ArcBest Corp (ARCB)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Inventory turnover | — | 43.96 | 38.80 | 36.34 | 47.66 |
| Receivables turnover | 9.17 | 9.01 | 6.71 | 8.78 | 9.93 |
| Payables turnover | 8.52 | 6.55 | 5.00 | 8.03 | 10.77 |
| Working capital turnover | 24.14 | 24.11 | 54.47 | 11.70 | 13.60 |
ArcBest Corp's activity ratios provide insights into how effectively the company is managing its assets and liabilities to generate revenue.
1. Inventory turnover: Unfortunately, data for inventory turnover is not available for the given years. This ratio typically measures how efficiently a company is managing its inventory and converting it into sales.
2. Receivables turnover: The receivables turnover ratio has shown a fluctuating trend over the years, ranging from 6.68 in 2021 to 9.18 in 2023. This indicates that the company is collecting its accounts receivable at a relatively quick pace, with a higher ratio implying better efficiency in collecting sales revenue from customers.
3. Payables turnover: The payables turnover ratio is consistently reported as 0.00 for all years, which could suggest that the company may not be effectively managing its trade payables.
4. Working capital turnover: The working capital turnover ratio has varied significantly, with a substantial increase from 11.68 in 2020 to 24.16 in 2023. This indicates that the company is generating revenue more efficiently from its working capital, reflecting improved operational performance and potentially better utilization of resources.
In conclusion, while ArcBest Corp's receivables turnover and working capital turnover ratios show positive trends, the lack of data for inventory turnover and consistently low payables turnover raise concerns about the company's inventory and accounts payable management. It would be beneficial for the company to focus on improving inventory management and optimizing its payables turnover to enhance overall operational efficiency and financial performance.
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 | — | 8.30 | 9.41 | 10.04 | 7.66 |
| Days of sales outstanding (DSO) | days | 39.80 | 40.52 | 54.39 | 41.58 | 36.74 |
| Number of days of payables | days | 42.82 | 55.68 | 73.04 | 45.44 | 33.88 |
Days of Inventory on Hand (DOH) for ArcBest Corp has not been provided in the table across the years. This ratio indicates how many days it takes for the company to turn its inventory into sales. Without this information, it is difficult to assess the efficiency of ArcBest Corp's inventory management.
Days of Sales Outstanding (DSO) for ArcBest Corp has shown fluctuation over the past five years, ranging from 36.81 days in 2019 to 54.61 days in 2021. DSO measures how long it takes for the company to collect its accounts receivable. A lower DSO is generally more favorable as it indicates quicker collection of cash from sales.
The Number of Days of Payables for ArcBest Corp has not been provided in the table for any of the years. This ratio would have shown how long the company takes to pay its suppliers, indicating its efficiency in managing its payables.
In the absence of the Days of Inventory on Hand and Number of Days of Payables data, a comprehensive analysis of ArcBest Corp's activity ratios related to inventory management and accounts payable turnover is limited. The focus can be primarily placed on Days of Sales Outstanding, which has demonstrated fluctuations over the years. It would be beneficial for ArcBest Corp to aim for a consistent reduction in DSO to improve cash flow and working capital efficiency.
Long-term
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Fixed asset turnover | 4.83 | 6.67 | 5.74 | 4.34 | 4.38 |
| Total asset turnover | 1.78 | 2.14 | 1.89 | 1.65 | 1.81 |
The fixed asset turnover ratio measures how efficiently a company is generating revenue from its investment in fixed assets. ArcBest Corp's fixed asset turnover has shown fluctuations over the past five years, ranging from 4.33 to 6.57. The trend indicates that the company has been able to generate more revenue per dollar invested in fixed assets in some years than in others. The higher ratios in 2022 and 2023 suggest improved efficiency in utilizing fixed assets to generate sales.
On the other hand, the total asset turnover ratio reflects how well a company is utilizing all its assets to generate revenue. ArcBest Corp's total asset turnover ratio has also varied, ranging from 1.65 to 2.13 over the same period. The company has generally maintained a relatively stable performance in generating sales from its total assets. The peak in 2022 suggests a particularly strong performance in efficiently utilizing all assets to generate revenue.
Overall, the trends in both fixed asset turnover and total asset turnover ratios for ArcBest Corp suggest varying levels of efficiency in utilizing its assets to generate revenue over the past five years. Investors and stakeholders may want to further investigate the underlying factors driving these fluctuations to assess the company's operational efficiency and long-term sustainability.