Watts Water Technologies Inc (WTS)
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 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Inventory turnover | 4.31 | 4.37 | 3.98 | 4.18 | 4.47 | 3.92 | 3.79 | 4.03 | 4.27 | 4.32 | 4.68 | 4.88 | 5.09 | 4.93 | 4.78 | 5.05 | 5.26 | 5.10 | 5.07 | 4.87 |
| Receivables turnover | 7.88 | 7.78 | 7.32 | 7.34 | 8.44 | 7.57 | 7.16 | 7.08 | 8.16 | 7.13 | 6.47 | 6.41 | 7.58 | 7.16 | 7.20 | 6.69 | 7.23 | 6.61 | 7.73 | 8.14 |
| Payables turnover | 13.06 | 13.92 | 10.98 | 11.08 | 12.51 | 12.58 | 9.85 | 10.34 | 11.05 | 10.04 | 9.44 | 9.62 | 12.19 | 13.47 | 13.12 | 11.99 | 11.52 | 13.77 | 12.44 | 12.83 |
| Working capital turnover | 3.13 | 3.03 | 3.21 | 3.21 | 3.45 | 3.48 | 3.50 | 3.60 | 3.98 | 3.89 | 3.71 | 3.56 | 3.78 | 3.70 | 3.87 | 3.85 | 5.04 | 4.97 | 5.83 | 4.80 |
Watts Water Technologies, Inc.'s activity ratios provide insights into the efficiency of its operations in managing inventory, receivables, payables, and working capital.
- Inventory turnover has shown a slight decline over the quarters, from 2.94 in Q4 2022 to 2.74 in Q4 2023. This indicates that the company is taking longer to sell its inventory, which may tie up resources and potentially lead to higher holding costs.
- Receivables turnover has been relatively consistent, ranging from 7.10 in Q1 2022 to 8.47 in Q4 2022. This suggests that the company efficiently collects payments from customers on credit sales, with a higher turnover indicating faster collection.
- Payables turnover has fluctuated over the quarters, with a peak of 8.97 in Q3 2023 and a low of 6.54 in Q2 2022. A higher turnover ratio indicates that the company is paying its suppliers more quickly, which may be beneficial for maintaining good relationships.
- Working capital turnover has been fairly stable, ranging from 3.04 in Q3 2023 to 3.61 in Q1 2022. This ratio indicates how efficiently the company is utilizing its working capital to generate sales, with a higher turnover suggesting better utilization of resources.
Overall, while the company's receivables turnover and working capital turnover seem to be relatively healthy, there may be opportunities to improve inventory management and payables turnover to enhance operational efficiency and optimize working capital 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 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 84.67 | 83.59 | 91.80 | 87.38 | 81.57 | 93.21 | 96.20 | 90.48 | 85.38 | 84.55 | 77.93 | 74.82 | 71.68 | 74.08 | 76.40 | 72.25 | 69.43 | 71.59 | 72.00 | 75.01 |
| Days of sales outstanding (DSO) | days | 46.29 | 46.91 | 49.85 | 49.71 | 43.26 | 48.22 | 50.96 | 51.53 | 44.72 | 51.20 | 56.43 | 56.93 | 48.15 | 51.01 | 50.71 | 54.54 | 50.47 | 55.22 | 47.25 | 44.84 |
| Number of days of payables | days | 27.95 | 26.22 | 33.25 | 32.95 | 29.17 | 29.03 | 37.06 | 35.28 | 33.03 | 36.34 | 38.68 | 37.95 | 29.94 | 27.10 | 27.82 | 30.44 | 31.70 | 26.51 | 29.33 | 28.46 |
Watts Water Technologies, Inc.'s activity ratios provide insights into the company's efficiency in managing its inventories, receivables, and payables.
1. Days of Inventory on Hand (DOH):
- The company's inventory turnover has been relatively stable with a range of 124.04 to 144.88 days over the past 8 quarters.
- Watts Water Technologies takes around 133 days, on average, to sell its inventory, indicating that the company may have slower inventory turnover compared to industry norms.
- A decreasing trend in DOH over time would suggest that the company is managing its inventory more efficiently.
2. Days of Sales Outstanding (DSO):
- DSO ranges from 43.11 to 51.38 days over the same period, reflecting the average number of days it takes for the company to collect revenue from its customers.
- The company's DSO has been relatively stable, indicating consistent collection practices.
- Watts Water Technologies collects its sales revenue in approximately 46 to 49 days, showcasing a moderate efficiency level in managing its accounts receivable.
3. Number of Days of Payables:
- The number of days of payables ranges from 40.70 to 55.81 days during the quarters analyzed.
- Watts Water Technologies takes around 44 to 53 days, on average, to pay its suppliers.
- A lower number of days of payables indicates that the company may be settling its payables more quickly, while a higher number may suggest a more extended payment period.
Overall, the analysis of activity ratios reveals that Watts Water Technologies, Inc. maintains moderate efficiency in managing its inventories, receivables, and payables. The company's stable DSO and DOH figures suggest a consistent approach to managing working capital, although there may be room for improvement in inventory turnover to enhance operational efficiency.
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 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Fixed asset turnover | 8.25 | 10.33 | 10.12 | 10.11 | 10.02 | 10.29 | 9.86 | 9.43 | 8.98 | 8.49 | 8.02 | 7.43 | 7.06 | 7.07 | 7.28 | 7.85 | 7.95 | 8.05 | 9.77 | 9.81 |
| Total asset turnover | 0.89 | 0.99 | 0.99 | 1.00 | 1.02 | 1.03 | 0.99 | 0.97 | 0.97 | 0.93 | 0.90 | 0.86 | 0.86 | 0.87 | 0.91 | 0.90 | 0.92 | 0.93 | 1.17 | 1.16 |
Watts Water Technologies, Inc. experienced fluctuations in its long-term activity ratios over the past eight quarters. The fixed asset turnover ratio decreased gradually from Q4 2022 to Q1 2023 before slightly increasing in Q2 and Q3 2023, but it was still lower than the levels seen in Q4 2022. This indicates that the company was less efficient in generating sales revenue from its fixed assets during Q1 and Q2 2023 compared to previous quarters.
In contrast, the total asset turnover ratio fluctuated within a narrower range across the same period. It peaked in Q4 2022 before gradually declining in Q1 and Q2 2023, then showed a slight increase in Q3 2023. This suggests that the company made more efficient use of its total assets to generate sales revenue at the end of 2022, with some fluctuations in efficiency observed in the subsequent quarters.
Overall, the variability in the fixed asset turnover ratio indicates potential challenges in maximizing the revenue generated from the company's fixed assets, while the more stable total asset turnover ratio suggests relatively consistent performance in utilizing total assets to drive sales. Further analysis and comparison with industry benchmarks could provide more insights into the company's operational efficiency and asset utilization.