DXP Enterprises Inc (DXPE)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Inventory turnover | 15.05 | 13.83 | 10.82 | 1.18 | 9.40 |
| Receivables turnover | 5.22 | 4.49 | 4.80 | — | 6.63 |
| Payables turnover | 16.19 | 13.92 | 14.02 | 1.76 | 15.91 |
| Working capital turnover | 3.83 | 4.79 | 4.89 | 3.75 | 4.62 |
Inventory turnover for DXP Enterprises Inc has been steadily increasing over the years, indicating efficient management of inventory levels and a shorter time taken to sell inventory. This is a positive trend as higher turnover ratios suggest that the company is effectively managing its inventory to generate sales.
Receivables turnover has shown some fluctuations, but overall, it has been relatively stable. A higher receivables turnover ratio implies that the company is collecting its accounts receivable efficiently. The slight decrease in 2023 compared to the previous years may warrant further investigation to ensure timely collection of outstanding payments.
Payables turnover has shown a consistent uptrend, indicating that the company is managing its payables effectively by paying its suppliers promptly. A higher payables turnover ratio suggests that the company is using its trade credit efficiently.
The working capital turnover ratio measures how effectively a company is using its working capital to generate revenue. DXP Enterprises Inc's working capital turnover has fluctuated over the years but remains at a healthy level. A higher ratio indicates that the company is efficiently using its working capital to support its operations and generate sales.
Overall, based on the activity ratios, DXP Enterprises Inc appears to be managing its inventory, receivables, payables, and working capital efficiently, which bodes well for the company's operational performance and financial health.
Average number of days
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 24.25 | 26.39 | 33.74 | 310.10 | 38.83 |
| Days of sales outstanding (DSO) | days | 69.91 | 81.31 | 76.09 | — | 55.04 |
| Number of days of payables | days | 22.54 | 26.23 | 26.03 | 207.17 | 22.94 |
The analysis of DXP Enterprises Inc's activity ratios reveals the following trends:
1. Days of Inventory on Hand (DOH):
- The company has shown improvement in managing its inventory over the years.
- From 2019 to 2023, the DOH decreased significantly from 38.83 days to 24.25 days.
- This indicates that DXP Enterprises has been able to efficiently control its inventory levels and reduce the number of days it takes to sell its inventory, which is a positive sign.
2. Days of Sales Outstanding (DSO):
- The DSO has fluctuated over the years, with a peak in 2022 at 81.31 days.
- In 2023, there was a decrease in DSO to 69.91 days, indicating that the company has been able to collect its accounts receivable more quickly than in the previous year.
- However, comparative data for 2020 is missing, making it difficult to assess the trend accurately.
3. Number of Days of Payables:
- DXP Enterprises has been consistent in managing its payables over the years.
- The number of days of payables has remained relatively stable, with a slight decrease from 26.23 days in 2022 to 22.54 days in 2023.
- This suggests that the company has been successful in maintaining good relationships with its suppliers while effectively managing its payment cycles.
Overall, the trends in DXP Enterprises Inc's activity ratios indicate improvements in inventory management and accounts receivable collections, along with consistent management of payables. These factors reflect the company's efforts to enhance operational efficiency and maintain healthy working capital management practices.
Long-term
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Fixed asset turnover | 32.56 | 31.58 | 21.07 | 17.27 | 19.49 |
| Total asset turnover | 1.38 | 1.40 | 1.22 | 1.13 | 1.58 |
The Fixed Asset Turnover ratio measures how efficiently a company is utilizing its fixed assets to generate sales. DXP Enterprises Inc has shown a consistent improvement in this ratio over the years, with a significant increase from 19.49 in 2019 to 32.56 in 2023. This indicates that the company is generating more revenue per dollar invested in fixed assets.
On the other hand, the Total Asset Turnover ratio reflects the company's overall efficiency in using all its assets to generate revenue. DXP Enterprises Inc's Total Asset Turnover ratio has fluctuated over the years, ranging from 1.13 in 2020 to 1.40 in 2022. The downward trend from 2019 to 2020 may suggest a decrease in the company's ability to generate sales relative to its total assets, but the subsequent increase in 2022 could indicate an improvement in efficiency.
Overall, the company's strong Fixed Asset Turnover ratios suggest that DXP Enterprises Inc is effectively utilizing its fixed assets to drive revenue growth, while the Total Asset Turnover ratios show some variability but indicate overall satisfactory efficiency in generating sales relative to total assets.