Smith AO Corporation (AOS)

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 6.29 5.93 5.99 6.13 6.02 6.03 6.49 6.37 6.57 7.85 8.11 8.14 8.23 8.01 7.90 7.92 8.39 8.30 8.00 8.25
Receivables turnover 6.44 6.45 6.32 6.36 6.44 6.75 6.19 6.15 5.57 5.41 5.30 5.65 4.94 4.90 5.37 5.48 5.06 4.96 4.84 4.77
Payables turnover 5.21 5.48 5.59 5.61 4.97 5.32 5.12 4.72 3.94 4.32 4.37 4.65 4.15 4.69 5.55 5.60 4.99 5.33 5.29 5.36
Working capital turnover 6.92 6.22 5.31 4.99 5.35 5.69 5.47 5.20 5.58 4.47 4.74 4.19 3.95 4.49 3.91 3.86 4.07 3.94 3.55 3.41

A.O. Smith Corp.'s activity ratios provide insights into the efficiency of the company's operations in managing its inventory, receivables, and payables, as well as the overall utilization of its working capital.

1. Inventory turnover: The company's inventory turnover has shown slight fluctuations over the quarters, ranging from 4.50 to 4.76. A higher inventory turnover indicates that A.O. Smith Corp. is efficiently managing its inventory levels and selling its products quickly.

2. Receivables turnover: A.O. Smith Corp. has maintained relatively consistent receivables turnover ratios between 6.16 and 6.76. This suggests that the company is efficiently collecting payments from its customers, translating its credit sales into cash quickly.

3. Payables turnover: The payables turnover ratio has also shown some variability, with values between 3.62 and 4.33. A higher payables turnover implies that the company is paying its suppliers promptly, which can be beneficial for maintaining strong supplier relationships.

4. Working capital turnover: A.O. Smith Corp. has demonstrated a consistent trend in its working capital turnover ratios, with values ranging from 5.00 to 6.94. A higher working capital turnover reflects how effectively the company is utilizing its working capital to generate sales revenue.

Overall, the company's activity ratios suggest that A.O. Smith Corp. is efficiently managing its inventory, receivables, payables, and working capital, which is essential for sustaining its operations and generating profit.

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 58.06 61.57 60.95 59.55 60.65 60.51 56.28 57.34 55.55 46.52 45.03 44.86 44.35 45.54 46.20 46.07 43.48 43.95 45.64 44.24
Days of sales outstanding (DSO) days 56.64 56.62 57.73 57.41 56.65 54.11 58.96 59.32 65.51 67.46 68.81 64.55 73.91 74.54 67.93 66.58 72.10 73.59 75.40 76.54
Number of days of payables days 70.09 66.64 65.33 65.07 73.49 68.57 71.29 77.29 92.55 84.49 83.46 78.50 87.97 77.80 65.78 65.20 73.13 68.49 68.99 68.13

Days of Inventory on Hand (DOH) measures the average number of days it takes for A.O. Smith Corp. to sell its inventory. We observe fluctuations in this ratio over the quarters, ranging from a low of 72.65 days in Q2 2022 to a high of 81.05 days in Q3 2023. Generally, a lower DOH indicates efficient inventory management.

Days of Sales Outstanding (DSO) represents the average number of days it takes for A.O. Smith Corp. to collect revenue after a sale is made. The company has maintained relatively stable DSO values over the quarters, with slight variations. Lower DSO values are favorable as they indicate faster collection of receivables.

Number of Days of Payables shows how long A.O. Smith Corp. takes to pay its suppliers. We notice fluctuations in this metric as well, with the number of days ranging from 85.57 days in Q2 2023 to 100.86 days in Q1 2022. A higher number of days of payables suggests the company takes longer to settle its debts, potentially improving cash flow.

In summary, A.O. Smith Corp. demonstrates varying levels of efficiency in managing its working capital through inventory, receivables, and payables, which can impact its overall liquidity and operational performance.

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 6.43 6.52 6.45 6.37 6.34 6.52 6.49 6.21 5.83 6.26 5.97 5.61 5.34 5.22 5.19 5.35 5.47 5.60 5.55 5.71
Total asset turnover 1.20 1.18 1.15 1.12 1.12 1.18 1.16 1.09 1.02 1.02 1.03 0.97 0.91 0.94 0.93 0.96 0.98 0.99 0.97 1.00

A.O. Smith Corp.'s fixed asset turnover ratio has been fairly consistent over the past quarters, ranging from 6.22 to 6.54. This indicates that the company generates an average of approximately $6.40 in sales for every $1 invested in fixed assets. A higher fixed asset turnover ratio suggests that the company is efficiently utilizing its fixed assets to generate revenue.

Meanwhile, the total asset turnover ratio has also been relatively stable, fluctuating between 1.09 and 1.20. This ratio signifies that, on average, the company generates $1.15 in sales for every $1 of total assets it holds. A higher total asset turnover ratio indicates that the company is efficiently using its total assets to generate sales revenue.

Overall, the consistent performance of both the fixed asset turnover and total asset turnover ratios implies that A.O. Smith Corp. is effectively managing its assets to drive sales growth and enhance operational efficiency.