Veralto Corporation (VLTO)

Short-term

Turnover ratios

Veralto Corporation's activity ratios reveal insights into how efficiently the company manages its inventory, receivables, payables, and working capital.

1. Inventory Turnover:
- The inventory turnover ratio indicates how many times during the period the company sold and replaced its inventory.
- Veralto Corporation's inventory turnover ratios for June 30, 2024 (11.98), September 30, 2024 (11.50), and December 31, 2024 (13.03) show that the company effectively sells and replenishes its inventory.
- The increasing trend in the inventory turnover ratio over the periods indicates improved efficiency in managing inventory levels and liquidity.

2. Receivables Turnover:
- The receivables turnover ratio reflects how many times on average the company collects its receivables during the period.
- Veralto Corporation's receivables turnover ratios for June 30, 2024 (6.16), September 30, 2024 (5.97), and December 31, 2024 (5.23) suggest that the company efficiently collects payments from its customers.
- The decreasing trend in the receivables turnover ratio over the periods may indicate changing customer payment behaviors or credit policy modifications.

3. Payables Turnover:
- The payables turnover ratio shows how quickly the company pays its suppliers during the period.
- Veralto Corporation's payables turnover ratios for June 30, 2024 (9.42), September 30, 2024 (8.84), and December 31, 2024 (9.50) demonstrate a consistent payment pattern to suppliers.
- The stable payables turnover ratio implies a reliable relationship with suppliers and effective management of payment terms.

4. Working Capital Turnover:
- The working capital turnover ratio measures how efficiently the company utilizes its working capital to generate revenue.
- Veralto Corporation's working capital turnover ratios for June 30, 2024 (4.33), September 30, 2024 (3.60), and December 31, 2024 (4.47) indicate the effectiveness of utilizing working capital in generating sales.
- The fluctuations in the working capital turnover ratio highlight changes in the company's operational efficiency and liquidity management strategies over the periods.

Overall, Veralto Corporation demonstrates solid efficiency in managing inventory, receivables, payables, and working capital based on its activity ratios, showcasing effective operational and financial management practices.

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Average number of days

The activity ratios of Veralto Corporation provide insights into its efficiency in managing its inventory, collecting receivables, and paying its suppliers.

1. Days of Inventory on Hand (DOH) measures how effectively the company manages its inventory by indicating the number of days it takes to sell its average inventory. Veralto Corporation had a DOH of 30.47 days on June 30, 2024, which slightly increased to 31.75 days on September 30, 2024, and then decreased to 28.00 days on December 31, 2024. A lower DOH indicates efficient inventory turnover.

2. Days of Sales Outstanding (DSO) evaluates the average number of days it takes for the company to collect its accounts receivable. Veralto Corporation had a DSO of 59.28 days on June 30, 2024, which increased to 61.15 days on September 30, 2024, and further increased to 69.84 days on December 31, 2024. A lower DSO reflects quicker collection of receivables.

3. Number of Days of Payables measures how long the company takes to pay its suppliers. Veralto Corporation had 38.77 days of payables on June 30, 2024, which increased to 41.29 days on September 30, 2024, and slightly decreased to 38.41 days on December 31, 2024. A higher number of days of payables may indicate a more favorable position for the company as it can hold onto its cash longer.

Overall, Veralto Corporation showed efficient inventory turnover, a slight increase in the collection period for receivables, and a relatively stable payment period to suppliers over the analyzed period in 2024.

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Long-term

The Fixed Asset Turnover ratio for Veralto Corporation has shown consistent improvement over the three periods analyzed, with values of 18.80, 19.19, and 19.05 for June 30, September 30, and December 31 of 2024 respectively. This indicates that the company is generating $19.05 in sales for every dollar invested in fixed assets by the end of the year.

On the other hand, the Total Asset Turnover ratio has remained relatively stable, with values of 0.84, 0.80, and 0.80 for the same periods. This suggests that Veralto is generating sales amounting to 80% of its total assets each period.

Overall, the improvement in Fixed Asset Turnover ratio indicates that Veralto is efficiently utilizing its fixed assets to generate sales, while the stable Total Asset Turnover ratio implies that the company's overall asset utilization has been consistent throughout the periods.