ABM Industries Incorporated (ABM)
Activity ratios
Short-term
Turnover ratios
| Oct 31, 2024 | Oct 31, 2023 | Oct 31, 2022 | Oct 31, 2021 | Oct 31, 2020 | |
|---|---|---|---|---|---|
| Inventory turnover | — | 97.96 | 90.80 | 67.96 | 68.96 |
| Receivables turnover | — | — | — | — | — |
| Payables turnover | 25.14 | 25.71 | 23.63 | 20.83 | 21.55 |
| Working capital turnover | 18.99 | 16.26 | 37.33 | 53.73 | 13.06 |
Based on the activity ratios provided for ABM Industries Incorporated, we can draw several key insights:
1. Inventory Turnover:
The inventory turnover ratio measures how efficiently a company manages its inventory by indicating how many times during a period the company has sold and replaced its inventory. ABM's inventory turnover has been relatively stable over the past five years, averaging around 80 times a year. This indicates that ABM efficiently manages its inventory levels and has a fast-moving inventory.
2. Receivables Turnover:
Unfortunately, the data provided does not contain information on the receivables turnover for ABM. Without this ratio, it is difficult to assess how efficiently the company collects payments from its customers.
3. Payables Turnover:
The payables turnover ratio reveals how many times a company pays off its accounts payable during a given period. ABM Industries Incorporated has seen a consistent payables turnover ratio ranging between 20 and 26 times per year over the past five years. This suggests that the company effectively manages its accounts payable by settling them multiple times a year.
4. Working Capital Turnover:
The working capital turnover ratio evaluates how effectively a company utilizes its working capital to generate sales revenue. ABM's working capital turnover has shown fluctuations over the years, with a significant increase in 2022 followed by a decline in 2023 and a subsequent increase in 2024. This indicates that the company's ability to generate sales revenue relative to its working capital has varied over the years.
In conclusion, based on the activity ratios provided, ABM Industries Incorporated appears to have a strong inventory management system and efficient accounts payable practices. However, the lack of data on receivables turnover makes it challenging to provide a comprehensive assessment of the company's overall efficiency in managing its working capital.
Average number of days
| Oct 31, 2024 | Oct 31, 2023 | Oct 31, 2022 | Oct 31, 2021 | Oct 31, 2020 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | — | 3.73 | 4.02 | 5.37 | 5.29 |
| Days of sales outstanding (DSO) | days | — | — | — | — | — |
| Number of days of payables | days | 14.52 | 14.20 | 15.45 | 17.52 | 16.94 |
Days of inventory on hand (DOH) for ABM Industries has shown a decreasing trend over the past five years, indicating an improvement in inventory management efficiency. The company's inventory turnover has been increasing, leading to fewer days of inventory on hand, which is a positive sign.
Days of sales outstanding (DSO) data is not available, which limits the ability to analyze the company's accounts receivable turnover efficiency.
The number of days of payables for ABM Industries has decreased over the past five years, indicating that the company is taking longer to pay its suppliers. This could be a strategic move to improve cash flow by delaying payments, but it could also signal challenges in managing vendor relationships.
Long-term
| Oct 31, 2024 | Oct 31, 2023 | Oct 31, 2022 | Oct 31, 2021 | Oct 31, 2020 | |
|---|---|---|---|---|---|
| Fixed asset turnover | 55.47 | 60.94 | 61.93 | 55.41 | 44.45 |
| Total asset turnover | 1.64 | 1.62 | 1.59 | 1.40 | 1.57 |
The long-term activity ratios of ABM Industries Incorporated, as indicated by the fixed asset turnover and total asset turnover ratios, show fluctuations over the five-year period from 2020 to 2024.
The fixed asset turnover ratio, which measures the efficiency of the company in generating sales from its fixed assets, has ranged from 44.45 in 2020 to 61.93 in 2022, showing an overall increasing trend. This indicates that the company has been able to utilize its fixed assets more effectively to generate revenue over time.
In contrast, the total asset turnover ratio, which reflects the company's ability to generate sales from all its assets, has fluctuated between 1.40 in 2021 and 1.64 in 2024. This ratio indicates that the company's overall efficiency in generating sales from its total assets has varied over the five-year period.
Overall, the increasing trend in the fixed asset turnover ratio coupled with fluctuations in the total asset turnover ratio suggests that ABM Industries Incorporated has been able to improve its efficiency in using fixed assets to generate revenue, while its overall efficiency in utilizing all assets for sales generation has varied over the years. Further analysis of the company's asset management and operational strategies could provide additional insights into these long-term activity ratios.