Dow Inc (DOW)

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
Inventory turnover	6.97	6.97	7.10	7.19	7.24	6.84	6.21	6.31	6.28	6.07	5.66	5.79	5.85	5.87	5.87	5.65	5.90
Receivables turnover	6.75	6.21	6.43	6.85	7.34	6.96	6.19	5.86	5.75	5.45	5.07	4.92	5.22	5.38	5.68	5.49	5.69
Payables turnover	6.69	6.85	7.47	7.48	7.01	6.81	6.00	5.73	5.50	5.75	5.39	5.43	5.66	6.14	6.74	6.40	6.16
Working capital turnover	5.83	5.70	5.53	6.03	6.22	7.96	7.11	6.40	7.21	6.75	5.74	5.21	4.83	5.02	5.42	5.95	7.00

Dow Inc's activity ratios provide insight into the efficiency of the company's management of its working capital components.

Firstly, the inventory turnover ratio has remained relatively stable, fluctuating around the range of 6.00 to 6.92 over the past eight quarters. This implies that the company has been effectively managing its inventory levels and is efficient in converting inventories into sales.

Secondly, the receivables turnover ratio has also displayed consistency, albeit with some fluctuations. The ratio has generally been within the range of 5.86 to 7.34, indicating that the company effectively collects outstanding receivables and converts them into cash or sales.

Thirdly, the payables turnover ratio has shown some variability, but overall, it has remained within a relatively narrow range between 5.45 and 7.10. This suggests that Dow Inc has been managing its payables efficiently, maintaining good relations with suppliers while also effectively using trade credit.

Lastly, the working capital turnover ratio has fluctuated over the quarters, but as a whole, it has displayed a decreasing trend from 7.96 in Q3 2022 to 5.70 in Q3 2023. This implies that the company's efficiency in utilizing working capital has decreased slightly over the quarters.

Overall, based on these key activity ratios, Dow Inc appears to have generally maintained efficient management of its working capital components, though the decreasing trend in the working capital turnover ratio should be monitored closely for potential impacts on the company's overall operational efficiency.

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
Days of inventory on hand (DOH)	days	52.39	52.40	51.44	50.76	50.43	53.35	58.76	57.85	58.11	60.17	64.45	63.02	62.40	62.17	62.21	64.58	61.87
Days of sales outstanding (DSO)	days	54.10	58.75	56.76	53.31	49.74	52.41	58.98	62.30	63.44	66.93	71.96	74.20	69.98	67.86	64.25	66.54	64.20
Number of days of payables	days	54.55	53.30	48.88	48.79	52.08	53.60	60.85	63.67	66.34	63.44	67.70	67.24	64.46	59.46	54.12	57.02	59.28

Days of inventory on hand (DOH) measures how many days it takes for the company to turn its inventory into sales. A lower number is generally favorable, as it indicates efficient inventory management. Dow Inc's DOH has been relatively stable around 55-56 days over the past few quarters, suggesting a consistent level of inventory turnover.

Days of sales outstanding (DSO) reflects the average number of days it takes for the company to collect its accounts receivable. A lower DSO is preferable, as it signifies quicker collection of sales. Dow Inc's DSO has fluctuated in the mid-50s to low-60s range, with a slight increase in the most recent quarter. This fluctuation may indicate variability in the company's ability to collect receivables.

The number of days of payables measures how long it takes for the company to pay its suppliers. A higher number is generally positive, as it allows the company to hold onto cash longer. Dow Inc's payables days have been relatively stable, hovering around 50-60 days over the past few quarters.

Overall, from an activity ratio perspective, Dow Inc has shown fairly steady performance in managing its inventory, receivables, and payables over the past few quarters, with no major red flags or significant improvements.

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
Fixed asset turnover	2.12	2.23	2.41	2.63	2.78	2.97	2.98	2.87	2.67	2.61	2.33	2.04	1.90	1.86	1.90	2.01	2.05
Total asset turnover	0.77	0.79	0.84	0.90	0.94	1.00	0.97	0.92	0.87	0.83	0.75	0.67	0.63	0.63	0.66	0.69	0.71

The fixed asset turnover ratio for Dow Inc has shown a declining trend from 2.87 in March 2022 to 2.12 in December 2023. This indicates that the company's ability to generate sales from its fixed assets has decreased over the period. Similarly, the total asset turnover ratio has also shown a decreasing trend, falling from 0.97 in June 2022 to 0.77 in December 2023. This suggests that Dow Inc is generating fewer sales in relation to its total assets. Overall, both ratios indicate a decline in the efficiency of the company's long-term asset utilization over the period under consideration.