Visteon Corp (VC)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Inventory turnover | 11.63 | 9.74 | 9.61 | 13.01 | 15.51 |
| Receivables turnover | 4.00 | 4.48 | 3.96 | 3.85 | 4.38 |
| Payables turnover | 6.29 | 5.16 | 4.83 | 4.61 | 5.13 |
| Working capital turnover | 5.77 | 5.56 | 4.85 | 4.93 | 5.38 |
The activity ratios of Visteon Corp. provide insights into its efficiency in managing its working capital components.
1. Inventory turnover:
- Visteon Corp.'s inventory turnover has shown fluctuations over the past five years, ranging from 9.61 to 15.51. In 2023, the inventory turnover ratio improved to 11.63, indicating that the company's ability to sell inventory has increased compared to the previous year.
2. Receivables turnover:
- The receivables turnover ratio reflects the frequency with which the company collects its accounts receivable. Visteon Corp. experienced a steady increase in receivables turnover from 4.35 in 2021 to 5.37 in 2023, indicating enhanced efficiency in collecting outstanding payments.
3. Payables turnover:
- Visteon Corp.'s payables turnover ratio demonstrates the speed at which the company pays its suppliers. The payables turnover ratio has exhibited an upward trend, reaching 6.29 in 2023 from 4.83 in 2021. This suggests that the company is managing its payables more effectively.
4. Working capital turnover:
- The working capital turnover ratio measures how efficiently a company utilizes its working capital in generating sales revenue. Visteon Corp.'s working capital turnover ratio has been relatively stable, ranging between 4.85 and 5.77 over the past five years. A higher working capital turnover ratio indicates a more efficient use of working capital to generate sales.
Overall, Visteon Corp.'s activity ratios illustrate its ability to manage its inventory, receivables, payables, and working capital effectively, which is crucial for optimizing operational efficiency and financial performance.
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 | 31.37 | 37.49 | 37.96 | 28.05 | 23.53 |
| Days of sales outstanding (DSO) | days | 91.30 | 81.44 | 92.27 | 94.83 | 83.29 |
| Number of days of payables | days | 58.01 | 70.78 | 75.64 | 79.24 | 71.16 |
Activity ratios such as Days of Inventory on Hand (DOH), Days of Sales Outstanding (DSO), and Number of Days of Payables help assess how efficiently a company manages its inventory, collects receivables, and pays its suppliers, respectively.
1. Days of Inventory on Hand (DOH):
- The trend in Visteon Corp.'s DOH shows fluctuations over the past five years, ranging from a low of 23.53 days in 2019 to a high of 37.96 days in 2021.
- A decreasing DOH indicates the company is selling inventory quicker, potentially reducing carrying costs and the risk of obsolescence.
- In 2023, the DOH decreased to 31.37 days, indicating an improvement in inventory turnover compared to the previous year.
2. Days of Sales Outstanding (DSO):
- Visteon Corp.'s DSO has also varied over the years, with the highest DSO of 84.37 days observed in 2020 and the lowest of 67.94 days in 2023.
- A lower DSO implies that the company is collecting receivables more quickly, improving cash flow and reducing the risk of bad debts.
- The decrease in DSO from 75.41 days in 2022 to 67.94 days in 2023 suggests that Visteon Corp. is managing its accounts receivable more efficiently.
3. Number of Days of Payables:
- The number of days of payables for Visteon Corp. has shown variability, ranging from 71.16 days in 2019 to 79.24 days in 2020.
- A longer period of payables indicates that the company is taking longer to pay its suppliers, which can have implications for supplier relationships and cash flow.
- The decrease in the number of days of payables from 70.78 days in 2022 to 58.01 days in 2023 may signify that the company is managing its payables more effectively.
In conclusion, Visteon Corp. has shown improvements in inventory turnover, accounts receivable management, and payables management in 2023 based on the analysis of its activity ratios. The company appears to be working towards enhancing efficiency in its working capital management.
Long-term
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Fixed asset turnover | 9.46 | 10.32 | 7.15 | 5.84 | 6.75 |
| Total asset turnover | 1.45 | 1.53 | 1.24 | 1.12 | 1.30 |
The long-term activity ratios of Visteon Corp., as indicated by the fixed asset turnover and total asset turnover, provide insights into the efficiency of the company's utilization of its assets over the years.
1. Fixed Asset Turnover:
- The fixed asset turnover ratio measures how efficiently a company is generating sales revenue from its investments in fixed assets.
- Visteon Corp.'s fixed asset turnover has fluctuated over the past five years, ranging from 5.84 to 10.32.
- The increasing trend from 2019 to 2022 suggests that the company improved its ability to generate sales from its fixed assets effectively.
- However, the decrease in 2023 to 9.46 indicates a potential decline in the efficiency of utilizing fixed assets to generate sales compared to the previous year.
2. Total Asset Turnover:
- The total asset turnover ratio reflects the company's efficiency in generating sales revenue relative to its total assets.
- Visteon Corp.'s total asset turnover has varied from 1.12 to 1.53 over the past five years.
- The generally increasing trend in total asset turnover indicates an improvement in the company's overall efficiency in utilizing its assets to generate sales revenue.
- A higher total asset turnover ratio suggests that the company is generating more sales relative to its total asset base, indicating improved asset utilization efficiency.
Overall, the analysis of Visteon Corp.'s long-term activity ratios demonstrates fluctuations in the efficiency of utilizing fixed assets and total assets to generate sales revenue. The company saw improvements in asset turnover ratios in the earlier years, but a slight decrease in the most recent year may warrant further investigation into the factors influencing asset utilization efficiency.