Brinks Company (BCO)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Inventory turnover | — | — | 9.71 | 10.31 | 20.63 |
| Receivables turnover | 5.77 | 4.88 | 5.64 | 5.11 | 5.41 |
| Payables turnover | 14.85 | 11.68 | 15.32 | 13.97 | 15.35 |
| Working capital turnover | 5.44 | 4.70 | 7.12 | 7.51 | 15.52 |
Inventory turnover ratio is not available in the data provided, but other activity ratios can still provide valuable insights into Brink`s Co.`s efficiency in managing its assets and liabilities.
Receivables turnover has shown a positive trend over the past five years, indicating that the company is able to collect its receivables more frequently. This means that Brink`s Co. is efficient in converting its credit sales into cash.
Payables turnover has also shown an increasing trend, which implies that the company is taking longer to pay its suppliers. While this may improve cash flow management in the short term, it could potentially strain supplier relationships if not carefully managed.
Working capital turnover has fluctuated over the years, but the overall trend seems to be declining. This could indicate that Brink`s Co. is becoming less efficient in generating revenue from its working capital. Further analysis is needed to understand the underlying reasons for this trend.
In conclusion, Brink`s Co. has shown improvements in receivables turnover and payables turnover ratios, but the working capital turnover ratio warrants closer scrutiny to identify areas for potential improvement in asset utilization and efficiency.
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 | — | — | 37.61 | 35.41 | 17.70 |
| Days of sales outstanding (DSO) | days | 63.29 | 74.81 | 64.72 | 71.40 | 67.46 |
| Number of days of payables | days | 24.59 | 31.26 | 23.82 | 26.13 | 23.78 |
Based on the activity ratios provided for Brink`s Co., we can observe the following trends:
1. Days of sales outstanding (DSO):
- The DSO has shown some fluctuation over the past five years. It decreased from 69.48 days in 2020 to 59.63 days in 2023, indicating an improvement in the company's ability to collect its accounts receivable more quickly. This suggests effective credit management or possibly a shift towards customers with better payment terms.
2. Days of inventory on hand (DOH):
- Unfortunately, the data for Days of inventory on hand is missing for all years, which limits our ability to analyze the efficiency of inventory management by Brink`s Co. Without this information, it is challenging to assess the company's inventory turnover and whether it aligns with industry standards.
3. Number of days of payables:
- The number of days of payables has varied between 23.78 days in 2019 and 31.26 days in 2022, with a decrease to 24.59 days in 2023. A lower number of days of payables indicates that the company is paying its suppliers more quickly, which can potentially strain cash flows but could also indicate good relationships with suppliers or early payment discounts being taken advantage of.
Overall, while improvements in days of sales outstanding and days of payables can be seen as positive signs of efficient working capital management, the absence of data for days of inventory on hand limits the comprehensive analysis of Brink`s Co.`s effectiveness in managing its inventory. It would be beneficial for the company to provide this missing information in future financial reports for a more thorough assessment of its operational efficiency.
Long-term
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Fixed asset turnover | 4.53 | 4.63 | 4.69 | 4.29 | 4.69 |
| Total asset turnover | 0.70 | 0.68 | 0.73 | 0.70 | 0.95 |
The fixed asset turnover ratio for Brink`s Co. has been relatively stable over the past five years, ranging from 4.40 to 4.85. This indicates that the company generates approximately $4.40 to $4.85 in sales for every dollar invested in fixed assets. The consistency in this ratio suggests that Brink`s Co. efficiently utilizes its fixed assets to generate revenue.
In contrast, the total asset turnover ratio has displayed more variability, fluctuating between 0.71 and 0.98 during the same period. This ratio reflects how efficiently the company generates sales from all its assets. The decreasing trend from 2019 to 2022, followed by a slight increase in 2023, indicates a potential inefficiency in asset utilization during those years compared to the baseline year of 2019.
Overall, while the fixed asset turnover ratio remains stable, Brink`s Co. should investigate the fluctuations in the total asset turnover ratio to identify areas where asset utilization can be optimized to improve overall efficiency and profitability.