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)
Ecolab Inc., short-term (operating) activity ratios
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
| Short-term activity ratio | Description | The company |
|---|---|---|
| Inventory turnover | An activity ratio calculated as cost of goods sold divided by inventory. | Ecolab Inc. inventory turnover ratio deteriorated from 2019 to 2020 and from 2020 to 2021. |
| Receivables turnover | An activity ratio equal to revenue divided by receivables. | Ecolab Inc. receivables turnover ratio deteriorated from 2019 to 2020 and from 2020 to 2021. |
| Payables turnover | An activity ratio calculated as cost of goods sold divided by payables. | Ecolab Inc. payables turnover ratio decreased from 2019 to 2020 and from 2020 to 2021. |
| Working capital turnover | An activity ratio calculated as revenue divided by working capital. | Ecolab Inc. working capital turnover ratio deteriorated from 2019 to 2020 but then improved from 2020 to 2021 not reaching 2019 level. |
| 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. | Ecolab Inc. number of days of inventory outstanding deteriorated from 2019 to 2020 and from 2020 to 2021. |
| Average receivable collection period | An activity ratio equal to the number of days in the period divided by receivables turnover. | Ecolab Inc. number of days of receivables outstanding deteriorated from 2019 to 2020 and from 2020 to 2021. |
| Operating cycle | Equal to average inventory processing period plus average receivables collection period. | Ecolab Inc. operating cycle deteriorated from 2019 to 2020 and from 2020 to 2021. |
| 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. | Ecolab Inc. number of days of payables outstanding increased from 2019 to 2020 and from 2020 to 2021. |
| 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. |
Inventory Turnover
Ecolab Inc., inventory turnover calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Cost of sales, including special charges | 7,615,800) | 6,905,800) | 8,723,400) | 8,625,900) | 7,405,100) | |
| Inventories | 1,491,800) | 1,285,200) | 1,505,600) | 1,546,400) | 1,445,900) | |
| Short-term Activity Ratio | ||||||
| Inventory turnover1 | 5.11 | 5.37 | 5.79 | 5.58 | 5.12 | |
| Benchmarks | ||||||
| Inventory Turnover, Competitors2 | ||||||
| Linde plc | 10.12 | 8.90 | 9.81 | — | — | |
| Inventory Turnover, Industry | ||||||
| Materials | 5.07 | 4.81 | 5.16 | — | — | |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
1 2021 Calculation
Inventory turnover = Cost of sales, including special charges ÷ Inventories
= 7,615,800 ÷ 1,491,800 = 5.11
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. | Ecolab Inc. inventory turnover ratio deteriorated from 2019 to 2020 and from 2020 to 2021. |
Receivables Turnover
Ecolab Inc., receivables turnover calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Net sales | 12,733,100) | 11,790,200) | 14,906,300) | 14,668,200) | 13,838,300) | |
| Accounts receivable, net | 2,478,400) | 2,273,800) | 2,796,500) | 2,662,500) | 2,574,100) | |
| Short-term Activity Ratio | ||||||
| Receivables turnover1 | 5.14 | 5.19 | 5.33 | 5.51 | 5.38 | |
| Benchmarks | ||||||
| Receivables Turnover, Competitors2 | ||||||
| Linde plc | 6.84 | 6.54 | 6.53 | — | — | |
| Receivables Turnover, Industry | ||||||
| Materials | 9.46 | 8.19 | 8.42 | — | — | |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
1 2021 Calculation
Receivables turnover = Net sales ÷ Accounts receivable, net
= 12,733,100 ÷ 2,478,400 = 5.14
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. | Ecolab Inc. receivables turnover ratio deteriorated from 2019 to 2020 and from 2020 to 2021. |
Payables Turnover
Ecolab Inc., payables turnover calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Cost of sales, including special charges | 7,615,800) | 6,905,800) | 8,723,400) | 8,625,900) | 7,405,100) | |
| Accounts payable | 1,384,200) | 1,160,600) | 1,284,300) | 1,255,600) | 1,177,100) | |
| Short-term Activity Ratio | ||||||
| Payables turnover1 | 5.50 | 5.95 | 6.79 | 6.87 | 6.29 | |
| Benchmarks | ||||||
| Payables Turnover, Competitors2 | ||||||
| Linde plc | 5.01 | 4.97 | 5.10 | — | — | |
| Payables Turnover, Industry | ||||||
| Materials | 5.70 | 5.92 | 6.05 | — | — | |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
1 2021 Calculation
Payables turnover = Cost of sales, including special charges ÷ Accounts payable
= 7,615,800 ÷ 1,384,200 = 5.50
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. | Ecolab Inc. payables turnover ratio decreased from 2019 to 2020 and from 2020 to 2021. |
Working Capital Turnover
Ecolab Inc., working capital turnover calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Current assets | 4,687,100) | 5,117,400) | 4,828,400) | 4,677,700) | 4,596,400) | |
| Less: Current liabilities | 3,553,200) | 2,932,200) | 3,630,600) | 3,685,600) | 3,431,800) | |
| Working capital | 1,133,900) | 2,185,200) | 1,197,800) | 992,100) | 1,164,600) | |
| Net sales | 12,733,100) | 11,790,200) | 14,906,300) | 14,668,200) | 13,838,300) | |
| Short-term Activity Ratio | ||||||
| Working capital turnover1 | 11.23 | 5.40 | 12.44 | 14.79 | 11.88 | |
| Benchmarks | ||||||
| Working Capital Turnover, Competitors2 | ||||||
| Linde plc | — | — | — | — | — | |
| Working Capital Turnover, Industry | ||||||
| Materials | 9.83 | 13.50 | 14.71 | — | — | |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
1 2021 Calculation
Working capital turnover = Net sales ÷ Working capital
= 12,733,100 ÷ 1,133,900 = 11.23
2 Click competitor name to see calculations.
| Short-term activity ratio | Description | The company |
|---|---|---|
| Working capital turnover | An activity ratio calculated as revenue divided by working capital. | Ecolab Inc. working capital turnover ratio deteriorated from 2019 to 2020 but then improved from 2020 to 2021 not reaching 2019 level. |
Average Inventory Processing Period
Ecolab Inc., average inventory processing period calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data | ||||||
| Inventory turnover | 5.11 | 5.37 | 5.79 | 5.58 | 5.12 | |
| Short-term Activity Ratio (no. days) | ||||||
| Average inventory processing period1 | 71 | 68 | 63 | 65 | 71 | |
| Benchmarks (no. days) | ||||||
| Average Inventory Processing Period, Competitors2 | ||||||
| Linde plc | 36 | 41 | 37 | — | — | |
| Average Inventory Processing Period, Industry | ||||||
| Materials | 72 | 76 | 71 | — | — | |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
1 2021 Calculation
Average inventory processing period = 365 ÷ Inventory turnover
= 365 ÷ 5.11 = 71
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. | Ecolab Inc. number of days of inventory outstanding deteriorated from 2019 to 2020 and from 2020 to 2021. |
Average Receivable Collection Period
Ecolab Inc., average receivable collection period calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data | ||||||
| Receivables turnover | 5.14 | 5.19 | 5.33 | 5.51 | 5.38 | |
| Short-term Activity Ratio (no. days) | ||||||
| Average receivable collection period1 | 71 | 70 | 68 | 66 | 68 | |
| Benchmarks (no. days) | ||||||
| Average Receivable Collection Period, Competitors2 | ||||||
| Linde plc | 53 | 56 | 56 | — | — | |
| Average Receivable Collection Period, Industry | ||||||
| Materials | 39 | 45 | 43 | — | — | |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
1 2021 Calculation
Average receivable collection period = 365 ÷ Receivables turnover
= 365 ÷ 5.14 = 71
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. | Ecolab Inc. number of days of receivables outstanding deteriorated from 2019 to 2020 and from 2020 to 2021. |
Operating Cycle
Ecolab Inc., operating cycle calculation, comparison to benchmarks
No. days
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data | ||||||
| Average inventory processing period | 71 | 68 | 63 | 65 | 71 | |
| Average receivable collection period | 71 | 70 | 68 | 66 | 68 | |
| Short-term Activity Ratio | ||||||
| Operating cycle1 | 142 | 138 | 131 | 131 | 139 | |
| Benchmarks | ||||||
| Operating Cycle, Competitors2 | ||||||
| Linde plc | 89 | 97 | 93 | — | — | |
| Operating Cycle, Industry | ||||||
| Materials | 111 | 121 | 114 | — | — | |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
1 2021 Calculation
Operating cycle = Average inventory processing period + Average receivable collection period
= 71 + 71 = 142
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. | Ecolab Inc. operating cycle deteriorated from 2019 to 2020 and from 2020 to 2021. |
Average Payables Payment Period
Ecolab Inc., average payables payment period calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data | ||||||
| Payables turnover | 5.50 | 5.95 | 6.79 | 6.87 | 6.29 | |
| Short-term Activity Ratio (no. days) | ||||||
| Average payables payment period1 | 66 | 61 | 54 | 53 | 58 | |
| Benchmarks (no. days) | ||||||
| Average Payables Payment Period, Competitors2 | ||||||
| Linde plc | 73 | 73 | 72 | — | — | |
| Average Payables Payment Period, Industry | ||||||
| Materials | 64 | 62 | 60 | — | — | |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
1 2021 Calculation
Average payables payment period = 365 ÷ Payables turnover
= 365 ÷ 5.50 = 66
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. | Ecolab Inc. number of days of payables outstanding increased from 2019 to 2020 and from 2020 to 2021. |
Cash Conversion Cycle
Ecolab Inc., cash conversion cycle calculation, comparison to benchmarks
No. days
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data | ||||||
| Average inventory processing period | 71 | 68 | 63 | 65 | 71 | |
| Average receivable collection period | 71 | 70 | 68 | 66 | 68 | |
| Average payables payment period | 66 | 61 | 54 | 53 | 58 | |
| Short-term Activity Ratio | ||||||
| Cash conversion cycle1 | 76 | 77 | 77 | 78 | 81 | |
| Benchmarks | ||||||
| Cash Conversion Cycle, Competitors2 | ||||||
| Linde plc | 16 | 24 | 21 | — | — | |
| Cash Conversion Cycle, Industry | ||||||
| Materials | 47 | 59 | 54 | — | — | |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
1 2021 Calculation
Cash conversion cycle = Average inventory processing period + Average receivable collection period – Average payables payment period
= 71 + 71 – 66 = 76
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. |