Genuine Parts Co (GPC)

Short-term

Turnover ratios

Inventory Turnover: Genuine Parts Co. has maintained a relatively stable inventory turnover ratio over the past eight quarters, averaging around 3.2. This indicates that the company is able to sell and replace its inventory approximately three times a year. A consistent inventory turnover ratio reflects effective management of inventory levels and could imply good demand for the company's products.

Receivables Turnover: The company's receivables turnover has shown some fluctuations but has generally been at a healthy level, averaging around 9.7 over the past eight quarters. This indicates that Genuine Parts Co. is efficient in collecting its accounts receivable, with customers paying their bills almost 10 times a year on average. A high receivables turnover ratio suggests effective credit policies and strong relationships with customers.

Payables Turnover: Genuine Parts Co. has seen a stable payables turnover ratio around 2.6 over the past eight quarters. This suggests that the company takes approximately 2.6 months to pay its suppliers, indicating a balanced approach in managing its accounts payable. A consistent payables turnover ratio may indicate good relationships with suppliers and effective cash flow management.

Working Capital Turnover: The company's working capital turnover ratio has varied significantly over the past two years, with peaks around 19.5 and troughs around 16.1. A higher working capital turnover ratio generally indicates efficient utilization of working capital to generate sales. Genuine Parts Co. seems to have effectively managed its working capital to support its operations and drive revenue growth, although periodic fluctuations may signal changes in business activity.

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Average number of days

The activity ratios of Genuine Parts Co. over the past eight quarters can provide insights into the company's efficiency in managing its inventory, collecting receivables, and paying its suppliers.

1. Days of Inventory on Hand (DOH):
- DOH measures the number of days a company holds inventory before it is sold. A lower DOH indicates better inventory management.
- Genuine Parts Co.'s DOH has fluctuated over the quarters, ranging from 110.57 days to 120.27 days. Overall, the company appears to maintain its inventory for around 110-120 days.

2. Days of Sales Outstanding (DSO):
- DSO represents the average number of days it takes a company to collect payment after a sale. Lower DSO values suggest efficient accounts receivable management.
- Genuine Parts Co.'s DSO has varied between 35.15 days and 40.75 days. The company seems to collect receivables within approximately 35-40 days on average.

3. Number of Days of Payables:
- This ratio shows the average number of days a company takes to pay its suppliers. A longer period may indicate favorable credit terms or slow payments.
- Genuine Parts Co.'s days of payables range from 135.33 days to 148.92 days. The company generally takes around 135-145 days to pay its suppliers.

Overall, Genuine Parts Co.'s activity ratios suggest that the company has been maintaining its inventory for a moderate period, efficiently managing accounts receivable, and taking a reasonable amount of time to pay its suppliers. Further analysis and comparison with industry benchmarks could provide a better understanding of the company's operational efficiency.

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Long-term

Genuine Parts Co.'s long-term activity ratios provide insights into the efficiency of the company's utilization of fixed assets and total assets. The fixed asset turnover ratio has shown a declining trend from Q1 2022 to Q4 2023, indicating a decrease in the company's ability to generate sales from its fixed assets over time. However, the ratio remains relatively high, indicating that Genuine Parts Co. is still efficient in generating revenue from its fixed assets.

On the other hand, the total asset turnover ratio has fluctuated slightly over the same period, with some variation between quarters. This ratio measures the company's overall efficiency in generating sales from all assets, including fixed and current assets. Genuine Parts Co. demonstrates a consistent ability to generate sales from its total assets, albeit with some variations in performance.

Overall, while there has been a slight decline in the efficiency of utilizing fixed assets, Genuine Parts Co. maintains a satisfactory level of efficiency in generating sales from both fixed and total assets, reflecting a stable performance in terms of asset turnover over the analyzed period.