Federal Signal Corporation (FSS)

Activity ratios

Short-term

Turnover ratios

	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	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019
Inventory turnover	4.19	3.75	3.46	3.54	3.72	3.58	3.82	3.88	4.04	4.19	4.36	4.09	4.53	4.33	4.41	4.50	4.91	4.62	4.88	4.87
Receivables turnover	9.25	7.81	8.10	7.78	8.26	7.91	7.63	8.09	8.92	8.57	8.03	8.24	8.90	7.93	9.41	8.72	9.10	8.32	7.86	7.99
Payables turnover	19.08	15.03	13.53	11.77	15.05	12.72	12.74	12.01	14.27	13.86	12.61	11.74	16.22	11.97	11.91	11.62	13.82	12.38	11.87	11.29
Working capital turnover	4.60	4.15	3.84	4.10	4.09	4.08	4.32	4.47	4.66	3.94	4.62	4.72	4.40	4.44	4.79	4.82	6.09	5.49	5.69	6.30

Federal Signal Corp.'s inventory turnover has shown relative stability over the past eight quarters, ranging from 3.46 to 4.19. This indicates that the company efficiently manages its inventory levels, with an average of approximately 3.8 times per year.

The receivables turnover ratio has exhibited variability, fluctuating between 7.63 and 9.25. This suggests that the company collects its receivables at a rate of approximately 8.2 to 8.8 times per year, indicating prompt collection practices.

In terms of payables turnover, Federal Signal Corp. has demonstrated consistency, with the ratio steadily increasing from 11.77 to 19.08. This implies that the company is paying off its suppliers more frequently, with an average turnover rate of around 14.7 times per year.

The working capital turnover ratio has also shown stability, ranging from 3.84 to 4.60. This indicates that the company effectively utilizes its working capital to generate sales, with an average turnover rate of approximately 4.2 times per year.

Overall, the activity ratios of Federal Signal Corp. suggest efficient management of inventory, receivables, payables, and working capital, contributing to the company's operational effectiveness and financial performance.

Average number of days

		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	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019
Days of inventory on hand (DOH)	days	87.03	97.29	105.58	103.03	98.02	101.98	95.44	94.06	90.45	87.10	83.70	89.34	80.66	84.30	82.78	81.11	74.30	79.06	74.80	74.94
Days of sales outstanding (DSO)	days	39.45	46.74	45.08	46.93	44.21	46.14	47.83	45.14	40.92	42.59	45.47	44.28	40.99	46.01	38.78	41.84	40.11	43.84	46.43	45.69
Number of days of payables	days	19.13	24.29	26.97	31.01	24.25	28.70	28.64	30.40	25.58	26.33	28.94	31.09	22.50	30.49	30.64	31.41	26.41	29.48	30.74	32.33

Activity ratios are used to measure how efficiently a company manages its assets, liabilities, and working capital. In the case of Federal Signal Corp., we can analyze the following activity ratios:

1. Days of Inventory on Hand (DOH):
- The average days of inventory on hand have been fluctuating over the past eight quarters, ranging from a low of 87.03 days to a high of 105.58 days.
- Generally, a lower DOH indicates that the company is selling its inventory quickly, while a higher DOH suggests that inventory turnover is slower.
- Federal Signal Corp. should aim to reduce its DOH over time to free up capital tied up in inventory and improve cash flow.

2. Days of Sales Outstanding (DSO):
- DSO represents the average number of days it takes for the company to collect payment after a sale.
- The DSO for Federal Signal Corp. has varied from 39.45 days to 46.93 days over the past eight quarters.
- Lower DSO values indicate that the company is efficient in collecting payments from customers, while higher DSO values may point to potential issues with accounts receivable management.

3. Number of Days of Payables:
- This ratio shows the average number of days it takes for the company to pay its suppliers or creditors.
- Federal Signal Corp.'s days of payables have ranged from 19.13 days to 31.01 days in the last eight quarters.
- A shorter payment period may indicate strong bargaining power with suppliers, but it could also suggest a strained relationship. Conversely, a longer payment period may signal liquidity issues or financial distress.

In conclusion, Federal Signal Corp. should actively monitor and manage its activity ratios to ensure efficient use of resources, timely collection of receivables, and effective management of payables to enhance overall financial performance and operational efficiency.

Long-term

	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	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019
Fixed asset turnover	9.03	8.85	8.28	8.24	8.00	7.87	7.53	7.42	8.55	10.85	10.53	9.99	10.58	10.89	11.63	12.57	13.29	14.63	17.07	17.56
Total asset turnover	1.06	1.01	0.94	0.94	0.94	0.92	0.90	0.89	0.89	0.92	0.92	0.89	0.94	0.94	0.97	1.01	1.05	1.01	1.05	1.04

Federal Signal Corp.'s long-term activity ratios provide insights into the company's efficiency in utilizing its fixed assets and total assets to generate revenue. The fixed asset turnover ratio has been relatively stable over the past eight quarters, ranging from 4.49 to 5.29. This indicates that the company is effectively leveraging its fixed assets to generate sales, with a higher ratio suggesting better efficiency in utilizing these long-term assets.

On the other hand, the total asset turnover ratio has shown a slight increasing trend, moving from 0.89 in Q1 2022 to 1.06 in Q4 2023. This indicates that Federal Signal Corp. is becoming more efficient in generating sales relative to its total assets over time. A higher total asset turnover ratio signifies that the company is efficiently utilizing all its assets, including fixed and current assets, to generate revenue.

Overall, the stable and relatively high fixed asset turnover ratio coupled with the increasing trend in total asset turnover ratio suggests that Federal Signal Corp. is effectively managing its long-term assets and maximizing their contribution to overall sales. This efficiency can positively impact the company's profitability and financial performance in the long run.