Eagle Materials Inc (EXP)

Short-term

Turnover ratios

Evaluating the activity ratios of Eagle Materials Inc provides valuable insights into the efficiency of the company's operational activities.

1. Inventory Turnover: The inventory turnover ratio indicates how many times a company's inventory is sold and replaced over a specific period. Eagle Materials Inc's inventory turnover has been relatively stable over the years, ranging from 3.82 to 5.67. A higher turnover ratio suggests effective inventory management and faster sales of goods.

2. Receivables Turnover: The receivables turnover ratio measures how efficiently a company collects its outstanding accounts receivable during a given period. Eagle Materials Inc maintained a consistent range of 10.15 to 10.82 for this ratio, indicating a steady collection of receivables over the years.

3. Payables Turnover: The payables turnover ratio reflects how quickly a company pays its suppliers for credit purchases. Eagle Materials Inc's payables turnover ranged from 11.80 to 14.43, showing that the company efficiently manages its payments to suppliers.

4. Working Capital Turnover: The working capital turnover ratio demonstrates how effectively a company utilizes its working capital to generate sales revenue. Eagle Materials Inc's working capital turnover varied from 5.34 to 7.92, illustrating the company's ability to generate sales relative to its working capital investment.

In conclusion, the analysis of Eagle Materials Inc's activity ratios reveals a consistent and efficient management of inventory, receivables, payables, and working capital over the years. These ratios indicate that the company effectively manages its operational activities to support its revenue generation and overall financial performance.

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Average number of days

Based on the provided data for Eagle Materials Inc, let's analyze the activity ratios:

1. Days of Inventory on Hand (DOH):
- In March 2021, the company held inventory for around 70.86 days before it was sold.
- The DOH decreased to 64.37 days by March 2022, indicating an improvement in inventory management efficiency.
- However, there was a slight increase in the DOH to 70.61 days by March 2023.
- Subsequently, there were significant increases in the DOH to 86.71 days by March 2024 and 95.47 days by March 2025, which may raise concerns about overstocking or challenges in sales.

2. Days of Sales Outstanding (DSO):
- The DSO for March 2021 was 33.73 days, indicating the average number of days it took to collect outstanding receivables.
- There was a slight increase in DSO to 35.98 days by March 2022, which could suggest delays in receiving payments from customers.
- The DSO remained relatively stable around 35-36 days from March 2022 to March 2024, showing consistency in collecting receivables.
- By March 2025, the DSO decreased slightly to 34.28 days, which could reflect an improvement in the company's credit and collection policies.

3. Number of Days of Payables:
- In March 2021, Eagle Materials took approximately 25.30 days, on average, to pay its creditors.
- The number of days of payables increased to 30.92 days by March 2022, indicating a potential stretching of payment terms.
- There was a decrease in the number of days of payables to 26.71 days by March 2023, which could signal improved liquidity management.
- Subsequently, the number of days of payables increased slightly to 29.49 days by March 2024 and 29.87 days by March 2025, suggesting a moderate increase in trade credit terms.

In summary, while the company showed improvement in inventory turnover and collection of receivables in the earlier years, there were concerns about increasing inventory holding periods in the later years. The company also seemed to manage its payable days effectively, with fluctuations observed over the years. Further analysis and comparison with industry benchmarks would provide additional insights into Eagle Materials Inc's operational efficiency and working capital management.

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Long-term

Eagle Materials Inc's fixed asset turnover ratio has shown a positive trend over the past years, increasing from 0.98 in March 2021 to 1.29 in March 2023. However, it is notable that data is unavailable for the years 2024 and 2025, which limits the ability to assess the overall trend accurately.

On the other hand, the total asset turnover ratio experienced fluctuations during the period under review. It improved from 0.57 in March 2021 to 0.77 in March 2023 but remained constant at 0.77 in March 2024. However, there was a slight decline to 0.69 by March 2025.

Overall, a higher fixed asset turnover ratio indicates that Eagle Materials Inc is generating more revenue per dollar of fixed assets, demonstrating efficiency in asset utilization. On the contrary, the declining total asset turnover ratio from 2023 to 2025 may suggest a decrease in revenue generated per dollar of total assets, which could imply less efficiency in managing its overall asset base.