Commercial Metals Company (CMC)

Short-term

Turnover ratios

The activity ratios analysis of Commercial Metals Company reveals the following trends:

1. Inventory turnover: The company's inventory turnover has been fluctuating over the past few quarters, ranging from a low of 4.80 to a high of 8.49. This indicates that the company is managing its inventory efficiently, with the average number of times inventory is sold and replaced during the year being around 6.6.

2. Receivables turnover: Commercial Metals Company has maintained a relatively stable receivables turnover ratio, ranging between 5.63 and 7.48. This suggests that the company is collecting its accounts receivable in a timely manner, with an average turnover of around 6.6 times per year.

3. Payables turnover: The company's payables turnover has also shown some fluctuations, varying from a low of 13.63 to a high of 22.62. This indicates that the company is managing its accounts payable effectively, with an average turnover of about 18.1 times per year.

4. Working capital turnover: Commercial Metals Company has seen some variability in its working capital turnover, with a range between 2.93 and 4.36. A higher turnover ratio implies the company is efficiently utilizing its working capital to generate sales revenue.

Overall, the company appears to be effectively managing its operational activities, with efficient utilization of inventory, timely collection of receivables, and effective management of payables. However, there are minor fluctuations in the ratios, suggesting some room for improvement in certain areas to optimize working capital efficiency.

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Average number of days

Commercial Metals Company's days of inventory on hand (DOH) has shown some fluctuations over the period but has generally been manageable, ranging from a low of 42.98 days to a high of 76.05 days. This indicates the company's ability to efficiently manage its inventory levels, with a lower number of days implying faster inventory turnover.

The days of sales outstanding (DSO) metric has also varied throughout the periods but has generally been steady, ranging from 48.81 days to 64.78 days. This suggests that the company has been successful in collecting its accounts receivable in a timely manner, with a lower DSO indicating quicker cash conversion from sales.

In terms of the number of days of payables, Commercial Metals Company has shown some variability, ranging from 16.13 days to 26.79 days. A lower number of days of payables indicates that the company is able to manage its payment obligations efficiently, potentially leveraging its credit terms with suppliers.

Overall, the company's activity ratios reflect a reasonably efficient management of inventory, accounts receivable, and accounts payable over the analyzed periods, with fluctuations likely influenced by various factors such as business cycles and industry dynamics.

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Long-term

The fixed asset turnover ratio for Commercial Metals Company has been relatively stable over the past few quarters, ranging from 3.06 to 4.77. This indicates that the company generates between $3.06 to $4.77 in revenue for every dollar invested in fixed assets. The trend shows a slight decrease in the most recent quarters, potentially suggesting that the efficiency of utilizing fixed assets to generate sales has decreased slightly.

On the other hand, the total asset turnover ratio has also shown consistency, ranging from 1.16 to 1.55. This indicates that the company generates between $1.16 to $1.55 in revenue for every dollar invested in total assets. The ratios fluctuate slightly but overall demonstrate stable performance in utilizing total assets to generate sales.

In summary, Commercial Metals Company has been efficiently generating revenue from both fixed assets and total assets, although there has been a slight decrease in fixed asset turnover in the most recent quarters.