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)
Emerson Electric Co., short-term (operating) activity ratios
Based on: 10-K (reporting date: 2019-09-30), 10-K (reporting date: 2018-09-30), 10-K (reporting date: 2017-09-30), 10-K (reporting date: 2016-09-30), 10-K (reporting date: 2015-09-30), 10-K (reporting date: 2014-09-30).
| Short-term activity ratio | Description | The company |
|---|---|---|
| Inventory turnover | An activity ratio calculated as cost of goods sold divided by inventory. | Emerson Electric Co. inventory turnover ratio improved from 2017 to 2018 and from 2018 to 2019. |
| Receivables turnover | An activity ratio equal to revenue divided by receivables. | Emerson Electric Co. receivables turnover ratio improved from 2017 to 2018 and from 2018 to 2019. |
| Payables turnover | An activity ratio calculated as cost of goods sold divided by payables. | Emerson Electric Co. payables turnover ratio increased from 2017 to 2018 and from 2018 to 2019. |
| Working capital turnover | An activity ratio calculated as revenue divided by working capital. | Emerson Electric Co. working capital turnover ratio improved from 2017 to 2018 but then slightly deteriorated from 2018 to 2019 not reaching 2017 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. | Emerson Electric Co. number of days of inventory outstanding improved from 2017 to 2018 and from 2018 to 2019. |
| Average receivable collection period | An activity ratio equal to the number of days in the period divided by receivables turnover. | Emerson Electric Co. number of days of receivables outstanding improved from 2017 to 2018 and from 2018 to 2019. |
| Operating cycle | Equal to average inventory processing period plus average receivables collection period. | Emerson Electric Co. operating cycle improved from 2017 to 2018 and from 2018 to 2019. |
| 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. | Emerson Electric Co. number of days of payables outstanding decreased from 2017 to 2018 and from 2018 to 2019. |
| 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. | Emerson Electric Co. cash conversion cycle improved from 2017 to 2018 and from 2018 to 2019. |
Inventory Turnover
Emerson Electric Co., inventory turnover calculation, comparison to benchmarks
| Sep 30, 2019 | Sep 30, 2018 | Sep 30, 2017 | Sep 30, 2016 | Sep 30, 2015 | Sep 30, 2014 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Cost of sales | 10,557) | 9,948) | 8,860) | 8,260) | 13,256) | 14,379) | |
| Inventories | 1,880) | 1,813) | 1,696) | 1,208) | 1,847) | 2,057) | |
| Short-term Activity Ratio | |||||||
| Inventory turnover1 | 5.62 | 5.49 | 5.22 | 6.84 | 7.18 | 6.99 | |
| Benchmarks | |||||||
| Inventory Turnover, Competitors2 | |||||||
| Boeing Co. | 0.94 | — | — | — | — | — | |
| Caterpillar Inc. | 3.25 | — | — | — | — | — | |
| Eaton Corp. plc | 5.11 | — | — | — | — | — | |
| GE Aerospace | 4.74 | — | — | — | — | — | |
| Honeywell International Inc. | 5.51 | — | — | — | — | — | |
| Lockheed Martin Corp. | 14.22 | — | — | — | — | — | |
| RTX Corp. | 5.21 | — | — | — | — | — | |
| Inventory Turnover, Sector | |||||||
| Capital Goods | 2.61 | — | — | — | — | — | |
| Inventory Turnover, Industry | |||||||
| Industrials | 3.94 | — | — | — | — | — | |
Based on: 10-K (reporting date: 2019-09-30), 10-K (reporting date: 2018-09-30), 10-K (reporting date: 2017-09-30), 10-K (reporting date: 2016-09-30), 10-K (reporting date: 2015-09-30), 10-K (reporting date: 2014-09-30).
1 2019 Calculation
Inventory turnover = Cost of sales ÷ Inventories
= 10,557 ÷ 1,880 = 5.62
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. | Emerson Electric Co. inventory turnover ratio improved from 2017 to 2018 and from 2018 to 2019. |
Receivables Turnover
Emerson Electric Co., receivables turnover calculation, comparison to benchmarks
| Sep 30, 2019 | Sep 30, 2018 | Sep 30, 2017 | Sep 30, 2016 | Sep 30, 2015 | Sep 30, 2014 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Net sales | 18,372) | 17,408) | 15,264) | 14,522) | 22,304) | 24,537) | |
| Receivables, less allowances | 2,985) | 3,344) | 3,072) | 2,701) | 4,319) | 5,019) | |
| Short-term Activity Ratio | |||||||
| Receivables turnover1 | 6.15 | 5.21 | 4.97 | 5.38 | 5.16 | 4.89 | |
| Benchmarks | |||||||
| Receivables Turnover, Competitors2 | |||||||
| Boeing Co. | 23.44 | — | — | — | — | — | |
| Caterpillar Inc. | 5.92 | — | — | — | — | — | |
| Eaton Corp. plc | 6.22 | — | — | — | — | — | |
| GE Aerospace | 5.22 | — | — | — | — | — | |
| Honeywell International Inc. | 4.90 | — | — | — | — | — | |
| Lockheed Martin Corp. | 25.59 | — | — | — | — | — | |
| RTX Corp. | 5.70 | — | — | — | — | — | |
| Receivables Turnover, Sector | |||||||
| Capital Goods | 7.40 | — | — | — | — | — | |
| Receivables Turnover, Industry | |||||||
| Industrials | 7.67 | — | — | — | — | — | |
Based on: 10-K (reporting date: 2019-09-30), 10-K (reporting date: 2018-09-30), 10-K (reporting date: 2017-09-30), 10-K (reporting date: 2016-09-30), 10-K (reporting date: 2015-09-30), 10-K (reporting date: 2014-09-30).
1 2019 Calculation
Receivables turnover = Net sales ÷ Receivables, less allowances
= 18,372 ÷ 2,985 = 6.15
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. | Emerson Electric Co. receivables turnover ratio improved from 2017 to 2018 and from 2018 to 2019. |
Payables Turnover
Emerson Electric Co., payables turnover calculation, comparison to benchmarks
| Sep 30, 2019 | Sep 30, 2018 | Sep 30, 2017 | Sep 30, 2016 | Sep 30, 2015 | Sep 30, 2014 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Cost of sales | 10,557) | 9,948) | 8,860) | 8,260) | 13,256) | 14,379) | |
| Accounts payable | 1,874) | 1,943) | 1,776) | 1,517) | 2,358) | 2,951) | |
| Short-term Activity Ratio | |||||||
| Payables turnover1 | 5.63 | 5.12 | 4.99 | 5.44 | 5.62 | 4.87 | |
| Benchmarks | |||||||
| Payables Turnover, Competitors2 | |||||||
| Boeing Co. | 4.63 | — | — | — | — | — | |
| Caterpillar Inc. | 6.15 | — | — | — | — | — | |
| Eaton Corp. plc | 6.78 | — | — | — | — | — | |
| GE Aerospace | 4.20 | — | — | — | — | — | |
| Honeywell International Inc. | 4.25 | — | — | — | — | — | |
| Lockheed Martin Corp. | 40.16 | — | — | — | — | — | |
| RTX Corp. | 5.28 | — | — | — | — | — | |
| Payables Turnover, Sector | |||||||
| Capital Goods | 5.63 | — | — | — | — | — | |
| Payables Turnover, Industry | |||||||
| Industrials | 7.40 | — | — | — | — | — | |
Based on: 10-K (reporting date: 2019-09-30), 10-K (reporting date: 2018-09-30), 10-K (reporting date: 2017-09-30), 10-K (reporting date: 2016-09-30), 10-K (reporting date: 2015-09-30), 10-K (reporting date: 2014-09-30).
1 2019 Calculation
Payables turnover = Cost of sales ÷ Accounts payable
= 10,557 ÷ 1,874 = 5.63
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. | Emerson Electric Co. payables turnover ratio increased from 2017 to 2018 and from 2018 to 2019. |
Working Capital Turnover
Emerson Electric Co., working capital turnover calculation, comparison to benchmarks
| Sep 30, 2019 | Sep 30, 2018 | Sep 30, 2017 | Sep 30, 2016 | Sep 30, 2015 | Sep 30, 2014 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Current assets | 7,139) | 6,619) | 8,252) | 9,960) | 10,049) | 10,867) | |
| Less: Current liabilities | 5,976) | 6,164) | 5,045) | 8,008) | 7,800) | 8,454) | |
| Working capital | 1,163) | 455) | 3,207) | 1,952) | 2,249) | 2,413) | |
| Net sales | 18,372) | 17,408) | 15,264) | 14,522) | 22,304) | 24,537) | |
| Short-term Activity Ratio | |||||||
| Working capital turnover1 | 15.80 | 38.26 | 4.76 | 7.44 | 9.92 | 10.17 | |
| Benchmarks | |||||||
| Working Capital Turnover, Competitors2 | |||||||
| Boeing Co. | 15.57 | — | — | — | — | — | |
| Caterpillar Inc. | 4.04 | — | — | — | — | — | |
| Eaton Corp. plc | 5.95 | — | — | — | — | — | |
| GE Aerospace | 7.03 | — | — | — | — | — | |
| Honeywell International Inc. | 5.92 | — | — | — | — | — | |
| Lockheed Martin Corp. | 19.15 | — | — | — | — | — | |
| RTX Corp. | 26.47 | — | — | — | — | — | |
| Working Capital Turnover, Sector | |||||||
| Capital Goods | 8.95 | — | — | — | — | — | |
| Working Capital Turnover, Industry | |||||||
| Industrials | 10.00 | — | — | — | — | — | |
Based on: 10-K (reporting date: 2019-09-30), 10-K (reporting date: 2018-09-30), 10-K (reporting date: 2017-09-30), 10-K (reporting date: 2016-09-30), 10-K (reporting date: 2015-09-30), 10-K (reporting date: 2014-09-30).
1 2019 Calculation
Working capital turnover = Net sales ÷ Working capital
= 18,372 ÷ 1,163 = 15.80
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. | Emerson Electric Co. working capital turnover ratio improved from 2017 to 2018 but then slightly deteriorated from 2018 to 2019 not reaching 2017 level. |
Average Inventory Processing Period
Emerson Electric Co., average inventory processing period calculation, comparison to benchmarks
| Sep 30, 2019 | Sep 30, 2018 | Sep 30, 2017 | Sep 30, 2016 | Sep 30, 2015 | Sep 30, 2014 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data | |||||||
| Inventory turnover | 5.62 | 5.49 | 5.22 | 6.84 | 7.18 | 6.99 | |
| Short-term Activity Ratio (no. days) | |||||||
| Average inventory processing period1 | 65 | 67 | 70 | 53 | 51 | 52 | |
| Benchmarks (no. days) | |||||||
| Average Inventory Processing Period, Competitors2 | |||||||
| Boeing Co. | 388 | — | — | — | — | — | |
| Caterpillar Inc. | 112 | — | — | — | — | — | |
| Eaton Corp. plc | 71 | — | — | — | — | — | |
| GE Aerospace | 77 | — | — | — | — | — | |
| Honeywell International Inc. | 66 | — | — | — | — | — | |
| Lockheed Martin Corp. | 26 | — | — | — | — | — | |
| RTX Corp. | 70 | — | — | — | — | — | |
| Average Inventory Processing Period, Sector | |||||||
| Capital Goods | 140 | — | — | — | — | — | |
| Average Inventory Processing Period, Industry | |||||||
| Industrials | 93 | — | — | — | — | — | |
Based on: 10-K (reporting date: 2019-09-30), 10-K (reporting date: 2018-09-30), 10-K (reporting date: 2017-09-30), 10-K (reporting date: 2016-09-30), 10-K (reporting date: 2015-09-30), 10-K (reporting date: 2014-09-30).
1 2019 Calculation
Average inventory processing period = 365 ÷ Inventory turnover
= 365 ÷ 5.62 = 65
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. | Emerson Electric Co. number of days of inventory outstanding improved from 2017 to 2018 and from 2018 to 2019. |
Average Receivable Collection Period
Emerson Electric Co., average receivable collection period calculation, comparison to benchmarks
| Sep 30, 2019 | Sep 30, 2018 | Sep 30, 2017 | Sep 30, 2016 | Sep 30, 2015 | Sep 30, 2014 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data | |||||||
| Receivables turnover | 6.15 | 5.21 | 4.97 | 5.38 | 5.16 | 4.89 | |
| Short-term Activity Ratio (no. days) | |||||||
| Average receivable collection period1 | 59 | 70 | 73 | 68 | 71 | 75 | |
| Benchmarks (no. days) | |||||||
| Average Receivable Collection Period, Competitors2 | |||||||
| Boeing Co. | 16 | — | — | — | — | — | |
| Caterpillar Inc. | 62 | — | — | — | — | — | |
| Eaton Corp. plc | 59 | — | — | — | — | — | |
| GE Aerospace | 70 | — | — | — | — | — | |
| Honeywell International Inc. | 75 | — | — | — | — | — | |
| Lockheed Martin Corp. | 14 | — | — | — | — | — | |
| RTX Corp. | 64 | — | — | — | — | — | |
| Average Receivable Collection Period, Sector | |||||||
| Capital Goods | 49 | — | — | — | — | — | |
| Average Receivable Collection Period, Industry | |||||||
| Industrials | 48 | — | — | — | — | — | |
Based on: 10-K (reporting date: 2019-09-30), 10-K (reporting date: 2018-09-30), 10-K (reporting date: 2017-09-30), 10-K (reporting date: 2016-09-30), 10-K (reporting date: 2015-09-30), 10-K (reporting date: 2014-09-30).
1 2019 Calculation
Average receivable collection period = 365 ÷ Receivables turnover
= 365 ÷ 6.15 = 59
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. | Emerson Electric Co. number of days of receivables outstanding improved from 2017 to 2018 and from 2018 to 2019. |
Operating Cycle
Emerson Electric Co., operating cycle calculation, comparison to benchmarks
No. days
| Sep 30, 2019 | Sep 30, 2018 | Sep 30, 2017 | Sep 30, 2016 | Sep 30, 2015 | Sep 30, 2014 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data | |||||||
| Average inventory processing period | 65 | 67 | 70 | 53 | 51 | 52 | |
| Average receivable collection period | 59 | 70 | 73 | 68 | 71 | 75 | |
| Short-term Activity Ratio | |||||||
| Operating cycle1 | 124 | 137 | 143 | 121 | 122 | 127 | |
| Benchmarks | |||||||
| Operating Cycle, Competitors2 | |||||||
| Boeing Co. | 404 | — | — | — | — | — | |
| Caterpillar Inc. | 174 | — | — | — | — | — | |
| Eaton Corp. plc | 130 | — | — | — | — | — | |
| GE Aerospace | 147 | — | — | — | — | — | |
| Honeywell International Inc. | 141 | — | — | — | — | — | |
| Lockheed Martin Corp. | 40 | — | — | — | — | — | |
| RTX Corp. | 134 | — | — | — | — | — | |
| Operating Cycle, Sector | |||||||
| Capital Goods | 189 | — | — | — | — | — | |
| Operating Cycle, Industry | |||||||
| Industrials | 141 | — | — | — | — | — | |
Based on: 10-K (reporting date: 2019-09-30), 10-K (reporting date: 2018-09-30), 10-K (reporting date: 2017-09-30), 10-K (reporting date: 2016-09-30), 10-K (reporting date: 2015-09-30), 10-K (reporting date: 2014-09-30).
1 2019 Calculation
Operating cycle = Average inventory processing period + Average receivable collection period
= 65 + 59 = 124
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. | Emerson Electric Co. operating cycle improved from 2017 to 2018 and from 2018 to 2019. |
Average Payables Payment Period
Emerson Electric Co., average payables payment period calculation, comparison to benchmarks
| Sep 30, 2019 | Sep 30, 2018 | Sep 30, 2017 | Sep 30, 2016 | Sep 30, 2015 | Sep 30, 2014 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data | |||||||
| Payables turnover | 5.63 | 5.12 | 4.99 | 5.44 | 5.62 | 4.87 | |
| Short-term Activity Ratio (no. days) | |||||||
| Average payables payment period1 | 65 | 71 | 73 | 67 | 65 | 75 | |
| Benchmarks (no. days) | |||||||
| Average Payables Payment Period, Competitors2 | |||||||
| Boeing Co. | 79 | — | — | — | — | — | |
| Caterpillar Inc. | 59 | — | — | — | — | — | |
| Eaton Corp. plc | 54 | — | — | — | — | — | |
| GE Aerospace | 87 | — | — | — | — | — | |
| Honeywell International Inc. | 86 | — | — | — | — | — | |
| Lockheed Martin Corp. | 9 | — | — | — | — | — | |
| RTX Corp. | 69 | — | — | — | — | — | |
| Average Payables Payment Period, Sector | |||||||
| Capital Goods | 65 | — | — | — | — | — | |
| Average Payables Payment Period, Industry | |||||||
| Industrials | 49 | — | — | — | — | — | |
Based on: 10-K (reporting date: 2019-09-30), 10-K (reporting date: 2018-09-30), 10-K (reporting date: 2017-09-30), 10-K (reporting date: 2016-09-30), 10-K (reporting date: 2015-09-30), 10-K (reporting date: 2014-09-30).
1 2019 Calculation
Average payables payment period = 365 ÷ Payables turnover
= 365 ÷ 5.63 = 65
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. | Emerson Electric Co. number of days of payables outstanding decreased from 2017 to 2018 and from 2018 to 2019. |
Cash Conversion Cycle
Emerson Electric Co., cash conversion cycle calculation, comparison to benchmarks
No. days
| Sep 30, 2019 | Sep 30, 2018 | Sep 30, 2017 | Sep 30, 2016 | Sep 30, 2015 | Sep 30, 2014 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data | |||||||
| Average inventory processing period | 65 | 67 | 70 | 53 | 51 | 52 | |
| Average receivable collection period | 59 | 70 | 73 | 68 | 71 | 75 | |
| Average payables payment period | 65 | 71 | 73 | 67 | 65 | 75 | |
| Short-term Activity Ratio | |||||||
| Cash conversion cycle1 | 59 | 66 | 70 | 54 | 57 | 52 | |
| Benchmarks | |||||||
| Cash Conversion Cycle, Competitors2 | |||||||
| Boeing Co. | 325 | — | — | — | — | — | |
| Caterpillar Inc. | 115 | — | — | — | — | — | |
| Eaton Corp. plc | 76 | — | — | — | — | — | |
| GE Aerospace | 60 | — | — | — | — | — | |
| Honeywell International Inc. | 55 | — | — | — | — | — | |
| Lockheed Martin Corp. | 31 | — | — | — | — | — | |
| RTX Corp. | 65 | — | — | — | — | — | |
| Cash Conversion Cycle, Sector | |||||||
| Capital Goods | 124 | — | — | — | — | — | |
| Cash Conversion Cycle, Industry | |||||||
| Industrials | 92 | — | — | — | — | — | |
Based on: 10-K (reporting date: 2019-09-30), 10-K (reporting date: 2018-09-30), 10-K (reporting date: 2017-09-30), 10-K (reporting date: 2016-09-30), 10-K (reporting date: 2015-09-30), 10-K (reporting date: 2014-09-30).
1 2019 Calculation
Cash conversion cycle = Average inventory processing period + Average receivable collection period – Average payables payment period
= 65 + 59 – 65 = 59
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. | Emerson Electric Co. cash conversion cycle improved from 2017 to 2018 and from 2018 to 2019. |