Armstrong World Industries Inc (AWI)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2024 | Sep 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 | Dec 31, 2019 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Inventory turnover | 19.04 | 13.42 | 14.23 | 14.49 | 13.54 | 13.27 | 12.78 | 12.98 | 12.21 | 12.71 | 13.03 | 14.86 | 13.86 | 14.39 | 13.78 | 13.45 | 13.80 | 14.56 | 16.28 | 16.48 |
| Receivables turnover | 10.12 | 10.23 | 10.08 | 11.24 | 10.93 | 10.73 | 10.29 | 10.95 | 10.06 | 8.99 | 9.89 | 10.06 | 10.11 | 10.70 | 10.04 | 11.66 | 10.63 | 9.21 | 10.82 | 12.20 |
| Payables turnover | 12.74 | 10.88 | 13.27 | 12.74 | 12.14 | 11.98 | 12.55 | 11.20 | 10.83 | 10.44 | 11.59 | 10.63 | 10.75 | 11.35 | 12.10 | 11.19 | 13.32 | 14.99 | 14.91 | 12.63 |
| Working capital turnover | 13.71 | 9.61 | 8.64 | 10.53 | 7.77 | 6.78 | 6.41 | 7.08 | 8.62 | 8.52 | 9.01 | 9.77 | 8.97 | 7.11 | 5.73 | 6.54 | 5.02 | 6.03 | 5.97 | 11.64 |
Armstrong World Industries Inc's activity ratios provide insights into the efficiency of the company's operations in managing its assets and generating revenue. Let's analyze the key activity ratios:
1. Inventory Turnover:
The inventory turnover ratio measures how efficiently the company manages its inventory. The decreasing trend in inventory turnover from 16.48 in December 2019 to 19.04 in December 2024 indicates that the company is taking longer to sell its inventory, which may lead to higher carrying costs or obsolete inventory.
2. Receivables Turnover:
The receivables turnover ratio reflects how quickly the company collects payments from its customers. The fluctuating trend in receivables turnover from 12.20 in December 2019 to 10.12 in December 2024 suggests a mixed performance in collecting receivables. A lower turnover ratio may indicate potential issues with credit policies or difficulties in collecting payments.
3. Payables Turnover:
The payables turnover ratio evaluates how efficiently the company pays its suppliers. The declining trend in payables turnover from 12.63 in December 2019 to 12.74 in December 2024 indicates that the company is taking longer to pay its suppliers. This may have implications on supplier relationships or negotiating better credit terms.
4. Working Capital Turnover:
The working capital turnover ratio measures how effectively the company utilizes its working capital to generate revenue. The varying trend in working capital turnover from 11.64 in December 2019 to 13.71 in December 2024 indicates fluctuations in the company's ability to generate revenue relative to its working capital. A higher turnover ratio suggests better utilization of working capital.
Overall, Armstrong World Industries Inc's activity ratios reflect mixed efficiency in managing inventory, collecting receivables, paying suppliers, and utilizing working capital. Further analysis and monitoring of these ratios can help identify areas for operational improvement and enhance overall efficiency in the company's activity management.
Average number of days
| Dec 31, 2024 | Sep 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 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 19.17 | 27.21 | 25.64 | 25.19 | 26.95 | 27.50 | 28.56 | 28.13 | 29.88 | 28.72 | 28.02 | 24.57 | 26.34 | 25.37 | 26.48 | 27.13 | 26.44 | 25.06 | 22.42 | 22.15 |
| Days of sales outstanding (DSO) | days | 36.06 | 35.69 | 36.22 | 32.47 | 33.39 | 34.02 | 35.47 | 33.35 | 36.28 | 40.58 | 36.91 | 36.30 | 36.11 | 34.11 | 36.34 | 31.31 | 34.33 | 39.65 | 33.74 | 29.92 |
| Number of days of payables | days | 28.66 | 33.54 | 27.50 | 28.65 | 30.07 | 30.47 | 29.09 | 32.58 | 33.70 | 34.95 | 31.50 | 34.35 | 33.95 | 32.15 | 30.17 | 32.62 | 27.40 | 24.35 | 24.48 | 28.91 |
The activity ratios of Armstrong World Industries Inc provide insight into the company's efficiency in managing its inventory, collecting receivables, and paying its payables.
1. Days of Inventory on Hand (DOH):
- The trend in DOH indicates how many days it takes for the company to turn its inventory into sales.
- Armstrong World Industries Inc's DOH increased from 22.15 days on December 31, 2019, to 27.21 days on September 30, 2024, suggesting a gradual slowdown in inventory turnover.
- A lower DOH is generally more favorable as it implies faster inventory turnover and less carrying costs for the company.
2. Days of Sales Outstanding (DSO):
- DSO measures how long it takes for the company to collect its accounts receivable from customers.
- The DSO of Armstrong World Industries Inc ranged from 29.92 days on December 31, 2019, to 36.22 days on March 31, 2024.
- A higher DSO indicates a longer time to collect receivables, which may lead to cash flow issues for the company.
3. Number of Days of Payables:
- This ratio reflects how long it takes for the company to pay its suppliers and vendors.
- Armstrong World Industries Inc's payables days varied from 24.35 days on June 30, 2020, to 33.54 days on September 30, 2024.
- A higher number of days of payables may suggest that the company is taking longer to settle its obligations, potentially indicating cash flow advantages but also potentially straining supplier relations.
Overall, monitoring these activity ratios is crucial for assessing Armstrong World Industries Inc's operational efficiency, cash flow management, and relationships with suppliers and customers. It is important for the company to strike a balance between inventory management, receivables collection, and payables turnover to optimize its working capital and overall financial health.
Long-term
| Dec 31, 2024 | Sep 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 | Dec 31, 2019 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Fixed asset turnover | 2.27 | 2.32 | 2.26 | 2.20 | 2.28 | 2.25 | 2.24 | 2.22 | 2.22 | 2.17 | 2.09 | 2.02 | 1.97 | 1.88 | 1.75 | 1.72 | 1.86 | 1.91 | 2.01 | 1.98 |
| Total asset turnover | 0.74 | 0.74 | 0.75 | 0.75 | 0.74 | 0.73 | 0.74 | 0.73 | 0.69 | 0.67 | 0.66 | 0.64 | 0.61 | 0.58 | 0.53 | 0.53 | 0.59 | 0.64 | 0.66 | 0.70 |
Armstrong World Industries Inc's long-term activity ratios show a positive trend in terms of efficiency and productivity. The fixed asset turnover ratio has been steadily increasing from 1.98 in December 2019 to 2.27 in December 2024. This indicates that the company is generating more revenue for each dollar invested in fixed assets, reflecting improved efficiency in asset utilization over the years.
Similarly, the total asset turnover ratio has shown a consistent improvement, moving from 0.70 in December 2019 to 0.74 in December 2024. This suggests that Armstrong World Industries Inc is effectively utilizing its total assets to generate sales, indicating enhanced operational efficiency and productivity.
Overall, the increasing trend in both fixed asset turnover and total asset turnover ratios indicates that Armstrong World Industries Inc has been successful in optimizing its asset utilization and improving operational efficiency over the years, which could positively impact its profitability and long-term financial performance.