Granite Construction Incorporated (GVA)

Short-term

Turnover ratios

Granite Construction Incorporated's activity ratios provide insight into the company's efficiency in managing its assets and liabilities.

1. Inventory Turnover:
- The inventory turnover ratio indicates how many times a company's inventory is sold and replaced over a period.
- Granite Construction's inventory turnover has been fluctuating over the years, ranging from a high of 43.65 in 2021 to a low of 29.96 in 2023.
- Generally, a higher inventory turnover ratio is preferred as it signifies that the company is efficiently managing its inventory.

2. Receivables Turnover:
- The receivables turnover ratio measures how many times a company collects its accounts receivable in a given period.
- In this case, the data shows that Granite Construction does not have receivables turnover information available for analysis.
- A high receivables turnover ratio indicates that the company is efficient in collecting outstanding payments from its customers.

3. Payables Turnover:
- The payables turnover ratio evaluates how quickly a company pays off its suppliers.
- Similar to receivables turnover, there is no specific data provided for payables turnover for Granite Construction.
- A higher payables turnover ratio is generally favorable as it suggests that the company is managing its payables effectively.

4. Working Capital Turnover:
- The working capital turnover ratio measures how efficiently a company utilizes its working capital to generate revenue.
- Granite Construction's working capital turnover has varied over the years, with a peak of 6.96 in 2020 and a subsequent decline in 2021.
- A higher working capital turnover indicates that the company is effectively using its working capital to support its operations and generate sales.

In conclusion, a detailed analysis of Granite Construction's activity ratios shows fluctuations in inventory turnover and working capital turnover, while data on receivables and payables turnover is not available. These ratios provide valuable insights into the company's operational efficiency and management of working capital.

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Average number of days

The analysis of Granite Construction Incorporated's activity ratios reveals the following trends:

1. Days of inventory on hand (DOH) has shown fluctuating numbers over the years, with a decrease from 9.34 days in 2020 to 8.36 days in 2021, followed by an increase to 10.81 days in 2022. Subsequently, there was a further increase to 12.18 days in 2023 before a slight decrease to 11.49 days in 2024. These numbers indicate the average number of days it takes for the company to sell its inventory. A lower number suggests efficient inventory management, while a higher number may indicate potential issues with inventory turnover.

2. Days of sales outstanding (DSO) data is unavailable for all the years provided. DSO measures the average number of days it takes for a company to collect revenue after a sale has been made. Without this data, it is challenging to assess the company's efficiency in collecting accounts receivable.

3. The number of days of payables data is also missing for all the years. This ratio typically measures how many days it takes for a company to pay its suppliers. Without this information, it is challenging to evaluate Granite Construction's payment practices and liquidity management.

In conclusion, based on the available data, Granite Construction Incorporated's inventory management seems to have experienced fluctuations over the years, while information on its accounts receivable and accounts payable management is not provided for a comprehensive analysis of the company's activity ratios.

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Long-term

Granite Construction Incorporated has shown a consistent improvement in its fixed asset turnover ratio over the years, indicating the company's efficiency in generating sales revenue from its fixed assets. The ratio has increased from 6.05 in 2020 to 6.48 in 2022. This suggests that Granite Construction is effectively utilizing its fixed assets to generate revenue.

When looking at the total asset turnover ratio, there seems to be some fluctuation in the company's ability to generate sales using its total assets. The ratio decreased from 1.50 in 2020 to 1.21 in 2021, indicating a decline in the efficiency of the company in generating sales from its total assets. However, there was an improvement in 2022 with a ratio of 1.52, suggesting a recovery in utilizing total assets efficiently to generate revenue.

Overall, while Granite Construction has shown strong fixed asset turnover ratios, indicating efficiency in utilizing fixed assets, there are fluctuations in the total asset turnover ratios. It is essential for the company to focus on optimizing the use of its total assets to improve overall performance and profitability in the long term.