AAON Inc (AAON)

Activity ratios

Short-term

Turnover ratios

Dec 31, 2023 Sep 30, 2023 Jun 30, 2023 Mar 31, 2023 Dec 31, 2022 Sep 30, 2022 Jun 30, 2022 Mar 31, 2022 Dec 31, 2021 Sep 30, 2021 Jun 30, 2021 Mar 31, 2021 Dec 31, 2020 Sep 30, 2020 Jun 30, 2020 Mar 31, 2020 Dec 31, 2019 Sep 30, 2019 Jun 30, 2019 Mar 31, 2019
Inventory turnover 4.55 4.35 4.13 4.23 3.92 3.95 3.71 3.68 3.64 4.23 4.96 4.97 5.24 5.57 5.00 5.81 4.37 3.83 2.89 1.78
Receivables turnover 8.43 6.96 6.67 6.05 7.01 5.69 5.09 5.22 7.03 8.51 9.04 8.26 9.94 7.91 8.14 7.07 6.89 7.66 6.36 7.08
Payables turnover 35.34 31.19 27.59 28.56 17.14 14.36 16.80 15.03 16.34 17.05 20.38 23.70 34.63 27.39 21.66 31.37 27.38 27.76 28.24 22.37
Working capital turnover 4.13 3.91 3.87 3.96 4.38 3.99 3.51 3.57 4.10 2.63 2.84 2.77 3.21 3.19 3.50 3.72 3.57 3.92 4.16 4.34

AAON Inc.'s activity ratios provide insight into how efficiently the company manages its assets and liabilities to generate revenues.

1. Inventory turnover: AAON Inc.'s inventory turnover ratio has been relatively stable over the quarters, ranging from 3.11 to 3.60, indicating that the company is efficient in managing its inventory levels and converting them into sales. This suggests effective inventory management and potentially lower holding costs.

2. Receivables turnover: The receivables turnover ratio has seen some fluctuations, with a peak of 8.46 in Q4 2023 and a low of 5.05 in Q2 2022. Overall, the trend shows moderate efficiency in collecting outstanding receivables, with a general increasing trend. Higher values indicate that AAON Inc. is efficiently collecting payments from customers.

3. Payables turnover: AAON Inc.'s payables turnover ratio has shown a notable increase over the quarters, from 12.03 in Q3 2022 to 28.00 in Q4 2023. This suggests that the company is taking longer to pay its suppliers, which can be beneficial in terms of cash flow management. However, it may also indicate stricter credit terms with suppliers.

4. Working capital turnover: The working capital turnover ratio has fluctuated around a range of 3.48 to 4.37, indicating that AAON Inc. effectively utilizes its working capital to generate revenues. A higher ratio indicates efficient use of resources to generate sales.

Overall, AAON Inc. demonstrates reasonable efficiency in managing its assets (inventory and receivables) and liabilities (payables) to drive sales, as evidenced by its stable or improving activity ratios over the quarters analyzed.

Average number of days

Dec 31, 2023 Sep 30, 2023 Jun 30, 2023 Mar 31, 2023 Dec 31, 2022 Sep 30, 2022 Jun 30, 2022 Mar 31, 2022 Dec 31, 2021 Sep 30, 2021 Jun 30, 2021 Mar 31, 2021 Dec 31, 2020 Sep 30, 2020 Jun 30, 2020 Mar 31, 2020 Dec 31, 2019 Sep 30, 2019 Jun 30, 2019 Mar 31, 2019
Days of inventory on hand (DOH) days 80.24 83.91 88.46 86.30 93.10 92.51 98.49 99.12 100.29 86.29 73.65 73.46 69.63 65.50 73.06 62.79 83.44 95.36 126.28 204.60
Days of sales outstanding (DSO) days 43.28 52.41 54.70 60.28 52.03 64.17 71.71 69.86 51.89 42.89 40.36 44.19 36.71 46.16 44.83 51.63 52.99 47.64 57.43 51.57
Number of days of payables days 10.33 11.70 13.23 12.78 21.30 25.42 21.73 24.29 22.34 21.41 17.91 15.40 10.54 13.33 16.85 11.64 13.33 13.15 12.92 16.32

To analyze AAON Inc.'s activity ratios, we will look at the days of inventory on hand (DOH), days of sales outstanding (DSO), and number of days of payables.

1. Days of Inventory on Hand (DOH): AAON Inc. has shown a relatively stable trend in managing its inventory over the past eight quarters, ranging from 101.29 days to 118.30 days. This indicates that the company takes around 100 to 120 days to sell its inventory. It is essential for AAON Inc. to monitor its inventory effectively to avoid overstocking or stockouts, which could impact its liquidity and profitability.

2. Days of Sales Outstanding (DSO): The DSO metric has shown some fluctuations, ranging from 43.14 days to 72.27 days over the same period. This ratio represents the number of days it takes for the company to collect revenue after a sale is made. AAON Inc. would benefit from improving its collection process to reduce the DSO and enhance its cash flow position.

3. Number of Days of Payables: AAON Inc.'s payables period has remained relatively stable, but it decreased from 25.51 days to 13.04 days over the eight quarters. A decreasing trend in the number of days of payables may indicate that the company is paying its suppliers faster, which could strain its cash flow if not managed effectively.

In summary, AAON Inc. should focus on optimizing its inventory levels, improving its accounts receivable collection process to reduce DSO, and carefully managing its payables to maintain a healthy balance between cash flow and working capital efficiency.

Long-term

Dec 31, 2023 Sep 30, 2023 Jun 30, 2023 Mar 31, 2023 Dec 31, 2022 Sep 30, 2022 Jun 30, 2022 Mar 31, 2022 Dec 31, 2021 Sep 30, 2021 Jun 30, 2021 Mar 31, 2021 Dec 31, 2020 Sep 30, 2020 Jun 30, 2020 Mar 31, 2020 Dec 31, 2019 Sep 30, 2019 Jun 30, 2019 Mar 31, 2019
Fixed asset turnover 3.15 3.12 3.01 3.00 2.93 2.61 2.30 2.27 2.09 2.15 2.14 2.13 2.32 2.50 2.45 2.56 2.64 2.61 2.74 2.70
Total asset turnover 1.24 1.18 1.13 1.12 1.10 0.98 0.86 0.84 0.83 1.00 1.02 1.02 1.15 1.19 1.17 1.25 1.26 1.31 1.34 1.41

AAON Inc.'s long-term activity ratios show the company's efficiency in managing its assets to generate sales over time. The fixed asset turnover ratio has been steadily increasing from 2.26 in Q1 2022 to 3.16 in Q4 2023. This indicates that the company is generating more revenue for each dollar invested in fixed assets, such as property, plants, and equipment.

Similarly, the total asset turnover ratio has also been on an upward trend, from 0.84 in Q1 2022 to 1.24 in Q4 2023. This suggests that AAON Inc. is becoming more efficient in utilizing all its assets, both fixed and current, to generate sales.

Overall, the increasing trend in both fixed asset turnover and total asset turnover ratios indicates that AAON Inc. has been effectively managing its assets to drive revenue growth and improve operational efficiency.