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)
Sherwin-Williams Co., 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. | Sherwin-Williams Co. inventory turnover ratio deteriorated from 2021 to 2022 but then slightly improved from 2022 to 2023. |
| Receivables turnover | An activity ratio equal to revenue divided by receivables. | Sherwin-Williams Co. receivables turnover ratio improved from 2021 to 2022 and from 2022 to 2023. |
| Payables turnover | An activity ratio calculated as cost of goods sold divided by payables. | Sherwin-Williams Co. payables turnover ratio increased from 2021 to 2022 and 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. | Sherwin-Williams Co. number of days of inventory outstanding deteriorated from 2021 to 2022 but then slightly improved from 2022 to 2023. |
| Average receivable collection period | An activity ratio equal to the number of days in the period divided by receivables turnover. | Sherwin-Williams Co. number of days of receivables outstanding improved from 2021 to 2022 and from 2022 to 2023. |
| Operating cycle | Equal to average inventory processing period plus average receivables collection period. | Sherwin-Williams Co. operating cycle deteriorated from 2021 to 2022 but then improved from 2022 to 2023 not reaching 2021 level. |
| 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. | |
| 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. | Sherwin-Williams Co. cash conversion cycle deteriorated from 2021 to 2022 but then slightly improved from 2022 to 2023. |
Inventory Turnover
Sherwin-Williams Co., 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 thousands) | ||||||
| Cost of goods sold | 12,293,800) | 12,823,800) | 11,401,900) | 9,679,100) | 9,864,700) | |
| Inventories | 2,329,800) | 2,626,500) | 1,927,200) | 1,804,100) | 1,889,600) | |
| Short-term Activity Ratio | ||||||
| Inventory turnover1 | 5.28 | 4.88 | 5.92 | 5.37 | 5.22 | |
| Benchmarks | ||||||
| Inventory Turnover, Competitors2 | ||||||
| Linde plc | 8.27 | 9.83 | 10.12 | 8.90 | 9.81 | |
| 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 goods sold ÷ Inventories
= 12,293,800 ÷ 2,329,800 = 5.28
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. | Sherwin-Williams Co. inventory turnover ratio deteriorated from 2021 to 2022 but then slightly improved from 2022 to 2023. |
Receivables Turnover
Sherwin-Williams Co., 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 thousands) | ||||||
| Net sales | 23,051,900) | 22,148,900) | 19,944,600) | 18,361,700) | 17,900,800) | |
| Accounts receivable, less allowance | 2,467,900) | 2,563,600) | 2,352,400) | 2,078,100) | 2,088,900) | |
| Short-term Activity Ratio | ||||||
| Receivables turnover1 | 9.34 | 8.64 | 8.48 | 8.84 | 8.57 | |
| Benchmarks | ||||||
| Receivables Turnover, Competitors2 | ||||||
| Linde plc | 6.96 | 7.32 | 6.84 | 6.54 | 6.53 | |
| 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 = Net sales ÷ Accounts receivable, less allowance
= 23,051,900 ÷ 2,467,900 = 9.34
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. | Sherwin-Williams Co. receivables turnover ratio improved from 2021 to 2022 and from 2022 to 2023. |
Payables Turnover
Sherwin-Williams Co., 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 thousands) | ||||||
| Cost of goods sold | 12,293,800) | 12,823,800) | 11,401,900) | 9,679,100) | 9,864,700) | |
| Accounts payable | 2,315,000) | 2,436,500) | 2,403,000) | 2,117,800) | 1,876,300) | |
| Short-term Activity Ratio | ||||||
| Payables turnover1 | 5.31 | 5.26 | 4.74 | 4.57 | 5.26 | |
| Benchmarks | ||||||
| Payables Turnover, Competitors2 | ||||||
| Linde plc | 5.79 | 6.49 | 5.01 | 4.97 | 5.10 | |
| 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 goods sold ÷ Accounts payable
= 12,293,800 ÷ 2,315,000 = 5.31
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. | Sherwin-Williams Co. payables turnover ratio increased from 2021 to 2022 and from 2022 to 2023. |
Working Capital Turnover
Sherwin-Williams Co., 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 thousands) | ||||||
| Current assets | 5,512,900) | 5,907,700) | 5,053,700) | 4,591,400) | 4,631,700) | |
| Less: Current liabilities | 6,626,900) | 5,960,700) | 5,719,500) | 4,594,400) | 4,521,900) | |
| Working capital | (1,114,000) | (53,000) | (665,800) | (3,000) | 109,800) | |
| Net sales | 23,051,900) | 22,148,900) | 19,944,600) | 18,361,700) | 17,900,800) | |
| Short-term Activity Ratio | ||||||
| Working capital turnover1 | — | — | — | — | 163.03 | |
| Benchmarks | ||||||
| Working Capital Turnover, Competitors2 | ||||||
| Linde plc | — | — | — | — | — | |
| 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 = Net sales ÷ Working capital
= 23,051,900 ÷ -1,114,000 = —
2 Click competitor name to see calculations.
Average Inventory Processing Period
Sherwin-Williams Co., 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 | 5.28 | 4.88 | 5.92 | 5.37 | 5.22 | |
| Short-term Activity Ratio (no. days) | ||||||
| Average inventory processing period1 | 69 | 75 | 62 | 68 | 70 | |
| Benchmarks (no. days) | ||||||
| Average Inventory Processing Period, Competitors2 | ||||||
| Linde plc | 44 | 37 | 36 | 41 | 37 | |
| 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 ÷ 5.28 = 69
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. | Sherwin-Williams Co. number of days of inventory outstanding deteriorated from 2021 to 2022 but then slightly improved from 2022 to 2023. |
Average Receivable Collection Period
Sherwin-Williams Co., 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 | 9.34 | 8.64 | 8.48 | 8.84 | 8.57 | |
| Short-term Activity Ratio (no. days) | ||||||
| Average receivable collection period1 | 39 | 42 | 43 | 41 | 43 | |
| Benchmarks (no. days) | ||||||
| Average Receivable Collection Period, Competitors2 | ||||||
| Linde plc | 52 | 50 | 53 | 56 | 56 | |
| 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 ÷ 9.34 = 39
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. | Sherwin-Williams Co. number of days of receivables outstanding improved from 2021 to 2022 and from 2022 to 2023. |
Operating Cycle
Sherwin-Williams Co., 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 | 69 | 75 | 62 | 68 | 70 | |
| Average receivable collection period | 39 | 42 | 43 | 41 | 43 | |
| Short-term Activity Ratio | ||||||
| Operating cycle1 | 108 | 117 | 105 | 109 | 113 | |
| Benchmarks | ||||||
| Operating Cycle, Competitors2 | ||||||
| Linde plc | 96 | 87 | 89 | 97 | 93 | |
| 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
= 69 + 39 = 108
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. | Sherwin-Williams Co. operating cycle deteriorated from 2021 to 2022 but then improved from 2022 to 2023 not reaching 2021 level. |
Average Payables Payment Period
Sherwin-Williams Co., 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 | 5.31 | 5.26 | 4.74 | 4.57 | 5.26 | |
| Short-term Activity Ratio (no. days) | ||||||
| Average payables payment period1 | 69 | 69 | 77 | 80 | 69 | |
| Benchmarks (no. days) | ||||||
| Average Payables Payment Period, Competitors2 | ||||||
| Linde plc | 63 | 56 | 73 | 73 | 72 | |
| 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 ÷ 5.31 = 69
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. |
Cash Conversion Cycle
Sherwin-Williams Co., 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 | 69 | 75 | 62 | 68 | 70 | |
| Average receivable collection period | 39 | 42 | 43 | 41 | 43 | |
| Average payables payment period | 69 | 69 | 77 | 80 | 69 | |
| Short-term Activity Ratio | ||||||
| Cash conversion cycle1 | 39 | 48 | 28 | 29 | 44 | |
| Benchmarks | ||||||
| Cash Conversion Cycle, Competitors2 | ||||||
| Linde plc | 33 | 31 | 16 | 24 | 21 | |
| 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
= 69 + 39 – 69 = 39
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. | Sherwin-Williams Co. cash conversion cycle deteriorated from 2021 to 2022 but then slightly improved from 2022 to 2023. |