AAR Corp (AIR)

Short-term

Turnover ratios

The activity ratios for AAR Corp provide insight into how efficiently the company manages its inventory, receivables, payables, and working capital.

1. Inventory turnover: This ratio measures how many times during the period the company sells and replaces its inventory. A higher turnover indicates more efficient inventory management. Over the past few quarters, AAR Corp's inventory turnover has fluctuated, with a notable increase in the most recent period compared to previous quarters.

2. Receivables turnover: This ratio indicates how quickly the company collects payments from its customers. A higher turnover implies speedy collections. AAR Corp has maintained a relatively stable and healthy receivables turnover over the quarters, showcasing consistency in its collection efforts.

3. Payables turnover: This ratio assesses how quickly the company pays its suppliers. A higher turnover suggests efficient management of payables. AAR Corp's payables turnover has shown variability over the quarters, with a notable increase in the most recent period compared to earlier quarters.

4. Working capital turnover: This ratio evaluates how efficiently the company utilizes its working capital to generate sales. A higher turnover implies more effective utilization of capital. AAR Corp's working capital turnover has remained relatively stable over the quarters, indicating consistent performance in utilizing its working capital effectively to support its operations.

In summary, AAR Corp has shown improvements in inventory turnover and payables turnover in the most recent period, maintaining a stable performance in receivables turnover and working capital turnover. These ratios collectively indicate a balanced approach to managing operational efficiency and liquidity.

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Average number of days

AAR Corp's activity ratios indicate how efficiently the company manages its inventory, receivables, and payables.

Days of Inventory on Hand (DOH):
- The trend in DOH shows significant fluctuations, ranging from 121.94 days to 1,457.42 days over the observed periods.
- Initially, the DOH increased sharply, indicating an inefficient management of inventory, but later decreased, which might suggest improvements in inventory management.

Days of Sales Outstanding (DSO):
- DSO remained relatively stable around 40-45 days, indicating that AAR Corp collects its receivables within a reasonable timeframe.
- Notable improvements were observed over time, with DSO decreasing from 44.54 days to 30.23 days, showing enhanced efficiency in collecting receivables.

Number of Days of Payables:
- AAR Corp's payables days fluctuated, with values ranging from 39.59 days to 471.68 days during the analyzed periods.
- The company seems to adopt varying strategies regarding payables management, with periods of tightening payables followed by extended payment terms.

Overall, AAR Corp has shown improvements in managing its receivables efficiently. However, inventory management remains volatile, and the approach to payables shows inconsistency over time.

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Long-term

The fixed asset turnover ratio of AAR Corp has shown consistent improvement over the periods analyzed, ranging from 13.24 to 16.62. This indicates that the company is generating more revenue relative to its investment in fixed assets, which is a positive sign of operational efficiency and asset utilization.

On the other hand, the total asset turnover ratio for AAR Corp fluctuated between 0.82 and 1.25 during the same period. This variability suggests that the company's ability to generate sales from its total assets has been somewhat volatile. However, the ratio has generally been above 1, indicating that AAR Corp is effectively utilizing its assets to generate revenue.

Overall, AAR Corp's long-term activity ratios depict a strong operational performance in terms of utilizing both fixed and total assets to generate revenue, with the fixed asset turnover ratio showing a more stable upward trend compared to the total asset turnover ratio.