Fastenal Company (FAST)

Activity ratios

Short-term

Turnover ratios

Dec 31, 2024 Sep 30, 2024 Jun 30, 2024 Mar 31, 2024 Dec 31, 2023 Sep 30, 2023 Jun 30, 2023 Mar 31, 2023 Dec 31, 2022 Sep 30, 2022 Jun 30, 2022 Mar 31, 2022 Dec 31, 2021 Sep 30, 2021 Jun 30, 2021 Mar 31, 2021 Dec 31, 2020 Sep 30, 2020 Jun 30, 2020 Mar 31, 2020
Inventory turnover 3.68 3.83 3.93 3.92 3.83 3.82 3.67 3.42 3.24 3.22 3.13 3.13 3.15 3.33 3.43 3.49 3.37 3.32 3.16 3.22
Receivables turnover 6.81 6.23 6.15 6.08 6.75 6.21 6.17 6.19 6.87 6.13 5.94 5.86 6.67 6.14 6.26 6.69 7.33 6.66 6.27 6.45
Payables turnover 21.02 19.79 20.19 21.26 22.07 21.03 21.95 21.21 21.72 19.50 17.88 17.28 20.59 18.15 19.27 21.17 21.79 21.17 22.81 20.40
Working capital turnover 2.99 2.97 3.05 3.02 3.11 2.93 3.01 3.10 2.98 2.84 2.85 2.75 2.76 2.77 2.77 2.91 2.99 2.72 2.80 2.86

Analysis of Fastenal Company Activity Ratios:

1. Inventory Turnover: Fastenal Company's inventory turnover ratio has remained relatively stable over the past few years, fluctuating between 3.13 and 3.93. A higher inventory turnover ratio indicates that Fastenal is efficiently managing its inventory by quickly selling and replacing its stock, which is generally a positive sign for the company's operations.

2. Receivables Turnover: The receivables turnover ratio for Fastenal has fluctuated between 5.86 and 7.33 over the analyzed period. A higher receivables turnover ratio signifies that Fastenal is efficiently collecting payments from its customers, reducing the risk of bad debts and improving the company's cash flow position.

3. Payables Turnover: Fastenal's payables turnover ratio has fluctuated between 17.28 and 22.81 during the analyzed period. A higher payables turnover ratio indicates that Fastenal is efficiently managing its accounts payable, possibly negotiating favorable credit terms with suppliers, and effectively utilizing trade credit.

4. Working Capital Turnover: Fastenal's working capital turnover ratio has shown some variation, ranging from 2.72 to 3.11. A higher working capital turnover ratio suggests that Fastenal is generating more revenue relative to its working capital investment, indicating efficient utilization of resources to drive sales.

In conclusion, Fastenal Company's activity ratios reflect a mix of efficiency and effectiveness in managing its inventory, receivables, payables, and working capital. Consistent monitoring and improvement in these ratios can help Fastenal enhance its operational performance and financial health over time.

Average number of days

Dec 31, 2024 Sep 30, 2024 Jun 30, 2024 Mar 31, 2024 Dec 31, 2023 Sep 30, 2023 Jun 30, 2023 Mar 31, 2023 Dec 31, 2022 Sep 30, 2022 Jun 30, 2022 Mar 31, 2022 Dec 31, 2021 Sep 30, 2021 Jun 30, 2021 Mar 31, 2021 Dec 31, 2020 Sep 30, 2020 Jun 30, 2020 Mar 31, 2020
Days of inventory on hand (DOH) days 99.30 95.32 92.94 93.08 95.35 95.49 99.36 106.57 112.57 113.29 116.52 116.67 115.89 109.70 106.52 104.64 108.23 110.04 115.56 113.48
Days of sales outstanding (DSO) days 53.61 58.58 59.31 60.02 54.08 58.77 59.17 58.92 53.09 59.58 61.45 62.24 54.75 59.44 58.30 54.58 49.78 54.78 58.25 56.55
Number of days of payables days 17.37 18.44 18.07 17.17 16.54 17.35 16.63 17.21 16.81 18.71 20.42 21.13 17.73 20.11 18.94 17.24 16.75 17.24 16.01 17.89

Based on the provided data, we can analyze the activity ratios of Fastenal Company as follows:

1. Days of Inventory on Hand (DOH):
The Days of Inventory on Hand measure how many days, on average, it takes for the company to sell its entire inventory. Over the period from March 31, 2020, to December 31, 2024, Fastenal's DOH fluctuated between 92.94 days and 116.67 days. A decreasing trend observed from March 31, 2023 (106.57 days) to December 31, 2024 (99.30 days) indicates improved inventory management efficiency.

2. Days of Sales Outstanding (DSO):
The Days of Sales Outstanding depict the average number of days it takes for the company to collect payments from its customers. Fastenal's DSO ranged from 49.78 days to 62.24 days during the same period. The company managed to reduce its DSO from June 30, 2022 (61.45 days) to December 31, 2024 (53.61 days), signifying a more efficient collections process.

3. Number of Days of Payables:
The Number of Days of Payables illustrates the average number of days it takes for Fastenal to pay its suppliers. The data shows that the number of days of payables varied between 16.01 days and 21.13 days. Fastenal slightly lengthened its payables period from June 30, 2022 (20.42 days) to December 31, 2024 (17.37 days), which could indicate changes in the company's payment policies or relationships with suppliers.

Overall, monitoring these activity ratios can provide insights into Fastenal Company's operational efficiency, inventory management, collection practices, and supplier relationships. Analyzing these ratios over time can help in assessing the company's effectiveness in managing working capital and optimizing cash flow.

Long-term

Dec 31, 2024 Sep 30, 2024 Jun 30, 2024 Mar 31, 2024 Dec 31, 2023 Sep 30, 2023 Jun 30, 2023 Mar 31, 2023 Dec 31, 2022 Sep 30, 2022 Jun 30, 2022 Mar 31, 2022 Dec 31, 2021 Sep 30, 2021 Jun 30, 2021 Mar 31, 2021 Dec 31, 2020 Sep 30, 2020 Jun 30, 2020 Mar 31, 2020
Fixed asset turnover 7.14 7.16 7.23 7.28 7.26 7.19 7.15 7.10 6.90 6.75 6.50 6.23 5.89 5.72 5.60 5.57 5.47 5.43 5.36 5.24
Total asset turnover 1.61 1.58 1.61 1.63 1.64 1.58 1.58 1.56 1.53 1.47 1.43 1.41 1.40 1.38 1.37 1.40 1.42 1.35 1.35 1.37

Fastenal Company's fixed asset turnover has been consistently increasing over the past years, indicating improved efficiency in generating sales from its fixed assets. This ratio has shown steady growth from 5.24 in March 2020 to 7.14 in December 2024.

On the other hand, the total asset turnover ratio has varied over the same period but has also displayed an overall increasing trend. Starting at 1.37 in March 2020, it reached 1.61 by December 2024.

Both ratios reflect the company's ability to efficiently utilize its assets to generate sales. The increasing trend in both ratios indicates that Fastenal is effectively managing and utilizing its assets to drive revenue growth.