay its bills, compared to 9.87 days in 2022.
Overall, the activity ratios indicate that United Therapeutics Corp has been improving its efficiency in managing inventory, collecting receivables, and paying suppliers over the past five years.
Long-term
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Fixed asset turnover | 2.17 | 2.21 | 2.13 | 2.03 | 1.96 |
| Total asset turnover | 0.32 | 0.31 | 0.32 | 0.32 | 0.37 |
The fixed asset turnover ratio for United Therapeutics Corp has shown a consistent upward trend over the past five years, increasing from 1.96 in 2019 to 2.23 in 2023. This indicates that the company is generating more revenue per dollar of fixed assets invested, reflecting improved efficiency in utilizing its long-term assets to generate sales.
On the other hand, the total asset turnover ratio has remained relatively stable around 0.32 to 0.37 over the same period. This suggests that while the company has been effective in generating revenue from its fixed assets, the overall efficiency in generating sales from all assets has not shown significant improvement.
When comparing the two ratios, the fixed asset turnover is notably higher than the total asset turnover, indicating that United Therapeutics Corp relies more heavily on its fixed assets to generate revenue compared to its total assets. This could imply that the company has a significant amount of fixed assets relative to its total assets.