EMCOR Group Inc (EME)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Inventory turnover | 94.73 | 110.61 | 155.31 | 138.77 | 193.31 |
| Receivables turnover | 3.93 | 4.31 | 4.49 | 4.58 | 4.52 |
| Payables turnover | 11.21 | 11.15 | 11.44 | 11.02 | 11.75 |
| Working capital turnover | 13.55 | 15.63 | 9.62 | 9.19 | 12.72 |
Emcor Group, Inc. has shown consistent efficiency in managing its inventory turnover over the past five years, with a gradual decline in the ratios from 193.31 in 2019 to 94.73 in 2023. This indicates that the company is turning over its inventory approximately 95 times in 2023, down from 193 times in 2019. A decreasing trend in inventory turnover may suggest an increase in average inventory levels or potential challenges in managing inventory efficiently.
In terms of receivables turnover, Emcor Group, Inc. has maintained a fairly stable performance over the years, ranging between 3.93 and 4.58. This indicates that the company is collecting its receivables approximately 4 times a year on average. A steady receivables turnover ratio signifies effective credit and collection policies, with no significant changes in the company's collection efficiency.
The payables turnover ratio for Emcor Group, Inc. has also been relatively consistent over the years, ranging from 11.02 to 11.75. This implies that the company is paying its suppliers around 11 times a year on average. A stable payables turnover ratio indicates a consistent approach to managing vendor payments and supplier relationships.
The working capital turnover for Emcor Group, Inc. has shown fluctuations over the years, with a peak in 2012 at 15.63 and a subsequent decrease to 13.55 in 2023. The working capital turnover ratio reflects how efficiently the company is utilizing its working capital to generate sales. A declining trend in this ratio may suggest inefficiencies in working capital management or lower sales generation from the available working capital.
Overall, Emcor Group, Inc.'s activity ratios suggest varying degrees of efficiency in managing inventory, receivables, payables, and working capital over the years. An in-depth analysis of these ratios can provide valuable insights into the company's operational performance and effectiveness in managing its resources.
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 | 3.85 | 3.30 | 2.35 | 2.63 | 1.89 |
| Days of sales outstanding (DSO) | days | 92.93 | 84.61 | 81.25 | 79.75 | 80.79 |
| Number of days of payables | days | 32.56 | 32.73 | 31.90 | 33.13 | 31.06 |
Activity ratios provide insights into how efficiently a company manages its assets and operations. Let's analyze the activity ratios of Emcor Group, Inc. based on the data provided:
1. Days of Inventory on Hand (DOH):
- The trend in the DOH has been increasing over the past five years, indicating that Emcor Group is holding inventory for a longer period before it is sold.
- In 2023, the DOH stood at 3.85 days, the highest in the period, suggesting that the company may be facing challenges in managing its inventory levels efficiently.
- A high DOH may tie up working capital and increase carrying costs, impacting the company's liquidity and profitability.
2. Days of Sales Outstanding (DSO):
- The DSO measures how long it takes for the company to collect payment after a sale.
- Emcor Group's DSO has shown a slightly increasing trend over the years, reaching 92.93 days in 2023.
- A higher DSO indicates that the company is taking longer to collect payments from customers, potentially impacting cash flow and liquidity.
3. Number of Days of Payables:
- The number of days of payables reflects how long it takes for the company to pay its suppliers.
- Emcor Group has maintained a relatively stable number of days of payables over the years, with some fluctuations.
- In 2023, the number of days of payables was 32.56 days, suggesting that the company takes slightly over a month to settle its payables on average.
Overall, the activity ratios of Emcor Group, Inc. paint a picture of increasing inventory holding periods and longer collection cycles, which could have implications for working capital management and cash flow. Monitoring and potentially improving these ratios could help enhance the company's operational efficiency and financial performance.
Long-term
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Fixed asset turnover | 70.15 | 70.18 | 65.13 | 55.53 | 58.74 |
| Total asset turnover | 1.90 | 2.00 | 1.82 | 1.74 | 1.90 |
The fixed asset turnover ratio for Emcor Group, Inc. has remained relatively stable over the past five years, ranging from 55.53 to 70.18. This indicates that the company is generating approximately $70.15 in revenue for every dollar invested in fixed assets at the end of 2023.
In contrast, the total asset turnover ratio has shown some fluctuation, with values ranging from 1.74 to 2.00 during the same period. This ratio reveals that for each dollar of total assets, the company generated $1.90 in revenue at the end of 2023.
Overall, both ratios suggest that Emcor Group, Inc. efficiently utilizes its assets to generate revenue. The higher fixed asset turnover ratio indicates effective utilization of fixed assets, while the total asset turnover ratio reflects the company's overall efficiency in generating revenue from its total asset base.