Expeditors International of Washington Inc (EXPD)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Inventory turnover | — | 57.73 | 14.51 | 27.23 | 54.42 |
| Receivables turnover | 6.06 | 8.09 | 4.33 | 5.05 | 6.21 |
| Payables turnover | 9.31 | 13.41 | 7.12 | 7.84 | 9.75 |
| Working capital turnover | 5.36 | 6.92 | 5.68 | 4.87 | 5.10 |
Expeditors International Of Washington, Inc.'s activity ratios provide insights into how efficiently the company is managing its various assets and liabilities.
1. Receivables Turnover:
The receivables turnover ratio measures how effectively the company is collecting payments from its customers. It indicates that the company collected its accounts receivable approximately 6.07 times in 2023, a decrease from 8.10 times in 2022, and an increase from 4.34 times in 2021. The downward trend in the ratio from 2022 to 2023 could imply that there may be delays in collecting receivables.
2. Payables Turnover:
The payables turnover ratio reflects how quickly the company pays its suppliers. The ratio stood at 7.03 in 2023, showing a decrease from 11.34 in 2022. A lower ratio could indicate that the company is taking longer to settle its payables. Despite the decrease in 2023, the ratio is still within a reasonable range.
3. Working Capital Turnover:
The working capital turnover ratio measures how effectively the company is using its working capital to generate revenue. In 2023, the ratio was 5.37, down from 6.93 in 2022 but higher compared to 4.89 in 2020. The decline from 2022 to 2023 suggests a potential decrease in revenue generated from working capital efficiency.
Overall, the activity ratios of Expeditors International Of Washington, Inc. indicate some fluctuations in efficiency in managing its assets and liabilities over the years. Further analysis and comparison with industry benchmarks may be needed to understand the company's performance in more detail.
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 | — | 6.32 | 25.16 | 13.41 | 6.71 |
| Days of sales outstanding (DSO) | days | 60.28 | 45.13 | 84.23 | 72.27 | 58.78 |
| Number of days of payables | days | 39.20 | 27.23 | 51.29 | 46.54 | 37.44 |
Expeditors International Of Washington, Inc.'s days of inventory on hand (DOH) data for the years 2023 to 2019 is not available in the table.
Regarding days of sales outstanding (DSO), it shows a fluctuating trend over the five-year period. In 2023, the DSO increased to 60.15 days from 45.06 days in 2022, indicating that it took longer for the company to collect its accounts receivable in 2023. This increase might suggest a potential issue with the company's credit policy or collection processes.
In contrast, the number of days of payables has been varying over the same period. In 2023, the days of payables increased to 51.90 days compared to 32.18 days in 2022. This suggests that the company took longer to pay its suppliers in 2023, which could be due to strategic management of cash flow or negotiations with suppliers.
Overall, these activity ratios indicate that Expeditors International Of Washington, Inc. may need to focus on improving its accounts receivable management to reduce the DSO and enhancing its payables management to optimize cash flow and supplier relationships. Further investigation into the reasons behind these fluctuations is recommended to understand the company's operational efficiency and financial health.
Long-term
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Fixed asset turnover | 19.37 | 33.96 | 33.84 | 19.93 | 16.35 |
| Total asset turnover | 2.05 | 3.05 | 2.17 | 2.05 | 2.21 |
Expeditors International Of Washington, Inc. has shown varying trends in its long-term activity ratios over the past five years. The fixed asset turnover ratio has fluctuated significantly, with a notable peak in 2022 at 34.01 and a decrease to 19.41 in 2023. This ratio indicates the company's efficiency in generating sales revenue from its investment in fixed assets. The fluctuation suggests that the company may have experienced changes in its asset utilization efficiency or sales performance.
On the other hand, the total asset turnover ratio has also shown fluctuations, albeit with less pronounced variations compared to the fixed asset turnover ratio. The total asset turnover ratio peaked at 3.05 in 2022 and experienced a slight decrease to 2.06 in 2023. This ratio reflects the company's ability to generate revenue relative to its total assets. While the decrease in 2023 may indicate a lower level of efficiency in generating sales compared to the previous year, the ratio remains relatively stable over the five-year period.
Overall, Expeditors International Of Washington, Inc. may benefit from further analysis to understand the factors contributing to the fluctuations in its long-term activity ratios and to identify potential areas for improvement in asset utilization and revenue generation.