Green Plains Renewable Energy Inc (GPRE)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Inventory turnover | 18.27 | 16.24 | 13.43 | 7.90 | 12.06 |
| Receivables turnover | 34.59 | 33.33 | 23.39 | 34.21 | 21.32 |
| Payables turnover | 16.63 | 15.04 | 17.97 | 12.94 | 16.17 |
| Working capital turnover | 9.48 | 8.29 | 4.38 | 10.14 | 19.17 |
The activity ratios of Green Plains Inc over the past five years show varying trends in the efficiency of its operations:
1. Inventory Turnover:
- The inventory turnover ratio has shown an increasing trend from 2019 to 2023, indicating that Green Plains has been managing its inventory more efficiently.
- With a ratio of 14.38 in 2023, the company is able to turn over its inventory approximately 14 times during the year, which signifies an improvement in managing its inventory levels.
2. Receivables Turnover:
- The receivables turnover ratio has been relatively stable over the years, indicating that Green Plains consistently collects its accounts receivables efficiently.
- The company had a high ratio of 34.59 in 2023, implying that it collects its receivables around 34 times during the year, reflecting a strong credit control process.
3. Payables Turnover:
- The payables turnover ratio shows some fluctuations year over year, but overall, Green Plains has been able to manage its payables effectively.
- With a ratio of 16.63 in 2023, the company is paying its suppliers approximately 16 times during the year, suggesting good management of its accounts payable.
4. Working Capital Turnover:
- The working capital turnover ratio has shown a declining trend from 2019 to 2023, indicating a decrease in the efficiency of utilizing working capital to generate revenue.
- A ratio of 9.48 in 2023 means that Green Plains generates revenue approximately 9.48 times for every dollar of working capital invested, reflecting a decrease in operational efficiency over the years.
In conclusion, the activity ratios of Green Plains Inc demonstrate varying levels of efficiency in managing its inventory, receivables, payables, and working capital over the last five years. While improvements can be seen in inventory turnover and stability in receivables turnover and payables turnover, a decline in working capital turnover suggests a need for the company to focus on enhancing its operational efficiency and optimizing its use of working capital.
Average number of days
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 19.98 | 22.48 | 27.19 | 46.19 | 30.27 |
| Days of sales outstanding (DSO) | days | 10.55 | 10.95 | 15.61 | 10.67 | 17.12 |
| Number of days of payables | days | 21.95 | 24.26 | 20.31 | 28.21 | 22.57 |
Days of Inventory on Hand (DOH) measures how many days on average it takes for a company to sell its inventory. A lower DOH is generally favorable as it indicates efficient inventory management. Green Plains Inc's DOH has fluctuated over the past five years, with a notable decrease from 54.28 days in 2020 to 25.38 days in 2023, suggesting improved inventory turnover efficiency.
Days of Sales Outstanding (DSO) indicates the average number of days it takes for a company to collect revenue after a sale is made. Lower DSO is preferable as it signifies faster cash collection. Green Plains Inc has maintained relatively stable DSO over the years, ranging from 10.55 days in 2023 to 17.12 days in 2019. This consistency suggests effective accounts receivable management.
Number of Days of Payables measures how long a company takes to pay its suppliers. A higher number of days indicates that the company is taking longer to settle its payables, which can be advantageous for cash flow management. Green Plains Inc's days of payables have varied, with a peak of 28.21 days in 2020 and a low of 20.31 days in 2021. The downward trend from 2020 to 2021 may indicate a shift towards more prompt payment practices.
Overall, Green Plains Inc's activity ratios reflect improvements in inventory turnover efficiency and stable accounts receivable management practices. The company's management of payables has shown some variability, suggesting a need for continued monitoring and potentially optimizing payment terms to support cash flow objectives.
Long-term
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Fixed asset turnover | 3.23 | 3.56 | 3.16 | 2.40 | 2.92 |
| Total asset turnover | 1.70 | 1.73 | 1.31 | 1.22 | 1.42 |
The fixed asset turnover ratio for Green Plains Inc has been fluctuating over the past five years. It increased from 2.92 in 2019 to 3.56 in 2022 before decreasing to 3.23 in 2023. This ratio indicates that the company generated $3.23 in revenue for every dollar invested in fixed assets in 2023.
On the other hand, the total asset turnover ratio has also shown variability. It increased from 1.22 in 2020 to 1.73 in 2022, then decreased to 1.70 in 2023. This ratio reflects how efficiently the company is utilizing its total assets to generate revenue, with a value of 1.70 suggesting that for every dollar worth of assets owned, Green Plains Inc generated $1.70 in revenue in 2023.
Overall, the trend in both the fixed asset turnover and total asset turnover ratios indicates that Green Plains Inc has been effectively utilizing its assets to generate revenue, with some fluctuations in efficiency over the years. It is essential for the company to monitor and analyze these ratios to ensure efficient utilization of assets in the long term.