Dow Inc (DOW)

Short-term

Turnover ratios

Based on the provided data for Dow Inc's activity ratios, we can see the following trends:

1. Inventory Turnover:
- The inventory turnover ratio has been showing a generally increasing trend over the period, starting at 5.65 in March 2020 and peaking at 7.24 in December 2022 before slightly decreasing to 6.18 in December 2024. This indicates that Dow Inc is efficiently managing its inventory levels and turning them into sales at a faster rate.

2. Receivables Turnover:
- The receivables turnover ratio fluctuates over the period, with some peaks and troughs. It starts at 5.49 in March 2020, rises to 7.34 in December 2022, and then fluctuates between 5.90 and 6.26 in the last few periods. This suggests that the company's collection of receivables varies but overall remains at a healthy level.

3. Payables Turnover:
- The payables turnover ratio demonstrates a slightly fluctuating but generally increasing trend. Starting at 6.40 in March 2020, the ratio increases to 7.48 in March 2023, indicating that Dow Inc is extending its payables at a slower rate over time, which may have implications for its cash flow management.

4. Working Capital Turnover:
- The working capital turnover ratio shows some fluctuations over the period, with peaks in December 2021 and September 2022. However, it generally decreases towards the end of the period, moving from 7.21 in December 2021 to 6.82 in December 2024. This suggests that Dow Inc's efficiency in utilizing its working capital has slightly decreased over time.

In conclusion, Dow Inc has shown efficiency in managing its inventory and receivables turnover over the period, while also extending its payables turnover. However, the working capital turnover has shown a decreasing trend, indicating a potential decrease in efficiency in utilizing working capital.

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Average number of days

Dow Inc's activity ratios provide insights into the efficiency of its inventory management, accounts receivable collection, and accounts payable turnover.

1. Days of Inventory on Hand (DOH): Dow Inc's DOH has shown a decreasing trend over the analyzed periods, declining from 64.58 days on March 31, 2020, to 59.02 days on December 31, 2024. This indicates that the company is managing its inventory efficiently, holding fewer days of inventory on hand which can potentially reduce storage costs and inventory obsolescence.

2. Days of Sales Outstanding (DSO): The DSO ratio reflects Dow Inc's accounts receivable collection efficiency. The company's DSO decreased from 66.54 days on March 31, 2020, to 58.31 days on December 31, 2024. A decreasing DSO implies that the company is collecting outstanding receivables more quickly, improving its cash flow and reducing the risk of bad debts.

3. Number of Days of Payables: Dow Inc's payables turnover, as measured by the number of days of payables outstanding, has shown a decreasing trend from 57.02 days on March 31, 2020, to 58.99 days on December 31, 2024. A decreasing trend in payables days indicates that the company is taking longer to pay its suppliers, potentially signaling strained supplier relationships or cash flow management.

Overall, Dow Inc's activity ratios suggest that the company is effectively managing its inventory, improving accounts receivable collection, but may need to closely monitor its payables turnover to ensure healthy supplier relationships and cash flow management.

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Long-term

The long-term activity ratios of Dow Inc, specifically the fixed asset turnover and total asset turnover, provide insights into the company's efficiency in utilizing its assets to generate revenue.

1. Fixed Asset Turnover:
- The fixed asset turnover ratio measures how efficiently the company is utilizing its fixed assets to generate sales. A higher ratio indicates better utilization of fixed assets.
- From March 2020 to December 2024, Dow Inc's fixed asset turnover ratio showed a fluctuating trend. It increased from 2.01 in March 2020 to a peak of 2.98 in June 2022, before declining to 1.95 in December 2024.
- Overall, the trend of the fixed asset turnover ratio indicates improvements in asset utilization efficiency over the period, with some fluctuations in between.

2. Total Asset Turnover:
- The total asset turnover ratio measures how efficiently the company is generating sales from all its assets, including both fixed and current assets. A higher ratio suggests better overall asset utilization.
- Dow Inc's total asset turnover ratio exhibited a similar trend to the fixed asset turnover ratio, showing fluctuations over the period.
- The ratio increased from 0.69 in March 2020 to a peak of 1.00 in September 2022, before declining slightly to 0.75 in December 2024.
- The overall trend indicates that Dow Inc was able to improve its overall asset utilization efficiency during the period, with some variability in performance.

In summary, Dow Inc's long-term activity ratios suggest that the company has made efforts to enhance its asset utilization efficiency over the analyzed period, as indicated by the upward trends in both the fixed asset turnover and total asset turnover ratios, despite occasional fluctuations. Monitoring these ratios can help stakeholders assess the company's ability to efficiently generate revenue from its assets.