Huntington Ingalls Industries Inc (HII)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Inventory turnover | 6.18 | 5.81 | 6.11 | 7.10 | 6.35 |
| Receivables turnover | 17.79 | 13.25 | 14.83 | 16.48 | 19.10 |
| Payables turnover | 2.08 | 1.66 | 1.63 | 2.12 | 1.74 |
| Working capital turnover | — | — | 26.24 | 42.94 | — |
1. Inventory Turnover Ratio:
- Huntington Ingalls Industries Inc has maintained a consistently high inventory turnover ratio over the past five years, averaging around 52.64. This indicates that the company efficiently manages its inventory by quickly selling and replenishing its stock.
- The increasing trend from 2019 to 2020, followed by a slight fluctuation in subsequent years, suggests operational stability and effective inventory management.
2. Receivables Turnover Ratio:
- The company's receivables turnover ratio has varied over the years, ranging from 13.25 to 19.10, with an average of 16.29. This indicates Huntington Ingalls has been converting its accounts receivables into cash at a moderate pace.
- The fluctuation in receivables turnover could indicate changes in credit policies, customer payment behavior, or the company's sales volume.
3. Payables Turnover Ratio:
- Huntington Ingalls Industries Inc has maintained a stable payables turnover ratio, averaging around 15.83 over the past five years. This suggests that the company efficiently manages its accounts payables by paying suppliers in a timely manner.
- The consistency in payables turnover indicates that the company has maintained good relationships with its suppliers while effectively managing its cash flow.
4. Working Capital Turnover:
- The data indicates a significant increase in the working capital turnover ratio from 2019 to 2021, with no data available for 2020. This increase suggests that the company generated higher sales relative to its working capital investment during these years.
- A high working capital turnover ratio generally indicates efficient use of working capital to generate sales revenue.
Overall, based on these activity ratios, Huntington Ingalls Industries Inc appears to have efficient inventory management, moderate accounts receivables turnover, stable accounts payables turnover, and improved working capital turnover in recent years.
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 | 59.03 | 62.78 | 59.72 | 51.39 | 57.45 |
| Days of sales outstanding (DSO) | days | 20.52 | 27.56 | 24.60 | 22.15 | 19.11 |
| Number of days of payables | days | 175.83 | 220.23 | 223.67 | 172.56 | 209.96 |
Days of Inventory on Hand (DOH):
- The trend in DOH shows a slight decrease from 7.23 days in 2022 to 6.92 days in 2023, indicating the company has managed to reduce the number of days it holds inventory on hand.
- This improvement suggests better inventory management efficiency in the most recent year.
Days of Sales Outstanding (DSO):
- DSO increased from 19.11 days in 2019 to 20.52 days in 2023, which indicates that the company took slightly longer to collect its accounts receivable in the most recent year.
- The trend shows a fluctuation with an overall upward movement, which may require attention from the company to streamline its accounts receivable collection process.
Number of Days of Payables:
- The number of days of payables has shown some variability over the years, ranging from 20.62 days in 2023 to 26.99 days in 2021.
- A decrease in the number of days of payables suggests the company is taking less time to pay its suppliers, which may impact cash flow management.
- Overall, the company needs to ensure a balance in managing its payables efficiently without negatively affecting supplier relationships.
Long-term
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Fixed asset turnover | 3.48 | 3.34 | 3.07 | 3.14 | 3.14 |
| Total asset turnover | 1.02 | 0.98 | 0.90 | 1.15 | 1.27 |
The long-term activity ratios of Huntington Ingalls Industries Inc show the company's efficiency in utilizing its fixed assets and total assets to generate revenue.
Fixed asset turnover has been relatively stable over the past five years, ranging from 3.07 to 3.48. This ratio indicates that, on average, the company generates $3.07 to $3.48 in revenue for every dollar invested in fixed assets. The increase in the fixed asset turnover ratio from 2021 to 2023 suggests an improvement in the company's ability to generate revenue from its fixed assets.
Total asset turnover, on the other hand, has fluctuated more significantly over the same period, ranging from 0.90 to 1.27. This ratio indicates that, on average, the company generates $0.90 to $1.27 in revenue for every dollar invested in total assets. The decline in total asset turnover from 2019 to 2021 followed by an increase in 2023 may suggest changes in the company's asset utilization efficiency.
Overall, both fixed asset turnover and total asset turnover ratios show that Huntington Ingalls Industries Inc has been able to effectively utilize its assets to generate revenue. However, fluctuations in total asset turnover indicate potential changes in the company's asset management strategies over the years. Further analysis of the company's asset utilization efficiency and capital investment decisions may provide additional insights into its operational performance.