Greenbrier Companies Inc (GBX)

Short-term

Turnover ratios

Greenbrier Cos., Inc.'s activity ratios provide insights into the company's efficiency in managing its inventory, receivables, payables, and working capital. The inventory turnover has increased steadily over the past five years, reaching 4.25 in 2023 from 3.28 in 2022. This indicates that the company is selling its inventory more frequently, which could be a positive sign of efficient inventory management.

Similarly, the receivables turnover has also shown consistent improvement, reaching 6.89 in 2023 from 5.50 in 2022. This suggests that the company is collecting its receivables at a faster rate, potentially improving its cash flow and reducing the risk of bad debts.

In terms of payables turnover, Greenbrier has been effectively managing its payables, with a notable increase in the turnover ratio from 5.72 in 2021 to 8.83 in 2023. This indicates that the company is paying its suppliers at a faster rate, which could improve its credit standing and strengthen supplier relationships.

The working capital turnover has also seen a steady increase over the years, reaching 4.53 in 2023 from 2.90 in 2022. This suggests that the company is utilizing its working capital more efficiently to generate sales revenue.

Overall, the increasing trend in these activity ratios reflects Greenbrier's improving efficiency in managing its operations and resources. However, further analysis in conjunction with other financial metrics can provide a more comprehensive understanding of the company's overall financial performance and position.

---

Average number of days

Days of inventory on hand (DOH) measures how efficiently a company manages its inventory. A lower number is generally more favorable as it indicates that the company is selling its inventory relatively quickly. Greenbrier Cos., Inc. has shown improvement in this metric over the past two years, with a reduction from 138.07 days in 2021 to 85.82 days in 2023. However, the current level is still higher compared to 2020 and 2019.

Days of sales outstanding (DSO) measures how long it takes for a company to collect cash from its credit sales. A lower DSO is generally preferred as it indicates faster collection of receivables. Greenbrier Cos., Inc. has shown improvement in this metric, with a decrease from 87.40 days in 2021 to 52.95 days in 2023. This indicates a positive trend in the company's ability to collect cash from its sales.

Number of days of payables measures how long a company takes to pay its suppliers. An increase in this ratio could imply better cash flow management, as the company retains cash for a longer period before paying its suppliers. Greenbrier Cos., Inc. experienced an increase in this metric from 22.29 days in 2020 to 41.35 days in 2023, indicating a less aggressive approach to managing payables.

Overall, these activity ratios depict mixed performance for Greenbrier Cos., Inc. While there have been improvements in DSO and some volatility in payables, the company has shown mixed performance in the management of its inventory. It will be important for the company to focus on optimizing inventory turnover and effectively managing its payables in order to improve its overall working capital efficiency.

---

Long-term

The long-term activity ratios for Greenbrier Cos., Inc. depict the efficiency of the company in utilizing its long-term assets to generate sales. The fixed asset turnover, which measures the efficiency of using fixed assets to generate revenue, has fluctuated over the years. In 2023, the fixed asset turnover increased to 2.44 from 2.10 in 2022, indicating an improvement in the company's ability to generate sales from its fixed assets.

Conversely, the total asset turnover, reflecting the company's ability to generate sales from all its assets, also showed an improvement in 2023. The total asset turnover increased to 0.99 from 0.77 in 2022. This suggests that the company has become more efficient in using its total assets to generate sales.

Overall, the increasing trend in both fixed asset turnover and total asset turnover from 2022 to 2023 indicates a positive performance in utilizing long-term assets to generate sales. However, it's important to assess these ratios in conjunction with other financial metrics and industry benchmarks for a comprehensive analysis.