Eagle Materials Inc (EXP)

Short-term

Turnover ratios

1. Inventory Turnover:
- Eagle Materials Inc's inventory turnover has been declining over the past five years, from 5.40 in 2020 to 4.59 in 2024. This indicates that the company is taking longer to sell its inventory. A lower inventory turnover may suggest inefficiencies in managing inventory or potentially overstocking.

2. Receivables Turnover:
- The receivables turnover ratio has been relatively stable, ranging from 5.04 in 2020 to 11.28 in 2021, with a slight decrease to 10.41 in 2024. This suggests that Eagle Materials Inc has been effective in collecting receivables from customers. A higher turnover ratio indicates that the company is efficiently collecting credit sales.

3. Payables Turnover:
- The payables turnover ratio has fluctuated over the years, from 17.45 in 2020 to 13.50 in 2024. A higher payables turnover ratio signifies that the company is paying its suppliers more frequently. A lower ratio can indicate favorable credit terms with suppliers or potential liquidity constraints.

4. Working Capital Turnover:
- Eagle Materials Inc's working capital turnover has shown an increasing trend over the five-year period, from 2.78 in 2020 to 5.71 in 2024. A higher working capital turnover ratio indicates that the company is generating more revenue for each dollar of working capital employed. This implies improved efficiency in utilizing working capital to generate sales.

Overall, the analysis of Eagle Materials Inc's activity ratios reveals varying trends in inventory turnover, receivables turnover, payables turnover, and working capital turnover. Understanding these ratios can provide insights into the company's operational efficiency, liquidity management, and ability to generate revenue from its assets and working capital.

---

Average number of days

Eagle Materials Inc's activity ratios provide insight into how efficiently the company is managing its inventory, receivables, and payables.

1. Days of Inventory on Hand (DOH):
- The company's DOH has been increasing over the past five years, indicating that inventory is taking more days to turn over.
- The rise in DOH suggests that the company may be facing challenges in managing its inventory levels efficiently, leading to potential issues related to excess inventory or slow-moving stock.

2. Days of Sales Outstanding (DSO):
- The DSO for Eagle Materials Inc has been relatively stable over the period, indicating a consistent collection period for accounts receivable.
- The company is collecting receivables in approximately 35 to 37 days on average, which is a reasonable timeframe and suggests effective credit policies and collection practices.

3. Number of Days of Payables:
- Eagle Materials Inc's days of payables have been increasing over the years, indicating that the company is taking longer to pay its suppliers.
- A longer payables period may imply favorable payment terms with suppliers or potential liquidity constraints. However, it could also signal a strategy to optimize cash flow and working capital management.

In summary, while the company's management of receivables appears stable and effective, there are signs of potential inefficiencies in inventory management, as indicated by the increasing DOH. Additionally, the prolonged payables period suggests a cautious approach to cash flow management or relationships with suppliers.

---

Long-term

Eagle Materials Inc long-term activity ratios show an improving trend over the past five years. Fixed asset turnover has been steadily increasing from 0.80 in 2020 to 1.32 in 2024, indicating that the company is generating more revenue relative to its investment in fixed assets. This suggests improved efficiency in utilizing its fixed assets to generate sales.

Similarly, total asset turnover has also been on an upward trajectory, climbing from 0.48 in 2020 to 0.75 in 2024. This indicates that Eagle Materials is becoming more effective in generating sales from its total assets. The company has been able to increase its revenue relative to its total asset base, showcasing improved efficiency in asset utilization.

Overall, the increasing trend in both fixed asset turnover and total asset turnover ratios reflect positive long-term activity performance for Eagle Materials Inc, indicating enhanced efficiency in generating revenue from its assets.