Comfort Systems USA Inc (FIX)

Short-term

Turnover ratios

Comfort Systems USA, Inc.'s activity ratios provide insight into the efficiency of the company's operations over the past five years.

1. Inventory Turnover: The inventory turnover ratio has been declining over the years, indicating that the company is holding onto its inventory for a longer period before selling it. This may suggest issues such as slow sales or overstocking.

2. Receivables Turnover: The receivables turnover ratio has fluctuated slightly over the years but has generally remained stable. A lower receivables turnover ratio may indicate that the company is taking longer to collect its accounts receivable, potentially impacting cash flow.

3. Payables Turnover: The payables turnover ratio has also fluctuated but has generally shown consistency. A higher payables turnover ratio suggests that the company is paying its suppliers more quickly, which could indicate good relationships with suppliers or efficient cash management practices.

4. Working Capital Turnover: The working capital turnover ratio has shown an increasing trend over the years, implying that the company is generating more revenue for every dollar of working capital invested. This suggests improved efficiency in utilizing working capital to generate sales.

Overall, while some activity ratios have shown fluctuations, it is essential for Comfort Systems USA, Inc. to analyze the reasons behind these changes and take appropriate actions to improve operational efficiency and optimize working capital management.

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Average number of days

Comfort Systems USA, Inc.'s activity ratios provide insights into the efficiency of its inventory management, accounts receivable collection, and accounts payable payment. The days of inventory on hand (DOH) have increased steadily from 1.74 days in 2019 to 5.67 days in 2023. This indicates that the company is holding onto its inventory for a longer period, which could suggest slower sales, overstocking, or inefficiencies in managing inventory levels.

The days of sales outstanding (DSO) show a fluctuating trend, with an increase to 111.19 days in 2023 from 99.78 days in 2019. This suggests that the company is taking longer to collect payments from its customers, potentially affecting its cash flow and liquidity.

On the other hand, the number of days of payables has been relatively stable, ranging from 32.26 days in 2020 to 37.04 days in 2021. This indicates that Comfort Systems USA, Inc. has been consistent in managing its payment obligations to suppliers.

Overall, the increasing DOH and DSO ratios may indicate potential issues with inventory management and accounts receivable collection efficiency, which could impact the company's working capital and overall financial health. The stability of the payables turnover ratio suggests that the company has been managing its payables effectively.

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Long-term

Comfort Systems USA, Inc.'s long-term activity ratios indicate how efficiently the company utilizes its assets to generate sales. The fixed asset turnover has been relatively stable over the past five years, with a high of 28.76 in 2022 and a low of 23.82 in 2019. This ratio measures how well the company generates sales from its investment in fixed assets, such as property, plant, and equipment. A higher fixed asset turnover ratio indicates that Comfort Systems USA is effectively using its fixed assets to generate revenue.

In contrast, the total asset turnover ratio has shown some fluctuations over the same period, with a peak of 1.74 in 2019 and a low of 1.39 in 2021. This ratio evaluates how efficiently the company generates sales from all its assets, including fixed and current assets. A higher total asset turnover ratio suggests that the company is efficiently utilizing both its fixed and current assets to generate revenue.

Overall, Comfort Systems USA, Inc. appears to have a strong operational efficiency in utilizing its assets to generate sales, as indicated by its relatively high fixed asset turnover and total asset turnover ratios over the past five years. These ratios suggest that the company is effectively managing and utilizing its assets to drive revenue growth.