GATX Corporation (GATX)

Short-term

Turnover ratios

Based on the provided data for GATX Corporation's activity ratios:

1. Inventory Turnover: The inventory turnover ratio for GATX Corporation has shown fluctuations over the years. It was 12.79 in December 2020 and decreased significantly to 10.02 by December 2022. However, the ratio improved slightly to 10.02 by December 2024. The sudden drop to 1.00 in June 2022 and 0.79 in December 2024 could indicate a potential issue with managing inventory levels effectively.

2. Receivables Turnover: The receivables turnover ratio for GATX Corporation indicates the efficiency of collecting receivables. The company saw a general upward trend from March 2020 to December 2022, with the ratio fluctuating between 14.79 and 18.48. However, there was a significant decrease to 7.96 by December 2024, which might suggest a delay in collecting outstanding receivables.

3. Payables Turnover: There is not enough data provided for the payables turnover ratio to analyze GATX Corporation's efficiency in paying its suppliers.

4. Working Capital Turnover: The working capital turnover ratio reflects how efficiently GATX Corporation is utilizing its working capital to generate sales. The ratio fluctuated over the years, with some periods showing better utilization than others. Notably, there were significant improvements in working capital turnover in the periods ending March 2022, March 2023, and June 2023, indicating better efficiency in generating sales relative to the working capital employed.

In conclusion, GATX Corporation's activity ratios show varying levels of efficiency in managing inventory, collecting receivables, and utilizing working capital to generate sales. Monitoring these ratios over time can provide insights into the company's operational performance and efficiency.

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Average number of days

Based on the data provided for GATX Corporation, we can analyze the activity ratios:

1. Days of Inventory on Hand (DOH):
- The trend in the DOH ratio shows fluctuation over the years.
- From December 31, 2020, to December 31, 2022, the DOH increased significantly, indicating that GATX may have been holding inventory for a longer period.
- Notably, there was a dramatic increase in DOH from June 30, 2022, to December 31, 2022, followed by a slight decrease by the end of 2023.
- The DOH as of December 31, 2024, was significantly high, suggesting potential inefficiencies in inventory management that may need attention.

2. Days of Sales Outstanding (DSO):
- The DSO ratio indicates the average number of days it takes for GATX to collect its accounts receivable.
- The trend in the DSO ratio shows a general decrease over the years, from March 31, 2020, to December 31, 2024.
- Lower DSO values are generally positive as they imply faster collections from customers, indicating effective credit policies and efficient receivables management.
- There was a slight increase in DSO from December 31, 2022, to December 31, 2024, signifying a potential slowdown in collections that may need monitoring.

3. Number of Days of Payables:
- The data provided does not include values for the number of days of payables, hence limiting the analysis of this activity ratio.
- Payables play a crucial role in working capital management, and the absence of this information hinders a comprehensive evaluation of GATX's payables management practices.

In conclusion, while the Days of Inventory on Hand and Days of Sales Outstanding ratios provide insights into GATX's inventory and accounts receivable management, the absence of data for the Number of Days of Payables limits a comprehensive analysis of the company's overall working capital efficiency. Monitoring and managing these activity ratios are essential for optimizing operational performance and financial health.

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Long-term

Based on the provided data, GATX Corporation's long-term activity ratios show a consistent trend over the years.

1. Fixed Asset Turnover: This ratio measures the efficiency of the company in generating sales revenue from its fixed assets. GATX Corporation's fixed asset turnover has been relatively stable around 0.15 to 0.18 over the years analyzed. A decreasing trend is observed from 0.18 in March 2020 to 0.15 in December 2024, indicating a slight decline in the company's ability to generate revenue from its fixed assets.

2. Total Asset Turnover: This ratio assesses how efficiently the company utilizes all its assets to generate sales. GATX Corporation's total asset turnover has fluctuated within the range of 0.12 to 0.14 during the review period. The ratio shows some variability, with a decreasing trend observed from 0.14 in March 2020 to 0.12 in December 2023, followed by a slight increase to 0.13 in December 2024.

Overall, the analysis suggests that while GATX Corporation maintains a stable performance in terms of fixed asset turnover, there is some fluctuation in its total asset turnover ratio, indicating potential changes in the company's asset utilization efficiency over time.