General Dynamics Corporation (GD)

Activity ratios

Short-term

Turnover ratios

	Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Inventory turnover	0.36	0.38	0.52	0.59	0.53
Receivables turnover	4.25	3.84	3.34	3.33	3.39
Payables turnover	1.03	1.06	0.97	0.99	1.04
Working capital turnover	7.27	5.89	6.89	6.40	6.80

General Dynamics Corporation's activity ratios provide insights into the efficiency of its operations.

1. Inventory Turnover:
- General Dynamics' inventory turnover has fluctuated over the years, decreasing from 0.53 in 2020 to 0.36 in 2024. This indicates that the company is selling its inventory at a decreasing rate. A lower inventory turnover may suggest excess inventory on hand or challenges in selling products efficiently.

2. Receivables Turnover:
- The receivables turnover for General Dynamics has shown a positive trend, increasing from 3.39 in 2020 to 4.25 in 2024. This suggests that the company is collecting its receivables more quickly over time, which is a positive sign for cash flow management and liquidity.

3. Payables Turnover:
- The payables turnover ratio has been relatively stable, ranging from 0.97 to 1.06 over the years. This indicates that General Dynamics is managing its accounts payable efficiently, with the ability to pay off its suppliers in a timely manner.

4. Working Capital Turnover:
- The working capital turnover ratio has shown variability, with a peak of 7.27 in 2024. A higher working capital turnover ratio indicates that the company is generating revenue more efficiently with its working capital. This improving trend suggests that General Dynamics is utilizing its resources effectively to drive sales.

In conclusion, while General Dynamics may face challenges in managing its inventory turnover, the company demonstrates strengths in collecting receivables, managing payables, and utilizing working capital to support its revenue generation.

Average number of days

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Days of inventory on hand (DOH)	days	1,027.58	951.66	700.31	621.72	683.04
Days of sales outstanding (DSO)	days	85.86	94.99	109.32	109.48	107.65
Number of days of payables	days	353.38	343.37	376.41	368.73	350.97

General Dynamics Corporation's activity ratios show mixed trends over the years.

1. Days of Inventory on Hand (DOH):
- The DOH decreased from 2020 to 2021, indicating the company managed its inventory more efficiently.
- However, from 2021 to 2024, the DOH increased significantly, suggesting a potential issue with inventory management. The company might be holding excess inventory, tying up capital.

2. Days of Sales Outstanding (DSO):
- The DSO remained relatively consistent from 2020 to 2022, indicating stability in collecting accounts receivable.
- A significant decrease in DSO from 2022 to 2024 is a positive sign, implying that the company is collecting payments from customers more quickly.

3. Number of Days of Payables:
- The number of days of payables increased from 2020 to 2022, suggesting the company took longer to pay its suppliers.
- In 2023, there was a decrease in the days of payables, which may indicate improved liquidity management.

Overall, monitoring these activity ratios is crucial for assessing General Dynamics Corporation's efficiency in managing its working capital and operational cycle. A balance between inventory management, accounts receivable collection, and payables is essential for optimizing cash flow and overall financial performance.

Long-term

	Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Fixed asset turnover	7.38	6.82	6.68	7.10	7.44
Total asset turnover	0.85	0.77	0.76	0.77	0.74

General Dynamics Corporation's long-term activity ratios indicate how efficiently the company is utilizing its assets to generate revenue.

1. Fixed Asset Turnover:
- General Dynamics' fixed asset turnover has shown a decreasing trend from 7.44 in 2020 to 6.82 in 2023, with a slight increase to 7.38 in 2024. This ratio measures the company's ability to generate sales from its investment in fixed assets.
- Although there was a decline in 2022 and 2023, the slight improvement in 2024 suggests a potential increase in productivity and efficiency in utilizing fixed assets.

2. Total Asset Turnover:
- The total asset turnover ratio for General Dynamics has been relatively stable, ranging from 0.74 in 2020 to 0.85 in 2024. This ratio indicates the company's ability to generate sales from its total assets.
- The increase in total asset turnover from 2020 to 2024 suggests that General Dynamics has been more effective in utilizing its total assets to drive revenue growth.

Overall, based on the analysis of the long-term activity ratios, General Dynamics Corporation has shown varying levels of efficiency in utilizing its assets to generate sales over the years. The company's management may need to continue monitoring these ratios to ensure sustainable and efficient asset utilization in the future.