Peabody Energy Corp (BTU)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Inventory turnover | 1.89 | 2.25 | 2.04 | 7.52 | 2.63 |
| Receivables turnover | 15.35 | 11.97 | 10.81 | 15.93 | 16.33 |
| Payables turnover | 2.41 | 2.76 | 2.29 | 13.45 | 3.42 |
| Working capital turnover | 4.75 | 3.43 | 3.81 | 4.58 | 7.24 |
Peabody Energy Corp's activity ratios reflect how efficiently the company is managing its inventory, receivables, payables, and working capital over the past five years.
1. Inventory turnover: The inventory turnover ratio has fluctuated over the years, with a significant decrease in 2020 followed by a modest increase in 2021 and 2022. However, the ratio remains relatively low compared to 2019, indicating that the company is taking longer to sell its inventory.
2. Receivables turnover: The receivables turnover ratio shows a generally increasing trend, suggesting that Peabody Energy is collecting its receivables more efficiently over time. The company has been able to convert its accounts receivable into cash at a faster rate, which is a positive sign for liquidity.
3. Payables turnover: The payables turnover ratio has varied significantly, with a sharp decrease in 2020 and a subsequent recovery in 2021 and 2022. The ratio remains lower than in 2019, indicating that the company is taking longer to pay its suppliers.
4. Working capital turnover: The working capital turnover ratio has been inconsistent over the years, with fluctuations in efficiency in utilizing working capital. The ratio peaked in 2019 and has since declined, indicating a decrease in the company's ability to generate revenue relative to its working capital.
Overall, the analysis of Peabody Energy Corp's activity ratios suggests that the company may need to focus on improving inventory management and working capital utilization to enhance its operational efficiency going forward.
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 | 193.59 | 162.57 | 179.22 | 48.52 | 138.90 |
| Days of sales outstanding (DSO) | days | 23.78 | 30.50 | 33.77 | 22.92 | 22.35 |
| Number of days of payables | days | 151.77 | 132.15 | 159.46 | 27.14 | 106.76 |
Peabody Energy Corp's activity ratios indicate the efficiency of the company in managing its inventory, receivables, and payables over the past five years.
1. Days of Inventory on Hand (DOH):
- The trend in DOH shows fluctuations over the years, ranging from a low of 48.52 days in 2020 to a high of 193.59 days in 2023.
- A higher DOH suggests slower inventory turnover, indicating either excess inventory levels or potential inefficiencies in inventory management.
- The significant increase in 2023 compared to prior years could signal a buildup of inventory, which may lead to increased holding costs and potential obsolescence risk.
2. Days of Sales Outstanding (DSO):
- The DSO measures the average number of days it takes for the company to collect revenue after making a sale.
- Peabody Energy's DSO has varied between 22.35 days in 2019 and 33.77 days in 2021, with a slight decrease to 23.78 days in 2023.
- A lower DSO is generally favorable as it signifies quicker cash conversion from sales, but erratic movements in DSO can indicate changes in customer payment behavior or credit policies.
3. Number of Days of Payables:
- Peabody Energy's days of payables have been volatile, with a range from 27.14 days in 2020 to 159.46 days in 2021.
- A higher number of days of payables suggests that the company is taking longer to settle its outstanding payables, which can provide a source of short-term financing but may strain supplier relationships if extended too far.
- The significant increase in 2021 compared to 2020 could indicate changes in payment terms with suppliers or cash flow management strategies.
Overall, analyzing these activity ratios together can offer insights into Peabody Energy Corp's operational efficiency and working capital management practices over the years, highlighting areas that may require further attention or optimization.
Long-term
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Fixed asset turnover | 1.74 | 1.74 | 1.12 | 0.94 | 0.99 |
| Total asset turnover | 0.83 | 0.89 | 0.67 | 0.62 | 0.71 |
Peabody Energy Corp's fixed asset turnover ratio has shown a stable trend over the past five years, with the ratio remaining around 1.74 in both 2023 and 2022. This indicates that the company generated $1.74 in revenue for every dollar invested in fixed assets during these years. The improvement in the fixed asset turnover ratio from 2021 to 2022 suggests that the company effectively utilized its fixed assets to generate sales.
In terms of total asset turnover, Peabody Energy Corp's performance has fluctuated over the same period. The ratio decreased from 0.71 in 2019 to 0.62 in 2020 before gradually increasing to 0.83 in 2023. This suggests that the company's efficiency in generating sales revenue relative to its total assets has improved in recent years.
Overall, while Peabody Energy Corp has shown some variability in its total asset turnover ratio, its stable fixed asset turnover ratio indicates efficient utilization of fixed assets for revenue generation. This suggests that the company has managed its assets effectively to drive sales growth and enhance overall operational efficiency.