Zurn Elkay Water Solutions Corporation (ZWS)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Mar 31, 2020 | |
|---|---|---|---|---|---|
| Inventory turnover | 4.83 | 3.18 | 2.23 | 2.91 | 5.50 |
| Receivables turnover | 7.06 | 6.74 | 5.39 | 5.14 | 6.18 |
| Payables turnover | 18.38 | 15.65 | 6.98 | 5.12 | 9.41 |
| Working capital turnover | 3.30 | 3.42 | 2.74 | 3.89 | 2.56 |
Zurn Elkay Water Solutions Corporation's inventory turnover has fluctuated over the years, with a peak of 5.50 in March 31, 2020, decreasing to 2.23 by December 31, 2022, and then recovering to 4.83 by December 31, 2024. This indicates that the company is managing its inventory more efficiently in recent years compared to the initial period.
The receivables turnover ratio shows a consistent improvement from 6.18 in March 31, 2020, to 7.06 by December 31, 2024. This suggests that the company is collecting its receivables at a faster rate, which is a positive sign for its liquidity and cash flow management.
In terms of payables turnover, there is a significant increase from 9.41 in March 31, 2020, to 18.38 by December 31, 2024. This indicates that the company is taking longer to pay its suppliers, which could be beneficial for cash flow management, but may also indicate potential strain on supplier relationships.
The working capital turnover ratio has shown some fluctuations but has generally improved over the years, from 2.56 in March 31, 2020, to 3.30 by December 31, 2024. This indicates that the company is generating more revenue relative to its working capital, which is a positive indicator of operational efficiency.
Overall, Zurn Elkay Water Solutions Corporation's activity ratios reflect varying levels of efficiency in managing its inventory, receivables, payables, and working capital over the years, with some areas showing improvements while others may require closer monitoring to ensure optimal performance.
Average number of days
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Mar 31, 2020 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 75.49 | 114.83 | 163.97 | 125.24 | 66.38 |
| Days of sales outstanding (DSO) | days | 51.73 | 54.18 | 67.77 | 71.00 | 59.07 |
| Number of days of payables | days | 19.86 | 23.33 | 52.27 | 71.34 | 38.81 |
Zurn Elkay Water Solutions Corporation's activity ratios show trends in how efficiently the company manages its inventory, collects receivables, and pays its suppliers.
1. Days of Inventory on Hand (DOH):
- The DOH ratio indicates how many days, on average, the company holds onto its inventory before selling it.
- Zurn Elkay's DOH increased from 66.38 days on March 31, 2020, to 163.97 days on December 31, 2022, before decreasing to 75.49 days on December 31, 2024.
- The significant increase in DOH in 2022 suggests that the company may have been facing issues with managing its inventory efficiently.
- The decrease in DOH in 2024 indicates an improvement in inventory management, as the company was able to reduce the number of days inventory is held.
2. Days of Sales Outstanding (DSO):
- DSO reflects the average number of days it takes for Zurn Elkay to collect its accounts receivable.
- The DSO decreased from 59.07 days on March 31, 2020, to 51.73 days on December 31, 2024, indicating a reduction in the average time taken to collect receivables.
- A decreasing trend in DSO is generally positive as it shows the company is collecting payments more quickly, improving cash flow.
3. Number of Days of Payables:
- This ratio represents the number of days Zurn Elkay takes to pay its suppliers.
- The days of payables decreased from 38.81 days on March 31, 2020, to 19.86 days on December 31, 2024.
- A decrease in days of payables indicates that the company is paying its suppliers more quickly, which could impact cash flow and relationships with suppliers.
Overall, Zurn Elkay's activity ratios suggest improvements in managing inventory and receivables efficiently, resulting in better cash flow management. However, a significant decrease in days of payables may require monitoring to ensure it does not strain the company's liquidity position or supplier relationships.
Long-term
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Mar 31, 2020 | |
|---|---|---|---|---|---|
| Fixed asset turnover | 10.79 | 9.60 | 7.00 | 14.14 | 5.46 |
| Total asset turnover | 0.59 | 0.57 | 0.45 | 0.85 | 0.57 |
Zurn Elkay Water Solutions Corporation's Fixed Asset Turnover ratio experienced fluctuations over the years, ranging from a low of 5.46 in March 2020 to a peak of 14.14 in December 2021. This indicates that the company generated $5.46 to $14.14 in revenue for every dollar invested in fixed assets during the respective periods.
In terms of Total Asset Turnover, the company's performance also varied, with a low of 0.45 in December 2022 to a high of 0.85 in December 2021. This ratio signifies the company's ability to generate revenue for every dollar of assets held. Despite the fluctuations, the ratios generally show that Zurn Elkay Water Solutions effectively utilized its assets to generate sales, although there were some periods of lower efficiency.
Overall, the company's long-term activity ratios indicate fluctuations in asset utilization efficiency over the years, demonstrating the importance of monitoring the company's asset management strategies to maintain and improve its operational performance.