Armstrong World Industries Inc (AWI)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Inventory turnover | 15.38 | 14.56 | 13.05 | 15.05 | 13.59 |
| Receivables turnover | 10.74 | 11.24 | 10.95 | 10.06 | 11.66 |
| Payables turnover | 10.28 | 12.80 | 11.27 | 10.77 | 11.30 |
| Working capital turnover | 14.55 | 10.53 | 7.08 | 9.77 | 6.54 |
Armstrong World Industries Inc's activity ratios show varying trends over the years.
1. Inventory turnover: The company's inventory turnover has generally increased from 13.59 in 2020 to 15.38 in 2024. This suggests that the company is selling its inventory more efficiently, turning over its inventory at a faster rate.
2. Receivables turnover: The receivables turnover has fluctuated over the years, with a slight decrease from 11.66 in 2020 to 10.74 in 2024. This indicates that the company is collecting its receivables at a slightly slower pace.
3. Payables turnover: The payables turnover has shown some volatility, ranging from 10.28 in 2024 to 12.80 in 2023. A higher payables turnover ratio typically indicates that the company is taking longer to pay its suppliers.
4. Working capital turnover: The working capital turnover has shown a significant increase from 6.54 in 2020 to 14.55 in 2024. This indicates that the company is generating more revenue relative to its working capital, which can be a positive sign of efficiency.
Overall, Armstrong World Industries Inc's activity ratios suggest improvements in inventory management and working capital efficiency, while the trends in receivables and payables turnover indicate some variability in the company's collection and payment practices. Monitoring and analyzing these ratios can provide insights into the company's operational effectiveness and management of assets and liabilities.
Average number of days
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 23.74 | 25.06 | 27.97 | 24.25 | 26.86 |
| Days of sales outstanding (DSO) | days | 34.00 | 32.47 | 33.35 | 36.30 | 31.31 |
| Number of days of payables | days | 35.50 | 28.51 | 32.40 | 33.90 | 32.30 |
Armstrong World Industries Inc's activity ratios indicate the efficiency with which the company manages its inventory, receivables, and payables.
1. Days of Inventory on Hand (DOH): The company's DOH has shown a fluctuating trend over the years, ranging from 23.74 days to 27.97 days. A lower DOH is generally favorable as it implies faster inventory turnover, indicating efficient inventory management. Armstrong World Industries Inc has managed to reduce its DOH from 26.86 days in 2020 to 23.74 days in 2024, indicating improvement in managing inventory levels.
2. Days of Sales Outstanding (DSO): The DSO measures the average number of days it takes for the company to collect payment after a sale. Armstrong World Industries Inc's DSO has fluctuated between 31.31 days and 36.30 days over the years. Although there has been some variability, the company has maintained its DSO within a reasonable range. The increase in DSO from 2020 to 2021 suggests a potential inefficiency in collecting receivables, which improved slightly in the following years.
3. Number of Days of Payables: This ratio indicates how long it takes the company to pay off its suppliers. Armstrong World Industries Inc's payables days have ranged from 28.51 days to 35.50 days. The decrease in payables days from 2022 to 2023 suggests that the company has been paying its suppliers more quickly. A lower number of payables days may indicate stronger supplier relationships but could also mean a potential strain on cash flows.
Overall, Armstrong World Industries Inc should continue to focus on managing its inventory levels efficiently, improving receivables collection, and maintaining balanced relationships with suppliers to enhance its working capital management and overall financial performance.
Long-term
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Fixed asset turnover | 2.41 | 2.20 | 2.22 | 2.02 | 1.72 |
| Total asset turnover | 0.78 | 0.75 | 0.73 | 0.64 | 0.53 |
Armstrong World Industries Inc's long-term activity ratios show a positive trend over the years. The Fixed Asset Turnover ratio has been steadily increasing from 1.72 in 2020 to 2.41 in 2024. This indicates that the company is generating more sales from its fixed assets, reflecting improved operational efficiency and utilization of its long-term investments.
Similarly, the Total Asset Turnover ratio has also shown an upward trend, rising from 0.53 in 2020 to 0.78 in 2024. This indicates that Armstrong World Industries Inc has been able to generate more revenue relative to its total assets, showcasing efficient asset management and effective utilization of resources to drive sales.
Overall, the increasing trend in both Fixed Asset Turnover and Total Asset Turnover ratios demonstrates the company's ability to effectively leverage its long-term assets to drive sales and improve operational efficiency over the years.