Xylem Inc (XYL)

Short-term

Turnover ratios

Xylem Inc's activity ratios provide insights into the efficiency of the company's operations in managing its assets and liabilities.

1. Inventory Turnover:
Xylem Inc's inventory turnover ratio has shown some fluctuations over the quarters, ranging from 3.29 to 4.56. A higher inventory turnover indicates that the company is selling its inventory more effectively. The company's inventory turnover has generally been above 4, which suggests that Xylem is efficiently managing its inventory levels.

2. Receivables Turnover:
The receivables turnover ratio reflects how efficiently Xylem collects its accounts receivable. The ratio varied from 3.65 to 5.07. A higher turnover ratio indicates that the company is collecting its receivables more quickly. Xylem maintained a relatively stable receivables turnover above 4, suggesting effective management of credit policies and collections.

3. Payables Turnover:
Xylem's payables turnover ratio ranged from 3.89 to 5.40. A higher payables turnover suggests that the company is paying its suppliers more frequently. The fluctuations in this ratio indicate changes in the company's payment practices. Overall, Xylem has maintained a payables turnover above 4, implying a balanced approach between managing payables and maintaining strong supplier relationships.

4. Working Capital Turnover:
The working capital turnover ratio reflects how efficiently Xylem utilizes its working capital to generate sales. The ratio ranged from 3.76 to 4.41. A higher turnover ratio indicates that the company is using its working capital effectively to support its business operations. Xylem's working capital turnover has varied but generally remained above 4, indicating efficient utilization of working capital to generate revenue.

Overall, based on the activity ratios analyzed, Xylem Inc appears to be effectively managing its assets and liabilities to support its operational efficiency and financial performance.

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Average number of days

The activity ratios of Xylem Inc, as reflected by Days of Inventory on Hand (DOH), Days of Sales Outstanding (DSO), and Number of Days of Payables, provide insights into the efficiency of the company's operations and management of working capital.

1. Days of Inventory on Hand (DOH):
- Xylem Inc's DOH has shown some fluctuation over the past eight quarters, ranging from 79.96 days to 110.90 days.
- The decreasing trend from Q2 2023 to Q4 2023 indicates a more efficient management of inventory levels.
- However, the current DOH of 79.96 days still suggests that Xylem may be holding onto inventory for a relatively long time, tying up capital that could be used elsewhere.

2. Days of Sales Outstanding (DSO):
- The DSO for Xylem Inc has varied between 69.60 days and 99.99 days in the same period, displaying some volatility.
- The increasing trend in DSO from Q1 2023 to Q3 2023 may imply challenges in collecting receivables efficiently.
- The decrease in DSO in Q4 2023 is a positive sign as it indicates a quicker conversion of sales into cash.

3. Number of Days of Payables:
- Xylem's payables period has ranged from 67.64 days to 93.92 days over the past eight quarters.
- The increasing trend in payables days from Q1 2023 to Q3 2023 may suggest potential cash flow challenges or slower payment of obligations.
- However, the decrease in payables days in Q4 2023 indicates a potential improvement in managing payment terms with suppliers.

Overall, Xylem Inc should focus on maintaining an optimal balance between inventory levels, accounts receivable collection, and managing payables efficiently to enhance its working capital management and overall operational performance.

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Long-term

The fixed asset turnover ratio for Xylem Inc has been relatively high and consistent over the past eight quarters, ranging from 5.29 to 9.03. This indicates that the company generates significant revenue relative to its investment in fixed assets, showcasing efficient utilization of its long-term assets to generate sales.

In comparison, the total asset turnover ratio shows a lower level of efficiency in generating sales from all assets, with values ranging from 0.38 to 0.72. This suggests that Xylem Inc may have higher levels of non-operating or idle assets that are not contributing as effectively to revenue generation.

Overall, the fixed asset turnover ratio highlights Xylem Inc's ability to efficiently utilize its long-term assets to drive revenue, while the total asset turnover ratio indicates areas for improvement in optimizing the use of all assets to generate sales.