Vontier Corp (VNT)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | |
|---|---|---|---|---|---|---|---|---|---|
| Inventory turnover | 2.59 | 8.17 | 7.86 | 7.38 | 7.39 | 6.54 | 7.46 | 7.38 | 8.24 |
| Receivables turnover | 5.16 | 5.10 | 5.41 | 5.55 | 5.14 | 5.10 | — | — | 5.11 |
| Payables turnover | 2.10 | 7.30 | 7.31 | 6.93 | 5.94 | 5.97 | — | — | 5.56 |
| Working capital turnover | 8.22 | 7.30 | 7.40 | 6.92 | 6.89 | 6.62 | 6.16 | 7.30 | 5.37 |
The activity ratios of Vontier Corporation provide insights into the efficiency of the company's operations and management of its resources during the last eight quarters.
1. Inventory Turnover: Vontier's inventory turnover ratio has shown a relatively stable trend over the past quarters, ranging between 5.04 and 5.61. This indicates that the company is efficiently managing its inventory levels, with an average of approximately 5.29 times per year during the period under review.
2. Receivables Turnover: The receivables turnover for Vontier has varied between 6.07 and 6.98 times per year, with Q1 2022 reflecting the highest turnover. The consistent performance in collecting receivables suggests effective credit management and good relations with customers.
3. Payables Turnover: Vontier's payables turnover has generally increased over the previous quarters, with values ranging from 4.08 to 4.96. The higher turnover indicates that the company is paying its suppliers more frequently, which can sometimes be beneficial for maintaining good relationships with vendors.
4. Working Capital Turnover: The working capital turnover ratio has exhibited an upward trend, with values fluctuating between 6.22 and 8.21 times per year. This ratio reflects how efficiently Vontier generates revenue from its working capital, showing an improvement in utilizing its current assets and liabilities to support sales.
Overall, the analysis of Vontier Corporation's activity ratios indicates that the company has been effectively managing its inventory, receivables, payables, and working capital during the period in review. The stable or improving trends in these ratios suggest a strong operational performance and efficient resource utilization.
Average number of days
| Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 140.72 | 44.66 | 46.43 | 49.45 | 49.38 | 55.82 | 48.91 | 49.46 | 44.32 |
| Days of sales outstanding (DSO) | days | 70.78 | 71.54 | 67.52 | 65.79 | 71.06 | 71.52 | — | — | 71.40 |
| Number of days of payables | days | 174.03 | 50.03 | 49.92 | 52.68 | 61.49 | 61.14 | — | — | 65.61 |
Analyzing Vontier Corporation's activity ratios, we can observe trends and patterns over the past eight quarters.
Days of inventory on hand (DOH) have shown a slight fluctuation, ranging from 65.06 days to 72.48 days. A decrease in DOH typically indicates efficient inventory management, while an increase may suggest potential issues with inventory turnover.
Days of sales outstanding (DSO) have varied between 53.56 days and 60.17 days. A decrease in DSO reflects faster collection of receivables, which is positive for cash flow and liquidity. Conversely, an increase in DSO may indicate potential difficulties in collecting receivables.
The number of days of payables ranged from 73.62 days to 89.56 days. A longer payable period may indicate stronger bargaining power with suppliers, allowing for improved cash flow management. However, excessively long payment terms could strain supplier relationships.
Overall, it is important for Vontier Corporation to monitor these activity ratios consistently to ensure optimal management of inventory, receivables, and payables, which are key components of working capital management. Identifying and addressing any unfavorable trends can help maintain efficient operations and financial health.
Long-term
| Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | |
|---|---|---|---|---|---|---|---|---|---|
| Fixed asset turnover | 30.31 | 32.51 | 33.67 | 34.04 | 34.03 | 33.21 | 35.99 | 29.67 | 29.05 |
| Total asset turnover | 0.72 | 0.75 | 0.76 | 0.74 | 0.72 | 0.72 | 0.72 | 0.69 | 0.67 |
Vontier Corporation's long-term activity ratios provide insights into how efficiently the company is utilizing its assets to generate sales. The fixed asset turnover ratio, which measures how effectively the company is generating revenue from its fixed assets, has shown a fluctuating trend over the past few quarters. In Q4 2023, the fixed asset turnover was 30.26, indicating that the company generated $30.26 in sales for every dollar invested in fixed assets. This ratio has been relatively high in recent quarters, ranging from 30.13 to 36.32, suggesting that Vontier is efficiently utilizing its fixed assets to drive revenue.
On the other hand, the total asset turnover ratio, which assesses the company's ability to generate sales from all assets, also displays a fluctuating trend. In Q4 2023, the total asset turnover was 0.72, indicating that Vontier generated $0.72 in sales for every dollar of total assets. This ratio has varied between 0.70 and 0.76 in the past eight quarters. While the total asset turnover is lower compared to the fixed asset turnover, it still provides a comprehensive view of the company's overall asset utilization efficiency.
Overall, the analysis of Vontier Corporation's long-term activity ratios suggests an efficient utilization of both fixed and total assets to generate sales. However, it would be beneficial for the company to closely monitor these ratios to ensure consistent efficiency in asset utilization and revenue generation.