BorgWarner Inc (BWA)
Activity ratios
Short-term
Turnover ratios
| 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 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Inventory turnover | 11.14 | 11.40 | 8.30 | 8.23 | 11.92 | 8.22 | 7.93 | 7.93 | 8.65 | 8.61 | 8.48 | 8.35 | 7.32 | 9.29 | 8.74 | 9.27 | 10.00 | 9.98 | 9.89 | 10.10 |
| Receivables turnover | 5.09 | 4.92 | 4.37 | 4.51 | 6.40 | 4.56 | 4.69 | 4.66 | 5.13 | 5.24 | 4.65 | 3.78 | 3.48 | 4.45 | 5.70 | 5.70 | 5.29 | 5.14 | 4.93 | 4.99 |
| Payables turnover | — | — | — | — | 5.40 | — | — | — | 5.83 | — | — | — | — | — | — | — | 6.09 | — | — | — |
| Working capital turnover | 6.46 | 7.08 | 6.38 | 6.54 | 6.64 | 5.61 | 5.20 | 5.30 | 5.32 | 5.36 | 5.33 | 4.47 | 4.32 | 2.97 | 3.28 | 6.11 | 6.75 | 6.97 | 6.62 | 7.26 |
Inventory turnover measures how efficiently BorgWarner Inc is managing its inventory. The trend over the past eight quarters shows some fluctuations, ranging from a low of 7.23 in Q1 2023 to a high of 10.04 in Q3 2023. On average, BorgWarner turned over its inventory approximately 7.85 times in the past year. A higher inventory turnover indicates that the company is selling its products quickly and efficiently.
Receivables turnover reflects how well BorgWarner is collecting on its credit sales. The data shows some variability, with a range from 4.37 in Q2 2023 to 4.90 in Q3 2023. On average, BorgWarner converted its receivables into cash around 4.60 times in the past year. A higher receivables turnover indicates that the company is efficiently collecting payments from customers.
Payables turnover measures how often BorgWarner pays its suppliers. The ratio has fluctuated over the quarters, with a range from 4.57 in Q4 2023 to 5.56 in Q3 2023. On average, the company paid its suppliers approximately 5 times in the past year. A higher payables turnover suggests that BorgWarner is effectively managing its accounts payable.
Working capital turnover indicates how efficiently BorgWarner is utilizing its working capital to generate sales. The trend shows some variability, with turnovers ranging from 5.20 in Q2 2022 to 7.06 in Q3 2023. On average, the company generated sales around 6.13 times for each dollar of working capital in the past year. A higher working capital turnover ratio suggests that BorgWarner is utilizing its resources effectively to drive sales growth.
Average number of days
| 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 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 32.76 | 32.01 | 43.98 | 44.36 | 30.62 | 44.38 | 46.02 | 46.04 | 42.18 | 42.39 | 43.04 | 43.70 | 49.84 | 39.28 | 41.78 | 39.37 | 36.51 | 36.58 | 36.92 | 36.12 |
| Days of sales outstanding (DSO) | days | 71.71 | 74.20 | 83.54 | 80.93 | 57.07 | 80.13 | 77.79 | 78.35 | 71.10 | 69.67 | 78.41 | 96.68 | 104.75 | 81.97 | 63.98 | 64.09 | 68.96 | 71.08 | 74.05 | 73.09 |
| Number of days of payables | days | — | — | — | — | 67.54 | — | — | — | 62.58 | — | — | — | — | — | — | — | 59.95 | — | — | — |
Days of inventory on hand (DOH) measures how many days it takes for the company to turn its inventory into sales. BorgWarner's DOH has been fluctuating over the past eight quarters, with a range from 36.37 days to 50.52 days. A lower DOH indicates efficient inventory management, so the recent decrease from 50.52 days in Q1 2023 to 41.21 days in Q4 2023 is a positive sign.
Days of sales outstanding (DSO) indicates the average number of days it takes for the company to collect payment after making a sale. BorgWarner's DSO has also varied over the quarters, ranging from 74.44 days to 83.44 days. The recent decrease in DSO from 83.44 days in Q2 2023 to 79.93 days in Q4 2023 suggests an improvement in the company's collection efficiency.
Number of days of payables shows how long a company takes to pay its suppliers. BorgWarner's days of payables have been relatively stable but have varied between 65.62 days and 79.90 days. A longer number of days of payables can indicate effective cash management. The increase in days of payables from 65.62 days in Q3 2023 to 79.90 days in Q4 2023 could signify a change in the company's payment strategy.
Overall, BorgWarner's activity ratios suggest improvements in inventory management and collection efficiency, while also potentially reflecting adjustments in the company's payment practices. Keep in mind that these ratios should be considered along with other financial ratios and qualitative factors to get a complete picture of the company's operational performance.
Long-term
| 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 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Fixed asset turnover | 4.21 | 4.62 | 3.76 | 3.60 | 4.63 | 3.82 | 3.54 | 3.40 | 3.39 | 3.44 | 3.14 | 2.68 | 2.22 | 3.12 | 3.15 | 3.48 | 3.48 | 3.62 | 3.52 | 3.56 |
| Total asset turnover | 1.09 | 1.17 | 0.97 | 0.94 | 0.93 | 0.95 | 0.91 | 0.88 | 0.90 | 0.92 | 0.85 | 0.75 | 0.63 | 0.81 | 0.85 | 1.04 | 1.05 | 1.00 | 0.99 | 1.02 |
The fixed asset turnover ratio for BorgWarner Inc has shown fluctuation over the past eight quarters, ranging from a low of 3.39 in Q1 2022 to a peak of 4.60 in Q3 2023. This ratio measures the efficiency of the company in generating sales revenue from its fixed assets. A higher fixed asset turnover ratio indicates that the company is utilizing its fixed assets more efficiently to generate sales.
On the other hand, the total asset turnover ratio has also varied during the same period, with values ranging from 0.88 in Q1 2022 to 1.16 in Q3 2023. This ratio reflects how well the company is utilizing all its assets to generate revenue. A higher total asset turnover ratio suggests that the company is generating more sales relative to its total assets.
Overall, the upward trend in both fixed asset turnover and total asset turnover ratios indicates that BorgWarner Inc has been improving its operational efficiency in utilizing both fixed and total assets to generate sales revenue over the past few quarters. This trend suggests that the company is effectively managing its assets and maximizing their contribution to overall revenue generation.