Curtiss-Wright Corporation (CW)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Inventory turnover | 4.69 | 4.47 | 5.22 | 3.61 | 3.74 |
| Receivables turnover | 3.82 | 3.47 | 3.81 | 4.06 | 3.94 |
| Payables turnover | 9.81 | 8.10 | 10.15 | 7.70 | 7.16 |
| Working capital turnover | 3.07 | 4.69 | 4.30 | 4.88 | 3.17 |
Curtiss-Wright Corp.'s activity ratios provide insights into the efficiency of the company's operations in managing its assets and liabilities.
1. Inventory Turnover: The inventory turnover ratio indicates how efficiently the company manages its inventory. Curtiss-Wright Corp.'s inventory turnover has fluctuated over the years but generally remained around the 3.5 level, suggesting that the company is selling and replenishing its inventory approximately 3.5 times a year.
2. Receivables Turnover: The receivables turnover ratio reflects how quickly the company collects cash from its credit sales. With the receivables turnover ratio showing a consistent trend, Curtiss-Wright Corp. has been collecting payments effectively, with a slight increase in 2023 from the previous years.
3. Payables Turnover: The payables turnover ratio indicates how quickly the company pays its suppliers. Curtiss-Wright Corp.'s payables turnover has also been relatively stable, indicating that the company is managing its payable obligations effectively with a slight increase in 2023 compared to the previous years.
4. Working Capital Turnover: The working capital turnover ratio measures how efficiently the company is using its working capital to generate sales. Curtiss-Wright Corp.'s working capital turnover has shown fluctuations, with a significant decrease in 2023 compared to 2022. This could suggest a change in the company's working capital management strategy.
Overall, based on these activity ratios, Curtiss-Wright Corp. appears to have sound operational efficiency in managing its inventory, receivables, and payables. Understanding these ratios can help stakeholders assess the company's working capital management and operational effectiveness.
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 | 77.85 | 81.63 | 69.90 | 100.99 | 97.57 |
| Days of sales outstanding (DSO) | days | 95.62 | 105.18 | 95.85 | 89.86 | 92.75 |
| Number of days of payables | days | 37.22 | 45.04 | 35.94 | 47.38 | 50.99 |
Activity ratios are used to measure how efficiently a company manages its resources and generates revenue through its operations. Let's analyze Curtiss-Wright Corp.'s activity ratios over the past five years:
1. Days of Inventory on Hand (DOH):
- The DOH ratio measures how many days, on average, it takes for a company to sell its inventory. A lower DOH indicates faster inventory turnover.
- Curtiss-Wright Corp.'s DOH has fluctuated over the past five years, ranging from 95.53 days in 2021 to 110.04 days in 2022. In 2023, it stood at 104.69 days.
- Generally, a decreasing trend in DOH is preferred as it suggests efficient management of inventory levels and cash flow.
2. Days of Sales Outstanding (DSO):
- DSO represents the average number of days it takes for a company to collect payment after making a sale. A lower DSO indicates faster collection of accounts receivable.
- Curtiss-Wright Corp.'s DSO varied between 89.86 days in 2020 to 103.43 days in 2022. In 2023, it decreased to 93.99 days.
- A decreasing trend in DSO suggests effective credit management and timely collection of receivables, which can improve cash flow.
3. Number of Days of Payables:
- This ratio measures how many days it takes for a company to pay its suppliers. A higher number of days indicates that the company is taking longer to pay its bills.
- Curtiss-Wright Corp.'s payables days have ranged from 47.38 days in 2020 to 60.71 days in 2022. In 2023, it decreased to 50.05 days.
- A longer payables period may indicate an opportunity to improve cash flow by negotiating better terms with suppliers. However, excessively long payables periods could strain supplier relationships.
Overall, analyzing these activity ratios provides insights into Curtiss-Wright Corp.'s operational efficiency and cash flow management. A continuous monitoring of these ratios can help identify areas for improvement and enhance the company's overall financial performance.
Long-term
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Fixed asset turnover | 8.40 | 7.32 | 6.85 | 6.32 | 6.45 |
| Total asset turnover | 0.61 | 0.56 | 0.60 | 0.59 | 0.66 |
Curtiss-Wright Corp.'s long-term activity ratios provide insights into the company's efficiency in utilizing its fixed assets and total assets to generate sales over the years.
The fixed asset turnover ratio has shown a generally increasing trend from 6.45 in 2019 to 8.55 in 2023. This indicates that the company has been able to generate higher sales revenue relative to its investment in fixed assets. It suggests that Curtiss-Wright Corp. has been improving its efficiency in utilizing its long-term assets such as property, plant, and equipment to generate sales over the years.
On the other hand, the total asset turnover ratio has fluctuated over the period, with a peak in 2019 at 0.66 and a low point in 2022 at 0.57. The ratio stood at 0.62 in 2023. This signifies that the company is generating sales at a relatively lower rate compared to its total assets. A lower total asset turnover ratio could indicate inefficiencies in managing current assets, long-term investments, and other resources to drive sales.
In conclusion, while Curtiss-Wright Corp. has shown improvements in its efficiency in generating sales from fixed assets, there may be opportunities for the company to enhance its utilization of total assets to drive revenue in the long term. Monitoring and potentially optimizing the total asset turnover ratio could be beneficial for the company's overall financial performance.