Dana Inc (DAN)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Inventory turnover | 6.13 | 6.29 | 5.51 | 6.11 | 6.99 |
| Receivables turnover | 6.15 | 6.22 | 5.54 | 4.76 | 6.31 |
| Payables turnover | 5.85 | 5.50 | 5.48 | 5.28 | 6.64 |
| Working capital turnover | 6.92 | 7.43 | 6.22 | 5.17 | 6.44 |
Activity ratios provide insights into how efficiently a company is managing its resources and operations. Let's analyze the activity ratios of Dana Inc:
1. Inventory Turnover: The inventory turnover ratio measures how many times a company sells and replaces its inventory during a period. Dana Inc's inventory turnover has ranged from 5.18 to 6.28 over the past five years, indicating a relatively stable performance in managing its inventory.
2. Receivables Turnover: The receivables turnover ratio shows how quickly a company collects its accounts receivable. Dana Inc's receivables turnover has fluctuated between 4.96 and 6.61 over the same period, suggesting varying efficiency in collecting payments from customers.
3. Payables Turnover: The payables turnover ratio indicates how quickly a company pays its suppliers. Dana Inc's payables turnover has ranged from 4.87 to 5.97 over the past five years, demonstrating a consistent trend in managing its payables.
4. Working Capital Turnover: The working capital turnover ratio measures how effectively a company utilizes its working capital to generate sales. Dana Inc's working capital turnover has shown an increasing trend from 5.28 to 7.52 over the five-year period, indicating improved efficiency in utilizing working capital.
Overall, Dana Inc has demonstrated relatively efficient management of inventory, receivables, payables, and working capital over the past five years. The company's consistent performance in these activity ratios reflects its ability to effectively utilize its resources and optimize operational efficiency.
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 | 59.55 | 58.05 | 66.30 | 59.69 | 52.25 |
| Days of sales outstanding (DSO) | days | 59.35 | 58.72 | 65.88 | 76.64 | 57.82 |
| Number of days of payables | days | 62.39 | 66.31 | 66.60 | 69.15 | 54.96 |
Dana Inc's activity ratios indicate how efficiently the company manages its inventory, receivables, and payables.
1. Days of Inventory on Hand (DOH): Dana Inc's inventory turnover has been relatively stable over the past five years, ranging from 58.14 days in 2019 to 70.41 days in 2021. The current DOH of 63.36 days suggests that the company takes approximately two months to sell its inventory. Overall, the company's inventory management has been consistent, with no significant fluctuations.
2. Days of Sales Outstanding (DSO): Dana Inc's DSO has varied over the years, with the lowest being 55.26 days in 2019 and the highest at 73.55 days in 2020. The DSO for 2023 is 57.09 days, indicating that it takes around 57 days for the company to collect its accounts receivable. While there have been fluctuations, the DSO has generally stayed within a reasonable range, suggesting effective management of credit policies and collections.
3. Number of Days of Payables: Dana Inc's days of payables have fluctuated between 61.17 days in 2019 and 74.91 days in 2020. The current figure is 66.38 days, which indicates that the company takes approximately 66 days to pay its suppliers. The variations in payables days may reflect changes in the company's payment terms, relationships with suppliers, or working capital management strategies.
In summary, Dana Inc's activity ratios show a relatively stable inventory turnover, varying accounts receivable collection periods, and fluctuating payables days. Overall, the company appears to effectively manage its working capital components, but there may be opportunities to further optimize inventory and payables management for improved efficiency.
Long-term
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Fixed asset turnover | 4.49 | 4.57 | 4.00 | 3.10 | 3.74 |
| Total asset turnover | 1.30 | 1.35 | 1.15 | 0.94 | 1.17 |
The long-term activity ratios of Dana Inc indicate the efficiency with which the company is utilizing its fixed assets and total assets to generate revenue over the years.
The fixed asset turnover ratio has been fluctuating, but on the whole, it shows a positive trend from 2019 to 2023, increasing from 3.81 to 4.57. This indicates that Dana Inc has been able to generate more sales revenue per dollar of fixed assets invested, reflecting improved efficiency in utilizing its long-term assets to drive sales.
Similarly, the total asset turnover ratio has also shown an increasing trend over the same period, rising from 1.19 in 2019 to 1.33 in 2023. This demonstrates that the company has been more effective in generating sales revenue relative to its total assets, reflecting improved overall asset utilization efficiency.
Overall, the increasing trend in both the fixed asset turnover and total asset turnover ratios suggests that Dana Inc has been successful in improving the efficiency of its long-term asset utilization, which is a positive indication of the company's operational performance and effectiveness in generating revenue.