West Pharmaceutical Services Inc (WST)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Inventory turnover | 5.03 | 4.19 | 4.22 | 4.38 | 4.29 |
| Receivables turnover | — | — | — | — | — |
| Payables turnover | — | — | — | — | — |
| Working capital turnover | 2.93 | 2.33 | 2.06 | 2.47 | 2.47 |
Based on the provided data, let's analyze the activity ratios of West Pharmaceutical Services Inc:
1. Inventory Turnover:
- West Pharmaceutical Services Inc's inventory turnover has been relatively stable over the years, ranging from 4.19 to 5.03.
- A higher inventory turnover ratio indicates that the company is efficiently managing its inventory by selling goods quickly.
- The increasing trend seen from 2023 to 2024 suggests improvement in inventory management efficiency.
2. Receivables Turnover:
- Data shows that the receivables turnover ratio is not available for any of the years provided.
- This could imply that the company's accounts receivable turnover information may not be publicly disclosed or calculated in the dataset.
3. Payables Turnover:
- Similarly, the payables turnover ratio is not available for any of the years provided.
- This lack of data makes it challenging to assess how quickly the company pays its suppliers.
4. Working Capital Turnover:
- West Pharmaceutical Services Inc's working capital turnover has fluctuated from 2.06 to 2.93 during the period under review.
- A higher working capital turnover ratio indicates that the company efficiently utilizes its working capital to generate sales revenue.
- The increasing trend from 2022 to 2024 suggests better utilization of working capital in driving revenue growth.
In conclusion, while the company's inventory turnover and working capital turnover ratios show positive trends in efficiency, the lack of data for receivables turnover and payables turnover limits our ability to perform a comprehensive analysis of West Pharmaceutical Services Inc's complete activity ratios.
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 | 72.63 | 87.15 | 86.48 | 83.41 | 85.04 |
| Days of sales outstanding (DSO) | days | — | — | — | — | — |
| Number of days of payables | days | — | — | — | — | — |
The activity ratios provide insights into how efficiently West Pharmaceutical Services Inc manages its operations.
1. Days of Inventory on Hand (DOH):
- Over the five-year period, West Pharmaceutical Services Inc has seen fluctuations in its DOH, ranging from 72.63 days to 87.15 days.
- A decreasing trend in DOH indicates that the company is managing its inventory more efficiently, as it takes fewer days to turn inventory into sales. The decrease from 85.04 days in 2020 to 72.63 days in 2024 suggests an improvement in inventory management efficiency.
2. Days of Sales Outstanding (DSO):
- The data provided does not include information on Days of Sales Outstanding (DSO). DSO measures how long it takes for the company to collect revenue from sales. Without this data, it is challenging to assess the efficiency of the company in collecting cash from its customers.
3. Number of Days of Payables:
- Similarly, the information on the number of days of payables is not provided in the data. This ratio typically reflects how long the company takes to pay its suppliers or vendors. Without this data, it is difficult to evaluate the company's payment practices and its relationship with suppliers.
Overall, while the DOH shows some improvement in inventory management efficiency over the years, the absence of data on DSO and number of days of payables limits the comprehensive analysis of West Pharmaceutical Services Inc's activity ratios. It would be valuable to have complete information on all three ratios to get a holistic view of the company's operational efficiency.
Long-term
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Fixed asset turnover | — | — | 2.49 | 2.68 | 2.28 |
| Total asset turnover | 0.79 | 0.77 | 0.80 | 0.85 | 0.77 |
The fixed asset turnover ratio for West Pharmaceutical Services Inc has shown an improving trend over the past few years. In 2020, the ratio was 2.28, which increased to 2.68 in 2021 and then decreased slightly to 2.49 in 2022. However, there is missing data for 2023 and 2024. This ratio indicates that the company generated $2.68 in sales for every dollar invested in fixed assets in 2021.
On the other hand, the total asset turnover ratio, which reflects the efficiency of the company in generating sales from its total assets, shows a fluctuating trend. In 2020, the total asset turnover ratio was 0.77, which increased to 0.85 in 2021 before decreasing to 0.80 in 2022 and then further declining to 0.77 in 2023. The ratio slightly recovered to 0.79 in 2024. This implies that for every dollar of total assets, the company generated $0.85 in sales in 2021.
Overall, the trends in these long-term activity ratios suggest that West Pharmaceutical Services Inc has been effectively utilizing its fixed assets to generate sales, although the efficiency in utilizing total assets to generate revenue has been more variable over the years. The missing data for 2023 and 2024 limits a complete analysis of the long-term activity ratios for those years. It would be useful to monitor how these ratios evolve in the future to assess the company's asset utilization efficiency.