Alamo Group Inc (ALG)

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 3.96 3.95 3.87 3.86 3.88 3.68 3.71 3.57 3.81 4.03 4.30 4.28 4.43 4.44 4.30 3.95 3.84 4.75 4.68 4.44
Receivables turnover 4.67 4.36 4.22 4.29 4.75 4.78 4.63 4.65 5.55 5.25 4.72 4.71 5.40 5.23 4.92 4.57 4.46 4.30 3.85 3.76
Payables turnover 15.01 13.22 12.30 13.78 14.04 13.23 12.24 11.10 12.05 11.07 10.87 11.39 14.27 13.18 16.86 12.15 12.55 14.23 14.30 13.35
Working capital turnover 2.86 2.52 2.44 2.44 2.82 2.62 2.56 2.51 3.17 2.93 2.84 2.65 3.25 2.85 2.62 2.53 2.74 2.66 2.53 2.48

The activity ratios for Alamo Group Inc. provide insights into the efficiency of the company's operations in managing its inventory, receivables, payables, and working capital.

- Inventory turnover remained relatively stable around 3.20 to 3.27 over the past eight quarters, indicating that Alamo Group effectively manages its inventory levels, with a high turnover rate suggesting efficient inventory management.

- Receivables turnover fluctuated between 4.24 and 4.80, with a decreasing trend in recent quarters. This suggests that the company is collecting its receivables at a slower rate, which may require closer monitoring to ensure timely collection of outstanding amounts.

- Payables turnover improved from 9.10 in Q1 2022 to 12.40 in Q4 2023, indicating that Alamo Group is taking longer to pay its suppliers, which can improve cash flow and working capital management.

- Working capital turnover varied between 2.44 and 2.86, showing the liquidity efficiency of the company in generating revenue from its working capital. An increasing trend in this ratio demonstrates the company's ability to generate sales from its current assets.

Overall, the activity ratios reflect Alamo Group's efforts to effectively manage its assets and liabilities to support its operations and financial performance. Monitoring these ratios over time can help assess the company's operational efficiency and financial health.

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 92.09 92.49 94.26 94.60 94.00 99.22 98.36 102.27 95.89 90.61 84.85 85.37 82.33 82.20 84.92 92.48 94.93 76.77 78.00 82.26
Days of sales outstanding (DSO) days 78.24 83.79 86.46 85.04 76.81 76.36 78.76 78.52 65.73 69.48 77.30 77.55 67.61 69.74 74.26 79.92 81.82 84.94 94.80 97.12
Number of days of payables days 24.32 27.60 29.68 26.49 26.01 27.60 29.82 32.90 30.30 32.96 33.59 32.03 25.57 27.70 21.65 30.04 29.08 25.65 25.53 27.34

The activity ratios of Alamo Group Inc. can provide insights into the efficiency of the company's operations and management of its working capital.

1. Days of Inventory on Hand (DOH): Alamo Group Inc. has shown consistent improvement in managing its inventory levels over the past quarters. The decreasing trend in DOH from Q1 2022 to Q4 2023 indicates that the company is able to turn over its inventory more quickly, which can result in lower carrying costs and reduced risk of obsolete inventory.

2. Days of Sales Outstanding (DSO): The DSO ratio reflects the average number of days it takes for the company to collect revenue from its customers. The increasing trend in DSO from Q4 2022 to Q2 2023 suggests that Alamo Group Inc. may be facing challenges in collecting payments promptly. This could potentially impact the company's cash flow and liquidity position.

3. Number of Days of Payables: Alamo Group Inc. has managed to effectively extend the time it takes to pay its suppliers, as indicated by the increasing trend in the number of days of payables from Q1 2022 to Q4 2023. By delaying payments to suppliers, the company can preserve its cash resources and improve its working capital position.

Overall, while Alamo Group Inc. has shown improvements in managing inventory levels and payables, the increasing trend in DSO warrants attention to ensure efficient cash flow management and liquidity in the future.

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 10.14 10.03 9.81 9.86 9.76 9.53 9.29 9.10 8.73 8.73 8.32 7.61 7.49 7.53 7.37 7.48 6.97 10.04 10.05 10.15
Total asset turnover 1.20 1.13 1.10 1.09 1.16 1.10 1.07 1.03 1.10 1.06 1.03 0.96 1.04 0.99 0.97 0.93 0.92 1.25 1.22 1.21

Alamo Group Inc.'s long-term activity ratios show a consistent and strong performance over the past eight quarters. The fixed asset turnover ratio has been steadily increasing from 7.55 in Q1 2022 to 8.21 in Q4 2023, indicating that the company is generating more revenue relative to its investment in fixed assets. This upward trend suggests that Alamo Group is effectively utilizing its fixed assets to drive sales.

Similarly, the total asset turnover ratio has shown a generally positive trend, with some fluctuations, from 1.04 in Q1 2022 to 1.20 in Q4 2023. This ratio measures how efficiently the company is generating sales from its total assets. The increasing trend implies that Alamo Group is effectively managing its total assets to generate revenue.

Overall, both the fixed asset turnover and total asset turnover ratios demonstrate Alamo Group's efficiency in utilizing its assets to drive sales growth and revenue generation. This consistent performance indicates the company's ability to effectively manage and deploy its long-term assets for profitability and operational effectiveness.