Dril-Quip Inc (DRQ)

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 1.59 1.55 1.60 1.75 1.82 1.85 1.84 1.77 1.66 1.26 1.23 1.31 1.27 1.28 1.37 1.51 1.44 1.45 1.48 1.49
Receivables turnover 1.49 1.37 1.33 1.31 1.53 1.56 1.56 1.66 1.59 1.53 1.44 1.44 1.42 1.62 1.67 1.68 1.67 1.30 1.35 1.38
Payables turnover 4.70 5.62 4.84 5.66 6.18 5.61 5.57 6.82 6.88 6.13 5.24 6.63 7.21 5.50 4.93 5.96 6.37 6.39 8.30 14.01
Working capital turnover 0.70 0.66 0.55 0.55 0.55 0.52 0.51 0.50 0.50 0.45 0.46 0.47 0.47 0.51 0.55 0.57 0.53 0.52 0.50 0.49

Dril-Quip, Inc.'s inventory turnover ratio has shown a slight decline over the last eight quarters, from 1.82 in Q4 2022 to 1.59 in Q4 2023. This indicates that the company is selling its inventory at a slightly slower pace. However, the inventory turnover remains within a stable range around 1.5 to 1.8 times over the period.

The receivables turnover ratio has fluctuated over the quarters, with a decreasing trend from 1.66 in Q1 2022 to 1.49 in Q4 2023. This suggests that the company is collecting its receivables at a slower pace, which may impact its cash flow and liquidity.

On the other hand, the payables turnover ratio has also fluctuated but generally decreased from 6.82 in Q1 2022 to 4.70 in Q4 2023. A lower payables turnover ratio may indicate that Dril-Quip, Inc. is taking longer to pay its suppliers, which could affect its relationships with vendors.

The working capital turnover ratio has shown some variability but has remained relatively stable over the quarters. It has increased slightly from 0.50 in Q1 2022 to 0.70 in Q4 2023. This indicates that the company generated more revenue relative to its working capital in the most recent quarter.

Overall, Dril-Quip, Inc.'s activity ratios reflect varying trends in inventory management, receivables collection, payables management, and working capital efficiency over the past eight quarters. It is essential for the company to closely monitor and manage these ratios to ensure effective utilization of its resources and sustainable operations.

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 230.23 236.03 227.91 208.50 200.39 196.85 198.01 206.64 219.47 289.74 295.86 278.91 287.64 284.17 267.24 242.11 253.71 251.46 246.69 245.31
Days of sales outstanding (DSO) days 244.44 266.11 274.30 278.83 237.84 234.21 233.59 220.14 230.10 238.46 252.74 253.59 256.54 225.74 218.44 217.30 218.36 281.85 269.40 264.17
Number of days of payables days 77.73 64.99 75.38 64.43 59.04 65.11 65.53 53.53 53.06 59.53 69.60 55.09 50.65 66.42 74.05 61.21 57.31 57.09 43.98 26.04

Dril-Quip, Inc.'s activity ratios provide insights into the efficiency of the company in managing its inventory, receivables, and payables.

1. Days of Inventory on Hand (DOH):
- There has been an upward trend in Days of Inventory on Hand from Q1 2022 to Q4 2023, indicating that Dril-Quip, Inc. is holding inventory for a longer period. This may suggest either an increase in inventory levels or a decrease in sales.
- The increase in DOH may tie up company funds in inventory and increase storage costs. It is essential for the company to evaluate and optimize its inventory management to improve efficiency.

2. Days of Sales Outstanding (DSO):
- The Days of Sales Outstanding have fluctuated throughout the periods, but generally, there is a gradual increase from Q1 2022 to Q4 2023. This indicates that the company is taking longer to collect payments from its customers.
- A higher DSO could potentially lead to cash flow issues and increase the risk of bad debts. Dril-Quip, Inc. may need to review its credit policies and collection procedures to shorten the collection cycle and improve cash flow.

3. Number of Days of Payables:
- The number of days of payables has shown variability over the periods, with an overall increase in the recent quarters. This implies that the company is taking longer to pay its suppliers.
- Extending the payment period may benefit cash flow in the short term; however, it could strain relationships with suppliers in the long run. Dril-Quip, Inc. should aim to maintain a balance in managing payables to ensure good supplier relationships while optimizing cash flow.

In conclusion, analyzing Dril-Quip, Inc.'s activity ratios highlights the importance of efficient management of inventory, receivables, and payables to enhance operational performance and financial health. The company should focus on improving inventory turnover, reducing DSO, and managing payables effectively to drive profitability and sustainability in the long term.

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 1.95 1.86 1.97 2.02 2.00 1.89 1.88 1.53 1.49 1.48 1.49 1.51 1.55 1.61 1.65 1.70 1.60 1.56 1.46 1.40
Total asset turnover 0.41 0.39 0.37 0.38 0.37 0.35 0.35 0.33 0.32 0.30 0.30 0.31 0.32 0.33 0.35 0.37 0.34 0.33 0.32 0.32

The fixed asset turnover ratio for Dril-Quip, Inc. has been fluctuating over the quarters, ranging from 1.53 to 2.02. This ratio indicates that the company generates between $1.53 and $2.02 in sales for every dollar invested in fixed assets. A higher fixed asset turnover ratio suggests that the company is effectively utilizing its fixed assets to generate revenues.

On the other hand, the total asset turnover ratio has also shown variability, ranging from 0.33 to 0.41. This ratio reflects how efficiently the company is using all its assets to generate sales. A total asset turnover ratio of 0.33 to 0.41 suggests that for every dollar in total assets, the company is generating between $0.33 and $0.41 in sales.

Overall, Dril-Quip, Inc. has demonstrated fluctuations in both fixed asset turnover and total asset turnover ratios, indicating varied levels of asset utilization efficiency over the quarters. Further analysis and comparison with industry benchmarks may provide deeper insights into the company's long-term activity performance.