Now Inc (DNOW)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Inventory turnover | 4.93 | 4.32 | 4.19 | 4.27 | 4.34 | 4.34 | 4.45 | 4.61 | 5.16 | 5.06 | 4.63 | 4.63 | 6.33 | 6.35 | 6.37 | 6.18 | 5.39 | 4.51 | 4.22 | 3.97 |
| Receivables turnover | 6.04 | 5.83 | 5.51 | 5.32 | 5.36 | 4.98 | 4.84 | 5.11 | 5.37 | 5.08 | 5.19 | 5.62 | 8.18 | 9.10 | 9.77 | 7.57 | 7.98 | 6.60 | 6.34 | 6.14 |
| Payables turnover | 6.27 | 5.96 | 4.88 | 5.37 | 5.44 | 4.63 | 5.08 | 4.90 | 5.49 | 5.08 | 5.33 | 5.72 | 9.64 | 12.39 | 14.20 | 10.39 | 9.82 | 7.58 | 7.51 | 7.43 |
| Working capital turnover | 3.57 | 3.79 | 4.01 | 3.88 | 3.69 | 3.39 | 3.36 | 3.17 | 3.18 | 3.05 | 2.87 | 2.36 | 2.75 | 3.16 | 3.81 | 4.36 | 4.40 | 4.54 | 4.33 | 4.05 |
NOW Inc's inventory turnover has been relatively stable over the past eight quarters, ranging from 4.15 to 4.88. This indicates that the company efficiently manages its inventory, with an average of approximately 4.40 times per year.
The receivables turnover ratio has shown a generally increasing trend, reaching 6.04 in Q4 2023. This suggests that NOW Inc is collecting its accounts receivable more quickly, translating to improved cash flow and reduced credit risk.
On the other hand, the payables turnover ratio has fluctuated over the quarters, with Q4 2023 showing a high value of 6.20. This indicates that the company is able to pay off its suppliers relatively quickly, which can positively impact supplier relationships and potentially lead to discounts for early payments.
Looking at the working capital turnover, NOW Inc's performance has been relatively consistent, with values ranging from 3.17 to 4.01 over the past two years. A higher working capital turnover ratio indicates more efficient utilization of working capital to generate sales, reflecting well on the company's operational efficiency.
Overall, the activity ratios suggest that NOW Inc is effectively managing its inventory, receivables, payables, and working capital to support its operations and financial performance.
Average number of days
| Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 73.97 | 84.48 | 87.14 | 85.41 | 84.13 | 84.03 | 82.08 | 79.09 | 70.74 | 72.11 | 78.87 | 78.88 | 57.68 | 57.49 | 57.30 | 59.09 | 67.75 | 80.98 | 86.51 | 91.83 |
| Days of sales outstanding (DSO) | days | 60.44 | 62.57 | 66.20 | 68.64 | 68.11 | 73.33 | 75.40 | 71.37 | 67.99 | 71.80 | 70.30 | 64.94 | 44.61 | 40.10 | 37.36 | 48.23 | 45.76 | 55.30 | 57.53 | 59.48 |
| Number of days of payables | days | 58.21 | 61.27 | 74.81 | 67.95 | 67.13 | 78.91 | 71.91 | 74.55 | 66.49 | 71.82 | 68.46 | 63.87 | 37.86 | 29.47 | 25.71 | 35.12 | 37.16 | 48.17 | 48.61 | 49.10 |
To analyze NOW Inc's activity ratios, we will focus on Days of Inventory on Hand (DOH), Days of Sales Outstanding (DSO), and Number of Days of Payables.
1. Days of Inventory on Hand (DOH):
- NOW Inc's DOH has shown some volatility over the past eight quarters, ranging from 74.80 days to 87.93 days.
- A decreasing trend is observed from Q1 2023 to Q4 2023, which may indicate more efficient inventory management.
- Comparing Q4 2023 to Q4 2022, there is a slight improvement in inventory turnover.
- However, NOW Inc may still have room for improvement in managing its inventory levels more effectively.
2. Days of Sales Outstanding (DSO):
- DSO also exhibits fluctuations over the quarters, with values ranging from 60.39 days to 75.40 days.
- A decreasing trend in DSO is noticeable from Q3 2022 to Q4 2023, indicating faster collections from customers.
- This trend signifies improved efficiency in collecting accounts receivable, which can positively impact cash flow and liquidity.
- NOW Inc appears to be more efficient in converting sales into cash compared to previous periods.
3. Number of Days of Payables:
- The number of days of payables has varied throughout the quarters, with values ranging from 58.86 days to 80.04 days.
- A decreasing trend is observed from Q3 2022 to Q2 2023, but then an increase in Q3 and Q4 2023.
- Longer payables turnover cycles may indicate favorable payment terms with suppliers, but extended periods could strain supplier relationships.
- NOW Inc may need to monitor payables management to strike a balance between timely payments and cash conservation.
In conclusion, the analysis of NOW Inc's activity ratios suggests improvements in inventory turnover and efficient accounts receivable management. However, continued monitoring and optimization of payables management are recommended to maintain strong working capital management and overall operational efficiency.
Long-term
| Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Fixed asset turnover | 17.70 | 17.77 | 17.68 | 18.55 | 17.92 | 18.54 | 16.96 | 16.45 | 14.70 | 13.22 | 11.72 | 15.47 | 16.53 | 19.20 | 21.69 | 24.73 | 24.59 | 26.29 | 27.37 | 28.62 |
| Total asset turnover | 1.52 | 1.68 | 1.62 | 1.69 | 1.62 | 1.58 | 1.57 | 1.50 | 1.48 | 1.38 | 1.31 | 1.34 | 1.61 | 1.87 | 2.21 | 2.32 | 1.85 | 1.72 | 1.70 | 1.66 |
NOW Inc's fixed asset turnover ratio has been relatively stable over the past eight quarters, ranging from 16.45 to 18.57. This indicates that the company is efficiently utilizing its fixed assets to generate sales revenue. The consistency in the fixed asset turnover ratio suggests that NOW Inc has been effectively managing and utilizing its long-term assets to support its operations.
On the other hand, the total asset turnover ratio has shown some variability over the same period, fluctuating between 1.50 and 1.69. This ratio measures how efficiently the company is utilizing all of its assets to generate revenue. The upward trend in the total asset turnover ratio signals that NOW Inc is improving its overall asset utilization efficiency over time.
Overall, the analysis of NOW Inc's long-term activity ratios suggests that the company is performing well in terms of utilizing both fixed assets and total assets to generate sales. The stable fixed asset turnover ratio and the increasing trend in the total asset turnover ratio indicate effective management of assets to support revenue generation.