Warrior Met Coal Inc (HCC)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Inventory turnover | 6.23 | 6.14 | 11.76 | 6.38 | 9.08 |
| Receivables turnover | 15.43 | 11.16 | 8.03 | 8.87 | 11.20 |
| Payables turnover | 31.62 | 24.25 | 20.73 | 12.81 | 19.15 |
| Working capital turnover | 1.85 | 1.70 | 2.07 | 2.64 | 4.06 |
Warrior Met Coal Inc's activity ratios indicate the efficiency with which the company manages its assets and liabilities to generate revenue.
1. Inventory turnover:
- Warrior Met Coal's inventory turnover has fluctuated over the past five years, ranging from 4.79 to 9.78, with a slight increase in 2023 to 5.15. This ratio suggests that the company is able to sell and replace its inventory multiple times during the year, indicating efficient inventory management.
2. Receivables turnover:
- The receivables turnover ratio has shown a generally increasing trend over the years, indicating that Warrior Met Coal is collecting its receivables more effectively. A higher ratio means that the company is able to convert its accounts receivable into cash quickly.
3. Payables turnover:
- Warrior Met Coal's payables turnover has also been on an upward trend, reaching 26.15 in 2023. This suggests that the company is paying its suppliers more frequently, which could indicate good relationships with suppliers and potential negotiating power.
4. Working capital turnover:
- The working capital turnover ratio has decreased over the years from 4.03 in 2019 to 1.82 in 2023. This decline indicates that the company is generating less revenue per dollar of working capital employed, which could signal inefficiencies in its working capital management.
Overall, Warrior Met Coal Inc's activity ratios show that the company has generally improved its efficiency in managing inventory, receivables, and payables over the years. However, the decreasing trend in working capital turnover warrants further analysis to understand the potential impact on profitability and operational effectiveness.
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 | 58.59 | 59.41 | 31.03 | 57.24 | 40.18 |
| Days of sales outstanding (DSO) | days | 23.66 | 32.70 | 45.43 | 41.16 | 32.59 |
| Number of days of payables | days | 11.54 | 15.05 | 17.61 | 28.50 | 19.06 |
Warrior Met Coal Inc's Days of Inventory on Hand (DOH) have fluctuated over the past five years, with a significant increase from 2019 to 2020 followed by a decrease in 2021 and another increase in 2022. In 2023, the DOH improved slightly compared to the previous year but remains relatively high at 70.84 days, indicating that the company holds inventory for an average of about 71 days before selling it.
The Days of Sales Outstanding (DSO) have demonstrated variability as well, with a notable spike in 2021 followed by a decline in 2022 and a further decrease in 2023. The current DSO stands at 24.04 days, reflecting the average number of days it takes for Warrior Met Coal to collect its accounts receivable, a lower figure compared to the past two years.
The Number of Days of Payables for Warrior Met Coal has shown a general decreasing trend from 2019 to 2023, indicating the company is taking less time to pay its suppliers. The current level of 13.96 days suggests that Warrior Met Coal is efficient in managing its accounts payables, paying its obligations within approximately 14 days.
Overall, Warrior Met Coal Inc's activity ratios suggest fluctuations in inventory management, improvements in accounts receivable collection efficiency, and a reduction in the time taken to pay suppliers. Continued monitoring and analysis of these ratios will be essential to assess the company's operational performance and efficiency in managing its working capital.
Long-term
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Fixed asset turnover | 1.53 | 2.59 | 1.98 | 1.33 | 2.26 |
| Total asset turnover | 0.72 | 0.86 | 0.71 | 0.56 | 0.95 |
Warrior Met Coal Inc's long-term activity ratios provide insights into the efficiency of the company in utilizing its assets to generate revenue. The fixed asset turnover ratio has fluctuated over the past five years. In 2023, the ratio decreased to 1.33 from 2.10 in 2022, indicating that Warrior Met Coal generated $1.33 of sales for every $1 invested in fixed assets. This decrease in efficiency may suggest a potential underutilization or aging of fixed assets in the company's operations.
Similarly, the total asset turnover ratio also shows variability over the period. In 2023, the total asset turnover ratio declined to 0.71 from 0.86 in 2022. This ratio indicates that Warrior Met Coal generated $0.71 in sales for every $1 of total assets. The declining trend in this ratio suggests that the company may not be efficiently utilizing its total assets to generate revenue.
Overall, the long-term activity ratios of Warrior Met Coal Inc highlight fluctuations in asset utilization efficiency over the past five years. The decreasing trend in both fixed asset turnover and total asset turnover ratios indicates potential inefficiencies in asset management and revenue generation that may require further analysis and corrective actions to improve the company's operational performance.