The Andersons Inc (ANDE)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Inventory turnover | 12.00 | 9.61 | 6.62 | 5.95 | 6.44 |
| Receivables turnover | 19.34 | 13.74 | 14.92 | 12.12 | 14.63 |
| Payables turnover | — | — | — | — | — |
| Working capital turnover | 12.60 | 18.34 | 13.88 | 16.64 | 15.83 |
The inventory turnover for Andersons Inc. has been increasing steadily over the past five years, indicating that the company has been managing its inventory more efficiently and turning over its inventory more frequently. This suggests that Andersons Inc. is selling through its inventory at a faster rate, which can lead to lower carrying costs and potential higher profitability.
The receivables turnover ratio has shown fluctuations over the years but has generally been increasing. This indicates that Andersons Inc. is collecting its accounts receivable more quickly, which is a positive sign of effective credit management and liquidity.
The payables turnover ratio data is not provided for Andersons Inc., so we are unable to assess the company's payment practices or how efficiently it is managing its accounts payable.
The working capital turnover ratio has also exhibited fluctuations but has remained relatively stable over the years. A higher working capital turnover ratio means that Andersons Inc. is generating more revenue for each dollar of working capital invested, indicating efficient use of resources to generate sales.
Overall, the activity ratios suggest that Andersons Inc. has been improving its efficiency in managing inventory and accounts receivable, which is essential for maintaining liquidity and achieving long-term profitability.
Average number of days
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 30.41 | 37.98 | 55.10 | 61.31 | 56.65 |
| Days of sales outstanding (DSO) | days | 18.87 | 26.57 | 24.46 | 30.12 | 24.95 |
| Number of days of payables | days | — | — | — | — | — |
The Days of Inventory on Hand (DOH) for Andersons Inc. have shown a favorable trend over the past five years, decreasing from 60.84 days in 2019 to 30.41 days in 2023. This indicates that the company is able to manage its inventory more efficiently, potentially reducing carrying costs and improving cash flow.
On the other hand, the Days of Sales Outstanding (DSO) have exhibited some fluctuations over the same period, with a notable decrease from 29.34 days in 2020 to 18.87 days in 2023. A lower DSO suggests that Andersons Inc. is collecting its accounts receivable more quickly, which could improve liquidity and reduce the risk of bad debts.
Unfortunately, the data provided does not include the Number of Days of Payables for Andersons Inc., making it challenging to assess the company's payment practices and liquidity position fully. Further information on this metric would be necessary to gain a comprehensive understanding of the company's overall efficiency in managing its working capital.
Long-term
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Fixed asset turnover | 21.27 | 22.72 | 16.05 | 9.37 | 8.53 |
| Total asset turnover | 3.83 | 3.76 | 2.76 | 1.89 | 2.05 |
The long-term activity ratios for Andersons Inc. provide insights into the efficiency of the company's utilization of its fixed and total assets over the last five years.
1. Fixed Asset Turnover:
- The fixed asset turnover ratio measures how effectively a company generates sales revenue from its investment in fixed assets. A higher ratio indicates better efficiency in utilizing fixed assets to generate sales.
- Andersons Inc. experienced a fluctuating trend in fixed asset turnover over the past five years, with a peak in 2022 at 22.72 and a low in 2019 at 8.71.
- The significant increase from 2019 to 2022 suggests that the company improved its efficiency in generating sales from its fixed assets, possibly through better asset utilization or revenue growth.
2. Total Asset Turnover:
- The total asset turnover ratio measures how efficiently a company generates sales revenue from its total assets, including both fixed and current assets. A higher ratio indicates better efficiency in utilizing all assets to generate sales.
- Andersons Inc. showed an increasing trend in total asset turnover over the five-year period, with a notable increase from 2019 to 2020.
- The company's total asset turnover ratio surpassed 3 in the last three years, indicating that Andersons Inc. effectively used its assets to generate sales revenue.
Overall, the upward trend in total asset turnover reflects the company's improving efficiency in utilizing both fixed and current assets to drive sales. While the fixed asset turnover ratio fluctuated, the overall trend indicates that Andersons Inc. has been successful in optimizing its assets to generate revenue.