Analysis of Short-term (Operating) Activity Ratios
Activity ratios measure how efficiently a company performs day-to-day tasks, such us the collection of receivables and management of inventory.
Short-term Activity Ratios (Summary)
Linde plc, short-term (operating) activity ratios
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
| Short-term activity ratio | Description | The company |
|---|---|---|
| Inventory turnover | An activity ratio calculated as cost of goods sold divided by inventory. | Linde plc inventory turnover ratio deteriorated from 2021 to 2022 and from 2022 to 2023. |
| Receivables turnover | An activity ratio equal to revenue divided by receivables. | Linde plc receivables turnover ratio improved from 2021 to 2022 but then slightly deteriorated from 2022 to 2023 not reaching 2021 level. |
| Payables turnover | An activity ratio calculated as cost of goods sold divided by payables. | Linde plc payables turnover ratio increased from 2021 to 2022 but then slightly decreased from 2022 to 2023. |
| Short-term activity ratio | Description | The company |
|---|---|---|
| Average inventory processing period | An activity ratio equal to the number of days in the period divided by inventory turnover over the period. | Linde plc number of days of inventory outstanding deteriorated from 2021 to 2022 and from 2022 to 2023. |
| Average receivable collection period | An activity ratio equal to the number of days in the period divided by receivables turnover. | Linde plc number of days of receivables outstanding improved from 2021 to 2022 but then slightly deteriorated from 2022 to 2023 not reaching 2021 level. |
| Operating cycle | Equal to average inventory processing period plus average receivables collection period. | Linde plc operating cycle improved from 2021 to 2022 but then deteriorated significantly from 2022 to 2023. |
| Average payables payment period | An estimate of the average number of days it takes a company to pay its suppliers; equal to the number of days in the period divided by payables turnover ratio for the period. | Linde plc number of days of payables outstanding decreased from 2021 to 2022 but then slightly increased from 2022 to 2023. |
| Cash conversion cycle | A financial metric that measures the length of time required for a company to convert cash invested in its operations to cash received as a result of its operations; equal to average inventory processing period plus average receivables collection period minus average payables payment period. | Linde plc cash conversion cycle deteriorated from 2021 to 2022 and from 2022 to 2023. |
Inventory Turnover
Linde plc, inventory turnover calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Cost of sales, exclusive of depreciation and amortization | 17,492) | 19,450) | 17,543) | 15,383) | 16,644) | |
| Inventories | 2,115) | 1,978) | 1,733) | 1,729) | 1,697) | |
| Short-term Activity Ratio | ||||||
| Inventory turnover1 | 8.27 | 9.83 | 10.12 | 8.90 | 9.81 | |
| Benchmarks | ||||||
| Inventory Turnover, Competitors2 | ||||||
| Sherwin-Williams Co. | 5.28 | 4.88 | 5.92 | 5.37 | 5.22 | |
| Inventory Turnover, Sector | ||||||
| Chemicals | 6.70 | 7.01 | 7.91 | 7.09 | 7.39 | |
| Inventory Turnover, Industry | ||||||
| Materials | 4.33 | 4.84 | 5.27 | 4.94 | 5.17 | |
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
1 2023 Calculation
Inventory turnover = Cost of sales, exclusive of depreciation and amortization ÷ Inventories
= 17,492 ÷ 2,115 = 8.27
2 Click competitor name to see calculations.
| Short-term activity ratio | Description | The company |
|---|---|---|
| Inventory turnover | An activity ratio calculated as cost of goods sold divided by inventory. | Linde plc inventory turnover ratio deteriorated from 2021 to 2022 and from 2022 to 2023. |
Receivables Turnover
Linde plc, receivables turnover calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Sales | 32,854) | 33,364) | 30,793) | 27,243) | 28,228) | |
| Accounts receivable, net | 4,718) | 4,559) | 4,499) | 4,167) | 4,322) | |
| Short-term Activity Ratio | ||||||
| Receivables turnover1 | 6.96 | 7.32 | 6.84 | 6.54 | 6.53 | |
| Benchmarks | ||||||
| Receivables Turnover, Competitors2 | ||||||
| Sherwin-Williams Co. | 9.34 | 8.64 | 8.48 | 8.84 | 8.57 | |
| Receivables Turnover, Sector | ||||||
| Chemicals | 7.78 | 7.79 | 7.41 | 7.30 | 7.20 | |
| Receivables Turnover, Industry | ||||||
| Materials | 9.38 | 9.26 | 9.18 | 8.38 | 8.46 | |
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
1 2023 Calculation
Receivables turnover = Sales ÷ Accounts receivable, net
= 32,854 ÷ 4,718 = 6.96
2 Click competitor name to see calculations.
| Short-term activity ratio | Description | The company |
|---|---|---|
| Receivables turnover | An activity ratio equal to revenue divided by receivables. | Linde plc receivables turnover ratio improved from 2021 to 2022 but then slightly deteriorated from 2022 to 2023 not reaching 2021 level. |
Payables Turnover
Linde plc, payables turnover calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Cost of sales, exclusive of depreciation and amortization | 17,492) | 19,450) | 17,543) | 15,383) | 16,644) | |
| Accounts payable | 3,020) | 2,995) | 3,503) | 3,095) | 3,266) | |
| Short-term Activity Ratio | ||||||
| Payables turnover1 | 5.79 | 6.49 | 5.01 | 4.97 | 5.10 | |
| Benchmarks | ||||||
| Payables Turnover, Competitors2 | ||||||
| Sherwin-Williams Co. | 5.31 | 5.26 | 4.74 | 4.57 | 5.26 | |
| Payables Turnover, Sector | ||||||
| Chemicals | 5.58 | 5.94 | 4.90 | 4.81 | 5.16 | |
| Payables Turnover, Industry | ||||||
| Materials | 5.83 | 5.82 | 5.41 | 5.49 | 5.83 | |
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
1 2023 Calculation
Payables turnover = Cost of sales, exclusive of depreciation and amortization ÷ Accounts payable
= 17,492 ÷ 3,020 = 5.79
2 Click competitor name to see calculations.
| Short-term activity ratio | Description | The company |
|---|---|---|
| Payables turnover | An activity ratio calculated as cost of goods sold divided by payables. | Linde plc payables turnover ratio increased from 2021 to 2022 but then slightly decreased from 2022 to 2023. |
Working Capital Turnover
Linde plc, working capital turnover calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Current assets | 12,620) | 13,047) | 10,159) | 10,924) | 10,352) | |
| Less: Current liabilities | 15,717) | 16,479) | 13,643) | 13,740) | 12,160) | |
| Working capital | (3,097) | (3,432) | (3,484) | (2,816) | (1,808) | |
| Sales | 32,854) | 33,364) | 30,793) | 27,243) | 28,228) | |
| Short-term Activity Ratio | ||||||
| Working capital turnover1 | — | — | — | — | — | |
| Benchmarks | ||||||
| Working Capital Turnover, Competitors2 | ||||||
| Sherwin-Williams Co. | — | — | — | — | 163.03 | |
| Working Capital Turnover, Sector | ||||||
| Chemicals | — | — | — | — | — | |
| Working Capital Turnover, Industry | ||||||
| Materials | 19.50 | 13.54 | 15.37 | 19.50 | 20.12 | |
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
1 2023 Calculation
Working capital turnover = Sales ÷ Working capital
= 32,854 ÷ -3,097 = —
2 Click competitor name to see calculations.
Average Inventory Processing Period
Linde plc, average inventory processing period calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data | ||||||
| Inventory turnover | 8.27 | 9.83 | 10.12 | 8.90 | 9.81 | |
| Short-term Activity Ratio (no. days) | ||||||
| Average inventory processing period1 | 44 | 37 | 36 | 41 | 37 | |
| Benchmarks (no. days) | ||||||
| Average Inventory Processing Period, Competitors2 | ||||||
| Sherwin-Williams Co. | 69 | 75 | 62 | 68 | 70 | |
| Average Inventory Processing Period, Sector | ||||||
| Chemicals | 54 | 52 | 46 | 51 | 49 | |
| Average Inventory Processing Period, Industry | ||||||
| Materials | 84 | 75 | 69 | 74 | 71 | |
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
1 2023 Calculation
Average inventory processing period = 365 ÷ Inventory turnover
= 365 ÷ 8.27 = 44
2 Click competitor name to see calculations.
| Short-term activity ratio | Description | The company |
|---|---|---|
| Average inventory processing period | An activity ratio equal to the number of days in the period divided by inventory turnover over the period. | Linde plc number of days of inventory outstanding deteriorated from 2021 to 2022 and from 2022 to 2023. |
Average Receivable Collection Period
Linde plc, average receivable collection period calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data | ||||||
| Receivables turnover | 6.96 | 7.32 | 6.84 | 6.54 | 6.53 | |
| Short-term Activity Ratio (no. days) | ||||||
| Average receivable collection period1 | 52 | 50 | 53 | 56 | 56 | |
| Benchmarks (no. days) | ||||||
| Average Receivable Collection Period, Competitors2 | ||||||
| Sherwin-Williams Co. | 39 | 42 | 43 | 41 | 43 | |
| Average Receivable Collection Period, Sector | ||||||
| Chemicals | 47 | 47 | 49 | 50 | 51 | |
| Average Receivable Collection Period, Industry | ||||||
| Materials | 39 | 39 | 40 | 44 | 43 | |
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
1 2023 Calculation
Average receivable collection period = 365 ÷ Receivables turnover
= 365 ÷ 6.96 = 52
2 Click competitor name to see calculations.
| Short-term activity ratio | Description | The company |
|---|---|---|
| Average receivable collection period | An activity ratio equal to the number of days in the period divided by receivables turnover. | Linde plc number of days of receivables outstanding improved from 2021 to 2022 but then slightly deteriorated from 2022 to 2023 not reaching 2021 level. |
Operating Cycle
Linde plc, operating cycle calculation, comparison to benchmarks
No. days
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data | ||||||
| Average inventory processing period | 44 | 37 | 36 | 41 | 37 | |
| Average receivable collection period | 52 | 50 | 53 | 56 | 56 | |
| Short-term Activity Ratio | ||||||
| Operating cycle1 | 96 | 87 | 89 | 97 | 93 | |
| Benchmarks | ||||||
| Operating Cycle, Competitors2 | ||||||
| Sherwin-Williams Co. | 108 | 117 | 105 | 109 | 113 | |
| Operating Cycle, Sector | ||||||
| Chemicals | 101 | 99 | 95 | 101 | 100 | |
| Operating Cycle, Industry | ||||||
| Materials | 123 | 114 | 109 | 118 | 114 | |
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
1 2023 Calculation
Operating cycle = Average inventory processing period + Average receivable collection period
= 44 + 52 = 96
2 Click competitor name to see calculations.
| Short-term activity ratio | Description | The company |
|---|---|---|
| Operating cycle | Equal to average inventory processing period plus average receivables collection period. | Linde plc operating cycle improved from 2021 to 2022 but then deteriorated significantly from 2022 to 2023. |
Average Payables Payment Period
Linde plc, average payables payment period calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data | ||||||
| Payables turnover | 5.79 | 6.49 | 5.01 | 4.97 | 5.10 | |
| Short-term Activity Ratio (no. days) | ||||||
| Average payables payment period1 | 63 | 56 | 73 | 73 | 72 | |
| Benchmarks (no. days) | ||||||
| Average Payables Payment Period, Competitors2 | ||||||
| Sherwin-Williams Co. | 69 | 69 | 77 | 80 | 69 | |
| Average Payables Payment Period, Sector | ||||||
| Chemicals | 65 | 61 | 74 | 76 | 71 | |
| Average Payables Payment Period, Industry | ||||||
| Materials | 63 | 63 | 67 | 66 | 63 | |
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
1 2023 Calculation
Average payables payment period = 365 ÷ Payables turnover
= 365 ÷ 5.79 = 63
2 Click competitor name to see calculations.
| Short-term activity ratio | Description | The company |
|---|---|---|
| Average payables payment period | An estimate of the average number of days it takes a company to pay its suppliers; equal to the number of days in the period divided by payables turnover ratio for the period. | Linde plc number of days of payables outstanding decreased from 2021 to 2022 but then slightly increased from 2022 to 2023. |
Cash Conversion Cycle
Linde plc, cash conversion cycle calculation, comparison to benchmarks
No. days
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data | ||||||
| Average inventory processing period | 44 | 37 | 36 | 41 | 37 | |
| Average receivable collection period | 52 | 50 | 53 | 56 | 56 | |
| Average payables payment period | 63 | 56 | 73 | 73 | 72 | |
| Short-term Activity Ratio | ||||||
| Cash conversion cycle1 | 33 | 31 | 16 | 24 | 21 | |
| Benchmarks | ||||||
| Cash Conversion Cycle, Competitors2 | ||||||
| Sherwin-Williams Co. | 39 | 48 | 28 | 29 | 44 | |
| Cash Conversion Cycle, Sector | ||||||
| Chemicals | 36 | 38 | 21 | 25 | 29 | |
| Cash Conversion Cycle, Industry | ||||||
| Materials | 60 | 51 | 42 | 52 | 51 | |
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
1 2023 Calculation
Cash conversion cycle = Average inventory processing period + Average receivable collection period – Average payables payment period
= 44 + 52 – 63 = 33
2 Click competitor name to see calculations.
| Short-term activity ratio | Description | The company |
|---|---|---|
| Cash conversion cycle | A financial metric that measures the length of time required for a company to convert cash invested in its operations to cash received as a result of its operations; equal to average inventory processing period plus average receivables collection period minus average payables payment period. | Linde plc cash conversion cycle deteriorated from 2021 to 2022 and from 2022 to 2023. |