Darling Ingredients Inc (DAR)

Short-term

Turnover ratios

Darling Ingredients Inc's inventory turnover has shown a consistent increase from 8.51 in 2020 to 9.45 in 2024, indicating that the company is managing its inventory more efficiently over the years. This suggests that Darling is selling its products more frequently within a given period.

The receivables turnover ratio also demonstrates an upward trend, reaching 302.60 in 2024 from 8.54 in 2020. This significant increase implies that Darling is collecting its accounts receivables more swiftly. However, the unusually high figure of 779.85 in 2023 may indicate a potential anomaly or irregularity in the financial data for that year.

In terms of payables turnover, Darling has shown a steady rise in efficiency in managing its payables, with the ratio increasing from 13.53 in 2020 to 15.63 in 2024. This suggests that the company is taking longer to pay its suppliers, possibly indicating improved cash flow management.

The working capital turnover ratio has been fluctuating, indicating variability in the company's ability to generate sales relative to its working capital. The data shows a peak in 2021 at 13.91 and a low point in 2023 at 7.63. A higher ratio indicates better utilization of working capital to generate revenue, which can be seen in Darling's improved performance in 2024 with a ratio of 14.44.

Overall, Darling Ingredients Inc's activity ratios reflect efficient management of inventory, receivables, payables, and working capital over the years, demonstrating the company's effectiveness in operating and managing its resources to support business activities.

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Average number of days

The activity ratios of Darling Ingredients Inc, based on the provided data, exhibit some noteworthy trends over the years:

1. Days of Inventory on Hand (DOH):
- The DOH shows a fluctuating trend over the years, ranging from 38.63 days in December 2024 to 44.52 days in December 2023.
- The company seems to have effectively managed its inventory levels by reducing the days of inventory on hand from 42.88 days in December 2020 to 38.63 days in December 2024.

2. Days of Sales Outstanding (DSO):
- The DSO indicates the average number of days a company takes to collect revenue after a sale.
- Darling Ingredients Inc has shown a significant improvement in its DSO from 42.72 days in December 2020 to just 1.21 days in December 2024.
- This improvement suggests the company has become more efficient in managing its accounts receivable and collecting payments from customers promptly.

3. Number of Days of Payables:
- The number of days of payables measures how long a company takes to pay its suppliers or creditors.
- Over the years, Darling Ingredients Inc has reduced its payables turnover cycle from 26.97 days in December 2020 to 23.35 days in December 2024.
- The decreasing trend in payables days indicates that the company is effectively managing its payables and possibly negotiating better terms with its suppliers.

In conclusion, Darling Ingredients Inc has shown improvements in managing its activity ratios, with better inventory management, efficient accounts receivable collection, and effective payables management over the years. These trends reflect positively on the company's operational efficiency and cash flow management.

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Long-term

Darling Ingredients Inc's fixed asset turnover has shown a positive trend over the years, increasing from 1.88 in 2020 to 2.11 in 2024. This indicates that the company is effectively utilizing its fixed assets to generate revenue.

On the other hand, the total asset turnover ratio has fluctuated during the same period, with a peak of 0.76 in 2021 and a low of 0.57 in 2024. This suggests that the company's ability to generate sales from its total assets has been somewhat inconsistent.

Overall, the increasing trend in fixed asset turnover is a positive sign of operational efficiency, but the fluctuating total asset turnover indicates some variability in the company's overall asset utilization efficiency.