Zebra Technologies Corporation (ZBRA)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Inventory turnover | 4.55 | 5.09 | 8.46 | 6.68 | 7.21 |
| Receivables turnover | 7.85 | 7.28 | 7.39 | 8.32 | 6.81 |
| Payables turnover | 8.02 | 5.40 | 5.93 | 5.68 | 6.19 |
| Working capital turnover | 61.92 | — | — | — | — |
Activity ratios provide insights into how efficiently a company is managing its assets and liabilities. Let's analyze the activity ratios of Zebra Technologies Corp. based on the data provided.
1. Inventory turnover:
- Zebra Technologies Corp.'s inventory turnover has shown a decreasing trend over the past five years, from 5.03 in 2019 to 3.06 in 2023. This indicates that the company is selling its inventory less frequently compared to previous years. A lower inventory turnover may suggest potential issues with sales or inventory management efficiency.
2. Receivables turnover:
- The receivables turnover ratio for Zebra Technologies Corp. has fluctuated over the years but generally remained within a stable range. A higher receivables turnover ratio indicates that the company is collecting its outstanding receivables more quickly. Zebra's receivables turnover has ranged between 6.95 and 8.49 over the past five years, suggesting efficient management of accounts receivable.
3. Payables turnover:
- Zebra Technologies Corp.'s payables turnover has fluctuated but generally remained steady over the years. The company has improved its payables turnover ratio from 4.32 in 2019 to 5.40 in 2023. A higher payables turnover ratio indicates that the company is paying its suppliers more quickly, which can be beneficial for maintaining good supplier relationships.
4. Working capital turnover:
- The working capital turnover ratio for Zebra Technologies Corp. is only available for 2023 at 61.95. This high ratio indicates that the company is generating significant revenue relative to its working capital. A high working capital turnover ratio is generally favorable as it suggests efficient utilization of working capital to generate sales.
In conclusion, while Zebra Technologies Corp. has shown mixed performance in its activity ratios, with some ratios showing improvements or stability, such as receivables and payables turnover, it is important for the company to address the declining trend in inventory turnover to enhance overall efficiency in managing its assets and liabilities.
Average number of days
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 80.27 | 71.70 | 43.15 | 54.66 | 50.62 |
| Days of sales outstanding (DSO) | days | 46.52 | 50.16 | 49.37 | 43.88 | 53.60 |
| Number of days of payables | days | 45.53 | 67.61 | 61.52 | 64.29 | 58.95 |
Zebra Technologies Corp.'s activity ratios provide insights into the efficiency of the company's management of inventory, receivables, and payables over the past five years.
1. Days of Inventory on Hand (DOH):
- The DOH has shown a fluctuating trend, increasing from 72.54 days in 2019 to 119.24 days in 2023. This indicates that on average, Zebra Technologies holds inventory for a longer period before selling it. A higher DOH could suggest inventory management challenges or a slowdown in sales.
2. Days of Sales Outstanding (DSO):
- The DSO has also varied over the years, with a peak of 52.49 days in 2019 and a low of 43.00 days in 2020. In 2023, the DSO was 46.50 days. A decreasing DSO indicates that the company is collecting receivables faster, which is a positive sign of effective credit management.
3. Number of Days of Payables:
- The number of days of payables has shown fluctuations as well, with a decreasing trend overall from 84.48 days in 2019 to 67.63 days in 2023. A lower number of days of payables suggests that the company is paying its vendors more quickly.
Overall, while Zebra Technologies Corp. has seen improvements in its management of receivables and payables, there are concerns regarding the increasing days of inventory on hand. Further analysis is needed to understand the reasons behind these trends and their impact on the company's overall operational efficiency.
Long-term
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Fixed asset turnover | 14.83 | 20.78 | 20.66 | 15.91 | 16.96 |
| Total asset turnover | 0.63 | 0.77 | 0.90 | 0.81 | 0.93 |
The fixed asset turnover ratio for Zebra Technologies Corp. has been consistently high over the past five years, indicating the company efficiently utilizes its fixed assets to generate sales. The declining trend in the fixed asset turnover from 2023 to 2020 suggests a slight decrease in the efficiency of generating sales from fixed assets during this period, while the ratio increased in 2023 compared to the previous year.
On the other hand, the total asset turnover ratio reflects how effectively the company utilizes all of its assets to generate revenue. Zebra Technologies Corp. experienced a declining trend in total asset turnover from 2019 to 2023, suggesting that the company's overall asset utilization to generate sales has decreased over time. This decline may indicate a need for the company to reevaluate its asset management efficiency to improve revenue generation in relation to total assets.
In summary, Zebra Technologies Corp. has shown strong performance in utilizing its fixed assets to generate sales, as indicated by the high fixed asset turnover ratios. However, there is a concerning trend of decreasing total asset turnover ratios over the past five years, implying a potential suboptimal utilization of the company's total assets in generating revenue.