American Axle & Manufacturing (AXL)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Inventory turnover | 11.30 | 10.99 | 10.80 | 12.77 | 15.07 |
| Receivables turnover | 7.43 | 7.07 | 6.76 | 5.94 | 8.01 |
| Payables turnover | 7.05 | 6.94 | 7.24 | 7.13 | 9.03 |
| Working capital turnover | 7.55 | 7.31 | 6.32 | 5.25 | 7.86 |
American Axle & Manufacturing Holdings Inc's activity ratios provide insight into how efficiently the company manages its assets and liabilities.
- Inventory Turnover: The inventory turnover ratio has been relatively stable over the years, ranging from 10.80 to 15.07. This indicates that the company efficiently sells its inventory, with a higher turnover generally being preferable as it signifies faster sales.
- Receivables Turnover: The receivables turnover ratio has also shown consistency, with a range of 5.94 to 8.01. This indicates that the company collects its accounts receivable in a timely manner, with a higher turnover being indicative of a shorter collection period.
- Payables Turnover: The payables turnover ratio has been relatively stable, ranging from 6.94 to 9.03. This suggests that the company pays its suppliers within a reasonable timeframe, with a higher turnover indicating quicker payment cycles.
- Working Capital Turnover: The working capital turnover ratio reflects how efficiently the company generates sales relative to its working capital. The company has shown consistency in this ratio, with a range of 5.25 to 7.86. A higher turnover ratio signifies that the company is effectively utilizing its working capital to generate sales.
Overall, American Axle & Manufacturing Holdings Inc's activity ratios indicate a good level of efficiency in managing its inventory, receivables, payables, and working capital over the years. The company's ability to maintain stable ratios suggests effective management of its operating cycle and a focus on optimizing its resources for sales generation.
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 | 32.31 | 33.22 | 33.78 | 28.58 | 24.23 |
| Days of sales outstanding (DSO) | days | 49.14 | 51.59 | 53.99 | 61.46 | 45.57 |
| Number of days of payables | days | 51.78 | 52.56 | 50.45 | 51.19 | 40.43 |
The Days of Inventory on Hand (DOH) ratio for American Axle & Manufacturing Holdings Inc has been increasing over the past five years, from 24.23 days in 2019 to 32.31 days in 2023. This indicates that the company is taking longer to sell its inventory, which could potentially lead to higher carrying costs and a reduced ability to generate cash from sales.
The Days of Sales Outstanding (DSO) ratio has also shown an increasing trend, rising from 45.57 days in 2019 to 49.14 days in 2023. This suggests that the company is taking longer to collect payments from its customers, which may impact its liquidity and working capital management.
On the other hand, the Number of Days of Payables ratio has fluctuated over the years but has generally remained within a narrow range. It increased from 40.43 days in 2019 to 51.78 days in 2023. A higher number of days of payables indicates that the company is taking longer to pay its suppliers, which could be a strategy to preserve cash or negotiate more favorable payment terms.
Overall, the activity ratios of American Axle & Manufacturing Holdings Inc indicate potential inefficiencies in inventory management and accounts receivables collection, which could impact the company's overall financial performance and liquidity position. The company may need to focus on improving its inventory turnover, collections from customers, and payments to suppliers to enhance its working capital management.
Long-term
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Fixed asset turnover | 3.45 | 3.05 | 2.58 | 2.18 | 2.77 |
| Total asset turnover | 1.14 | 1.06 | 0.91 | 0.80 | 0.98 |
American Axle & Manufacturing Holdings Inc has exhibited consistent improvement in its fixed asset turnover ratio over the past five years, indicating the company's ability to generate revenue from its fixed assets efficiently. The ratio has increased from 2.77 in 2019 to 3.45 in 2023, which suggests that the company has been utilizing its fixed assets more effectively to drive sales.
Similarly, the total asset turnover ratio has also shown an upward trend over the same period, moving from 0.98 in 2019 to 1.14 in 2023. This improvement indicates that American Axle & Manufacturing Holdings Inc has been able to generate more revenue from its total assets, including fixed and current assets, which is a positive sign of operational efficiency.
Overall, the increasing trend in both fixed asset turnover and total asset turnover ratios reflects the company's growing efficiency in utilizing its assets to generate sales, which could potentially lead to higher profitability and shareholder value in the future.