CF Industries Holdings Inc (CF)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Inventory turnover | 12.36 | 13.67 | 11.23 | 10.17 | 11.58 |
| Receivables turnover | — | — | — | — | — |
| Payables turnover | — | — | — | — | — |
| Working capital turnover | 3.49 | 2.95 | 4.18 | 5.63 | 8.95 |
Based on the provided data for CF Industries Holdings Inc, let's analyze the activity ratios:
1. Inventory Turnover: This ratio indicates the number of times a company sells and replaces its inventory during a specific period. CF Industries Holdings Inc's inventory turnover has fluctuated over the years but generally remained relatively high, ranging from 10.17 to 13.67. A higher inventory turnover suggests efficient inventory management and faster sales of inventory.
2. Receivables Turnover: Unfortunately, there is no data available for receivables turnover, which would typically indicate how efficiently the company is collecting on its credit sales. The absence of this data makes it challenging to evaluate CF Industries Holdings Inc's effectiveness in collecting outstanding receivables.
3. Payables Turnover: Similarly, information on payables turnover is missing, which would typically show how many times a company pays off its accounts payable during a period. Without this data, it is difficult to assess the company's payment practices and liquidity management.
4. Working Capital Turnover: This ratio measures how effectively a company is using its working capital to generate revenue. CF Industries Holdings Inc's working capital turnover has shown a declining trend from 8.95 to 3.49 over the years. A decreasing trend may indicate inefficiencies in utilizing working capital to support revenue generation.
Overall, CF Industries Holdings Inc appears to be managing its inventory efficiently, but the lack of data on receivables and payables turnover limits a comprehensive assessment of its overall activity ratios. The decreasing trend in working capital turnover warrants further investigation into the company's working capital management strategies.
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 | 29.54 | 26.71 | 32.49 | 35.88 | 31.52 |
| Days of sales outstanding (DSO) | days | — | — | — | — | — |
| Number of days of payables | days | — | — | — | — | — |
CF Industries Holdings Inc's Days of Inventory on Hand (DOH) increased from 31.52 days as of December 31, 2020, to 35.88 days as of December 31, 2021, before decreasing to 32.49 days by December 31, 2022. There was a further decrease in the DOH to 26.71 days as of December 31, 2023, followed by a slight increase to 29.54 days by December 31, 2024.
The Days of Sales Outstanding (DSO) and Number of Days of Payables data were not provided for any of the years in the analysis, indicating that information on the collection period for sales and the payment period for payables relative to the reporting dates is not available for interpretation.
Overall, CF Industries appeared to manage its inventory efficiently, with fluctuations in the DOH suggesting adjustments in inventory levels. The lack of DSO and payables data limits the comprehensive assessment of the company's overall liquidity and operational efficiency based on these activity ratios.
Long-term
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Fixed asset turnover | — | — | 1.67 | 0.89 | 0.54 |
| Total asset turnover | 0.44 | 0.46 | 0.84 | 0.53 | 0.34 |
The long-term activity ratios for CF Industries Holdings Inc, specifically the Fixed Asset Turnover and Total Asset Turnover, demonstrate the efficiency of the company in utilizing its assets over the years.
The Fixed Asset Turnover ratio indicates how effectively the company utilizes its fixed assets to generate revenue. CF Industries Holdings Inc's Fixed Asset Turnover has shown a positive trend from 0.54 in December 31, 2020, to 1.67 in December 31, 2022, indicating an improvement in the efficiency of utilizing fixed assets. However, there is missing data for December 31, 2023 and December 31, 2024. It is essential to investigate the reasons for this missing data to gain a comprehensive understanding of the company's performance.
On the other hand, the Total Asset Turnover ratio measures the company's ability to generate sales from its total assets. CF Industries Holdings Inc's Total Asset Turnover has varied over the years, from 0.34 in December 31, 2020, to 0.44 in December 31, 2024. The fluctuation in this ratio may indicate changes in the company's operational efficiency and asset utilization strategies.
In conclusion, while CF Industries Holdings Inc has shown improvement in its Fixed Asset Turnover, a deeper analysis is required to understand the factors influencing the fluctuations in the Total Asset Turnover ratio over the years. Further investigation into the company's operating activities and asset management practices can provide valuable insights into its long-term performance.