Watts Water Technologies Inc (WTS)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Inventory turnover | 3.04 | 2.74 | 2.94 | 2.81 | 3.35 |
| Receivables turnover | — | — | — | — | — |
| Payables turnover | — | — | — | — | — |
| Working capital turnover | 3.38 | 3.14 | 3.46 | 3.99 | 3.80 |
Based on the provided data for Watts Water Technologies Inc, let's analyze the activity ratios:
1. Inventory Turnover: The inventory turnover ratio indicates how efficiently the company manages its inventory. The trend shows a slight fluctuation over the years, ranging from 2.74 to 3.35, with the highest turnover in 2020. This suggests that the company is selling through its inventory at different rates each year.
2. Receivables Turnover: Unfortunately, there are no values provided for the receivables turnover ratio for any of the years. This ratio could have provided insights into how quickly the company collects its receivables from customers.
3. Payables Turnover: Similarly, there is no data available for the payables turnover ratio. This ratio would have shown how efficiently the company is paying its suppliers.
4. Working Capital Turnover: The working capital turnover ratio measures how efficiently the company is using its working capital to generate sales. The trend indicates a slight variation from 3.14 to 3.99, with the highest turnover in 2021. This implies that the company has been effectively utilizing its working capital to generate revenue, although there was a dip in efficiency in 2023.
In conclusion, the analysis of these activity ratios provides some insights into the efficiency of inventory management and working capital utilization at Watts Water Technologies Inc. However, the lack of data for receivables and payables turnover ratios limits a comprehensive assessment of the company's overall activity and liquidity management.
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 | 120.25 | 133.05 | 124.04 | 129.84 | 108.94 |
| Days of sales outstanding (DSO) | days | — | — | — | — | — |
| Number of days of payables | days | — | — | — | — | — |
Watts Water Technologies Inc's activity ratios provide insight into how efficiently the company manages its operations.
1. Days of Inventory on Hand (DOH): The trend in Watts Water Technologies Inc's DOH indicates an increase in the number of days it takes to sell its inventory from 108.94 days in 2020 to 120.25 days in 2024. This suggests a slightly slower inventory turnover over the years, which may indicate issues with inventory management or potential overstocking.
2. Days of Sales Outstanding (DSO): The data provided does not include information on DSO for Watts Water Technologies Inc. DSO measures the average number of days it takes for a company to collect revenue after a sale, indicating how efficiently the company collects its accounts receivable. Without this information, it is challenging to assess the company's effectiveness in managing its receivables.
3. Number of Days of Payables: Similarly, the data does not include information on the number of days of payables for Watts Water Technologies Inc. This ratio would typically provide insights into how long the company takes to pay off its suppliers or trade payables, impacting cash flow management and supplier relationships.
In conclusion, while the information on inventory turnover is indicative of potential inventory management issues, the lack of data on DSO and payables limits a comprehensive assessment of Watts Water Technologies Inc's overall efficiency in managing its working capital cycle.
Long-term
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Fixed asset turnover | — | — | 10.06 | 9.01 | 7.11 |
| Total asset turnover | 0.94 | 0.89 | 1.03 | 0.97 | 0.87 |
The long-term activity ratios for Watts Water Technologies Inc show a positive trend over the years based on the fixed asset turnover and total asset turnover ratios.
Starting with the fixed asset turnover ratio, it has consistently improved from 7.11 in 2020 to 10.06 in 2022. This indicates that the company generated $10.06 in sales for every dollar invested in fixed assets in 2022, reflecting increased efficiency in utilizing its fixed assets to generate revenue.
Similarly, the total asset turnover ratio has also shown improvement, rising from 0.87 in 2020 to 0.94 in 2024. This suggests that the company has become more effective in generating sales relative to its total assets over the years.
Overall, the increasing trend in both fixed asset turnover and total asset turnover ratios indicates that Watts Water Technologies Inc has been successful in utilizing its assets more efficiently to drive sales and potentially improve profitability.