Arrow Electronics Inc (ARW)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | 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 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Inventory turnover | 5.23 | 5.52 | 5.59 | 5.71 | 5.58 | 5.20 | 5.73 | 5.80 | 6.07 | 6.29 | 6.42 | 6.61 | 7.20 | 7.82 | 7.97 | 8.33 | 7.75 | 7.56 | 7.10 | 7.49 |
| Receivables turnover | 2.14 | 2.43 | 2.73 | 2.83 | 2.71 | 3.24 | 3.25 | — | 3.01 | — | — | — | 3.10 | — | — | — | — | — | — | — |
| Payables turnover | 2.23 | 2.66 | 2.96 | 3.06 | 2.88 | 3.32 | 3.48 | 3.57 | 3.09 | 3.35 | 3.42 | 3.37 | 3.15 | 3.75 | 3.80 | 3.87 | 3.21 | 3.57 | 3.49 | 3.75 |
| Working capital turnover | 4.84 | 5.13 | 5.45 | 5.65 | 6.44 | 6.44 | 5.55 | 5.68 | 6.24 | 6.44 | 6.69 | 6.67 | 7.55 | 8.03 | 8.14 | 7.72 | 7.13 | 7.36 | 7.48 | 7.66 |
The activity ratios of Arrow Electronics Inc provide insights into the efficiency of the company's operations.
1. Inventory Turnover: The inventory turnover ratio indicates how many times inventory is sold and replaced over a specific period. Arrow Electronics Inc's inventory turnover has shown a declining trend from 7.49 in March 2020 to 5.23 in December 2024. A lower turnover ratio may suggest overstocking or slow-moving inventory, while a higher ratio indicates efficient inventory management.
2. Receivables Turnover: The receivables turnover ratio measures how quickly a company collects payments from its customers. Arrow Electronics Inc started reporting receivables turnover from December 2021 onwards, with a steady increase from 3.10 in December 2021 to 2.14 in December 2024. A higher turnover ratio reflects effective credit and collection policies.
3. Payables Turnover: The payables turnover ratio shows how effectively a company manages its accounts payable. Arrow Electronics Inc's payables turnover ratio fluctuated over the years, ranging from 2.23 in December 2024 to 3.87 in March 2021. A lower ratio may indicate delayed payments to suppliers, while a higher ratio suggests efficient cash management.
4. Working Capital Turnover: The working capital turnover ratio assesses how efficiently a company utilizes its working capital to generate sales. Arrow Electronics Inc's working capital turnover ratio decreased from 7.66 in March 2020 to 4.84 in December 2024. A declining ratio indicates a decrease in sales generation relative to the investment in working capital.
In conclusion, analyzing Arrow Electronics Inc's activity ratios reveals trends in inventory management, receivables collection, payables management, and working capital efficiency over the years. Management should closely monitor these ratios to improve operational efficiency and financial performance.
Average number of days
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 69.79 | 66.10 | 65.35 | 63.90 | 65.38 | 70.13 | 63.65 | 62.94 | 60.13 | 58.00 | 56.90 | 55.25 | 50.66 | 46.68 | 45.78 | 43.82 | 47.09 | 48.27 | 51.38 | 48.73 |
| Days of sales outstanding (DSO) | days | 170.33 | 150.24 | 133.91 | 129.03 | 134.92 | 112.55 | 112.39 | — | 121.15 | — | — | — | 117.77 | — | — | — | — | — | — | — |
| Number of days of payables | days | 163.71 | 137.07 | 123.13 | 119.09 | 126.93 | 109.81 | 104.84 | 102.25 | 118.25 | 108.85 | 106.69 | 108.37 | 115.95 | 97.44 | 96.01 | 94.25 | 113.70 | 102.18 | 104.64 | 97.36 |
Based on the data provided for Arrow Electronics Inc, the Days of Inventory on Hand (DOH) has been increasing steadily over the years, indicating that the company is taking longer to sell its inventory. This could potentially lead to higher carrying costs and increased risk of obsolescence.
The Days of Sales Outstanding (DSO) fluctuates significantly over the periods, with some quarters showing no data while others displaying a substantial number of days. The increasing DSO over the years suggests that the company is taking longer to collect its accounts receivables, which could impact cash flow and liquidity.
In terms of the Number of Days of Payables, Arrow Electronics Inc seems to be extending its payment period to suppliers over the years. The trend of increasing days of payables might indicate a deliberate strategy to manage cash flow and working capital more effectively.
Overall, these activity ratios suggest that Arrow Electronics Inc may need to focus on improving its inventory management, speeding up collections from customers, and potentially optimizing its payment terms to enhance efficiency and financial performance.
Long-term
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | 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 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Fixed asset turnover | 59.51 | 57.73 | 59.38 | 60.52 | 62.38 | 64.49 | 64.20 | 63.49 | 62.24 | 61.79 | 57.65 | 53.43 | 50.49 | 48.08 | 44.86 | 41.04 | 35.86 | 34.71 | 34.33 | 35.03 |
| Total asset turnover | 1.28 | 1.36 | 1.48 | 1.54 | 1.52 | 1.68 | 1.75 | 1.81 | 1.71 | 1.80 | 1.81 | 1.80 | 1.76 | 1.95 | 1.94 | 1.90 | 1.68 | 1.78 | 1.76 | 1.83 |
The fixed asset turnover ratio for Arrow Electronics Inc has shown an increasing trend over the past few years, indicating the company's efficiency in generating sales relative to its investment in fixed assets. The ratio went from 35.03 in March 2020 to a peak of 64.49 in September 2023, before declining slightly to 59.51 by December 2024.
On the other hand, the total asset turnover ratio, which measures the efficiency of the company in using all its assets to generate sales, exhibited some fluctuations during the same period. It fluctuated between 1.28 in December 2024 to a high of 1.95 in September 2021. This suggests that Arrow Electronics Inc may have experienced varying levels of asset utilization efficiency over these years.
Overall, the fixed asset turnover ratio indicates that the company was able to relatively efficiently utilize its fixed assets to generate sales, while the total asset turnover ratio showed more variability in how well Arrow Electronics Inc utilized all its assets to generate revenue. The trends in these ratios suggest changes in the company's operational efficiency and effectiveness in utilizing its assets over time.