American Axle & Manufacturing (AXL)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Inventory turnover | 12.17 | 11.30 | 10.99 | 10.80 | 12.77 |
| Receivables turnover | — | — | — | — | — |
| Payables turnover | — | — | — | — | — |
| Working capital turnover | 8.28 | 7.55 | 7.31 | 6.32 | 5.25 |
Based on the provided data, let's analyze the activity ratios of American Axle & Manufacturing:
1. Inventory Turnover:
- The inventory turnover ratio indicates how efficiently the company manages its inventory.
- The ratio has shown a slight fluctuation over the years but remains relatively stable.
- In 2020, the inventory turnover was 12.77, which means the company sold and replaced its inventory approximately 12.77 times during the year.
- The ratio decreased to 10.80 in 2021 but has been gradually increasing since then, reaching 12.17 in 2024.
- Overall, a higher inventory turnover ratio indicates better inventory management and faster sales.
2. Receivables Turnover:
- The data provided does not include information on the receivables turnover ratio, indicating that the company may not disclose this metric or have negligible accounts receivable turnover.
- Receivables turnover ratio reflects how efficiently the company collects on credit sales, and a higher ratio is generally favorable.
3. Payables Turnover:
- Similar to receivables turnover, the payables turnover data is also not available in the provided information.
- Payables turnover ratio typically indicates how quickly a company pays its suppliers, and a higher ratio is usually more favorable.
4. Working Capital Turnover:
- The working capital turnover ratio assesses how effectively the company utilizes its working capital to generate revenue.
- The ratio has shown a consistent increasing trend over the years, from 5.25 in 2020 to 8.28 in 2024.
- This indicates that American Axle & Manufacturing is making more revenue per dollar of working capital employed, which suggests improved efficiency in capital utilization.
In conclusion, the analysis of American Axle & Manufacturing's activity ratios suggests relatively efficient inventory management and increasing effectiveness in utilizing working capital. However, further information on receivables and payables turnover would provide a more comprehensive insight into the company's overall operating efficiency and cash flow management.
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 | 30.00 | 32.31 | 33.22 | 33.78 | 28.58 |
| Days of sales outstanding (DSO) | days | — | — | — | — | — |
| Number of days of payables | days | — | — | — | — | — |
Days of Inventory on Hand (DOH):
- The Days of Inventory on Hand (DOH) measures how many days, on average, a company holds its inventory before selling it.
- American Axle & Manufacturing's DOH has been gradually increasing from 28.58 days as of December 31, 2020, to 30.00 days as of December 31, 2024.
- The increasing trend indicates that the company is taking a longer time to sell its inventory, which could tie up capital and impact cash flow.
Days of Sales Outstanding (DSO):
- Unfortunately, there is no data provided for the Days of Sales Outstanding (DSO), which typically measures how long it takes for a company to collect cash from its credit sales.
- Without this information, it is challenging to assess American Axle & Manufacturing's efficiency in collecting receivables.
Number of Days of Payables:
- Similarly, information on the Number of Days of Payables is not available, preventing an evaluation of how long the company takes to pay its suppliers.
- The Number of Days of Payables metric is essential as it reflects the company's relationship with its suppliers and its ability to manage working capital effectively.
In conclusion, while the Days of Inventory on Hand (DOH) has shown an increasing trend for American Axle & Manufacturing, the absence of data on Days of Sales Outstanding (DSO) and Number of Days of Payables limits a comprehensive analysis of the company's overall efficiency in managing its operating cycle.
Long-term
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Fixed asset turnover | — | — | 3.05 | 2.58 | 2.18 |
| Total asset turnover | 1.21 | 1.14 | 1.06 | 0.91 | 0.80 |
American Axle & Manufacturing's fixed asset turnover has been showing an improving trend over the years, with ratios of 2.18 in 2020, 2.58 in 2021, and 3.05 in 2022. This indicates that the company generated $3.05 in sales for every dollar invested in fixed assets in 2022, reflecting efficient utilization of these assets to generate revenue.
However, the data shows that there are missing values for 2023 and 2024, which may indicate incomplete information or a change in reporting practices.
In terms of total asset turnover, the company's efficiency in utilizing all its assets to generate sales has also been on an upward trajectory, with ratios of 0.80 in 2020, 0.91 in 2021, 1.06 in 2022, 1.14 in 2023, and 1.21 in 2024. This indicates that American Axle & Manufacturing generated $1.21 in sales for every dollar invested in assets in 2024, demonstrating an improvement in overall asset efficiency.
Overall, the trend in both fixed asset turnover and total asset turnover ratios suggests an increasing efficiency in generating sales relative to the level of fixed and total assets employed by the company, pointing towards improved operational performance and asset utilization in recent years.