Archer-Daniels-Midland Company (ADM)

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 7.23 7.96 7.76 6.38 6.36 6.87 6.03 4.84 5.47 6.67 6.07 4.95 5.11 6.67 7.87 6.81 6.60 7.46 7.15 6.70
Receivables turnover 22.20 21.81 24.30 22.81 20.62 21.10 17.68 21.25 25.50 21.11 21.54 20.89 22.75 23.97 24.90 26.39 28.14 28.68 26.04 25.49
Payables turnover 13.69 17.01 18.18 15.03 12.04 13.95 15.60 13.64 12.41 16.12 20.20 15.76 13.39 17.46 20.71 17.49 16.15 20.26 19.35 16.93
Working capital turnover 8.46 7.80 8.40 8.79 9.05 8.49 7.87 7.54 8.56 7.48 6.68 6.34 7.07 7.08 6.99 7.29 8.49 8.98 9.12 9.29

Archer-Daniels-Midland Company's activity ratios provide insights into its effectiveness in managing its assets and operations.

1. Inventory turnover: The company demonstrates a consistent ability to turn over its inventory efficiently, with a range of 6.03 to 7.96 times during the periods analyzed. The highest turnover was recorded in September 2023, indicating strong sales relative to inventory levels.

2. Receivables turnover: Archer-Daniels-Midland effectively collects outstanding receivables, with turnovers ranging from 17.68 to 28.68 times. The company shows a stable pattern of collecting receivables efficiently, with the highest turnover in December 2019.

3. Payables turnover: The company shows variability in its payables turnover, ranging from 12.04 to 20.71 times. A higher turnover suggests efficient management of supplier payment terms and potential liquidity benefits.

4. Working capital turnover: Archer-Daniels-Midland demonstrates a consistent ability to generate sales revenue relative to its working capital levels, with turnover ranging from 6.34 to 9.29 times. This indicates effective utilization of working capital to support operational activities and revenue generation.

Overall, these activity ratios suggest that Archer-Daniels-Midland is effectively managing its inventory, receivables, payables, and working capital to support its operational efficiency and financial performance.

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 50.50 45.85 47.04 57.22 57.36 53.13 60.50 75.43 66.68 54.76 60.10 73.68 71.37 54.73 46.39 53.58 55.31 48.92 51.02 54.51
Days of sales outstanding (DSO) days 16.44 16.74 15.02 16.00 17.70 17.30 20.64 17.17 14.31 17.29 16.94 17.48 16.05 15.23 14.66 13.83 12.97 12.73 14.02 14.32
Number of days of payables days 26.66 21.45 20.07 24.29 30.30 26.17 23.39 26.76 29.42 22.64 18.07 23.15 27.26 20.91 17.62 20.87 22.60 18.01 18.87 21.56

Archer-Daniels-Midland Company's activity ratios provide insights into how efficiently the company manages its inventory, collects receivables, and pays its suppliers.

1. Days of Inventory on Hand (DOH): The company has shown a varying trend in managing its inventory levels over the past few quarters. In the most recent quarter, the days of inventory on hand were 50.50 days, indicating that the company held its inventory for approximately 50.50 days before it was sold. This metric has fluctuated between 45.85 days to 75.43 days over the last year. A lower DOH generally implies better inventory management.

2. Days of Sales Outstanding (DSO): The days of sales outstanding metric reflects the average number of days it takes for the company to collect payments from its customers. Archer-Daniels-Midland has been consistent in collecting receivables efficiently, with DSO ranging from 12.73 days to 20.64 days over the past year. A lower DSO is considered favorable as it indicates quicker collection of receivables.

3. Number of Days of Payables: This ratio signifies the average number of days it takes for the company to pay its suppliers. The trend for Archer-Daniels-Midland shows that it takes between 17.62 days to 30.30 days to pay its suppliers over the past year. A higher number of days of payables means the company is taking longer to pay its bills. However, a high number of days of payables can also indicate that the company is effectively using supplier credit to manage cash flow.

Overall, the company's activity ratios suggest a mixed performance in managing inventory, collecting receivables, and paying suppliers efficiently. Monitoring these ratios can help investors and stakeholders evaluate the company's operational effectiveness and financial health.

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 8.94 9.48 9.86 10.13 10.22 10.28 9.75 9.19 8.70 8.14 7.59 6.97 6.58 6.39 6.54 6.51 6.40 6.36 6.18 6.23
Total asset turnover 1.72 1.76 1.80 1.73 1.70 1.69 1.53 1.39 1.52 1.53 1.47 1.33 1.29 1.40 1.45 1.33 1.47 1.54 1.49 1.49

Archer-Daniels-Midland Company's long-term activity ratios show its efficiency in utilizing its long-term assets to generate revenue. The fixed asset turnover ratio, which measures how efficiently the company is using its fixed assets to generate sales, has been fluctuating over the analyzed period but generally shows a declining trend. This decline indicates that the company may be becoming less efficient in generating sales from its fixed assets.

On the other hand, the total asset turnover ratio, which measures how efficiently the company is using all its assets to generate sales, has also been fluctuating but seems to be relatively stable compared to the fixed asset turnover ratio. This ratio provides a more comprehensive view of the company's overall asset utilization efficiency.

It is important for Archer-Daniels-Midland Company to closely monitor these ratios and analyze the reasons behind any fluctuations to ensure optimal asset utilization and improve operational efficiency. Declining activity ratios may indicate potential inefficiencies in the company's operations that need to be addressed to enhance long-term profitability.