GATX Corporation (GATX)

Short-term

Turnover ratios

Inventory turnover for GATX Corp. has remained consistently at 0.00 over the past five years, indicating either very low inventory levels or potential inefficiencies in managing inventory.

The receivables turnover ratio has fluctuated between 6.46 and 8.50 over the same period, showing how frequently the company collects on its credit sales. A decreasing trend in receivables turnover may suggest potential issues with credit policies or an increase in credit sales outstanding.

Unfortunately, data for payables turnover is not available, limiting insights into the company's efficiency in managing its trade payables.

The working capital turnover ratio, which measures how effectively a company is using its working capital to generate sales, has shown a declining trend from 6.18 in 2019 to 2.78 in 2023. This may indicate a decrease in operational efficiency or a need for more working capital to support sales growth.

Overall, the analysis of GATX Corp.'s activity ratios demonstrates mixed performance in managing inventory, receivables, and working capital efficiency over the past five years, suggesting potential areas for improvement in operational and financial management.

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Average number of days

Days of inventory on hand (DOH) cannot be calculated as the necessary data is not provided.

Days of sales outstanding (DSO) for GATX Corp. have shown an increasing trend over the past five years, with 56.50 days in 2023, compared to 46.45 days in 2022. This indicates that the company is taking longer to collect its accounts receivable, which could potentially impact its cash flow and liquidity.

The number of days of payables data is missing, therefore, it is not possible to analyze the company's payment practices and the efficiency of managing its trade payables.

Overall, an increasing trend in Days of Sales Outstanding (DSO) suggests that GATX Corp. may need to focus on improving its accounts receivable collection processes to enhance its liquidity position in the future.

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Long-term

The long-term activity ratios for GATX Corp., as reflected by the fixed asset turnover and total asset turnover ratios, indicate the efficiency with which the company is utilizing its assets to generate sales revenues.

1. Fixed Asset Turnover:
- The fixed asset turnover ratio has been consistently low over the past five years, ranging between 0.15 and 0.21. This suggests that GATX Corp. is generating a relatively lower level of sales revenue for every dollar invested in fixed assets.
- The decline in the fixed asset turnover ratio from 0.21 in 2019 to 0.15 in 2023 indicates a potential decrease in the efficiency of utilizing fixed assets to generate sales revenues, which could be a concerning trend for the company.
- A low fixed asset turnover ratio may indicate underutilization or inefficiency in managing fixed assets, possibly due to factors such as overcapacity, obsolete assets, or lower demand for the company's services.

2. Total Asset Turnover:
- The total asset turnover ratio for GATX Corp. has also shown a declining trend over the past five years, decreasing from 0.17 in 2019 to 0.12 in 2023. This indicates that the company is generating lower sales revenues relative to its total asset base.
- A decreasing total asset turnover ratio could imply that GATX Corp. may be facing challenges in generating sales growth in proportion to its total assets, potentially signaling inefficiencies in the utilization of both fixed and current assets.
- The declining trend in total asset turnover may be a cause for concern as it could indicate declining productivity and effectiveness in utilizing assets to drive revenue growth, potentially impacting the company's overall profitability and financial performance.

In conclusion, the long-term activity ratios of GATX Corp., as indicated by the fixed asset turnover and total asset turnover, suggest potential efficiency challenges in asset management and utilization, which may require further evaluation and strategic measures to improve operational performance and enhance overall profitability.