Harley-Davidson Inc (HOG)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Inventory turnover | 4.53 | 4.35 | 3.58 | 5.08 | 5.79 |
| Receivables turnover | — | — | — | — | — |
| Payables turnover | — | — | — | — | — |
| Working capital turnover | 3.60 | 3.28 | 4.73 | 4.42 | 2.18 |
Based on the provided data for Harley-Davidson Inc, let's analyze the activity ratios:
1. Inventory Turnover:
- The inventory turnover ratio indicates how efficiently the company manages its inventory. A higher ratio suggests that inventory is selling well.
- The inventory turnover ratio has fluctuated over the years: from 5.79 in 2020 to 3.58 in 2022, and then gradually increasing to 4.53 in 2024.
- A decrease in the inventory turnover ratio (such as in 2022) may indicate slower sales or excess inventory, while an increase over time (as seen from 2022 to 2024) could imply improved inventory management or higher demand for products.
2. Receivables Turnover:
- The absence of data for receivables turnover indicates that specific ratio calculations related to accounts receivable are not available or significant for analysis.
- Receivables turnover ratio measures how effectively a company is collecting outstanding receivables from customers. Without this data, it's difficult to assess the company's efficiency in collecting receivables.
3. Payables Turnover:
- Similar to receivables turnover, the absence of data for payables turnover suggests that information related to accounts payable turnover is not provided or may be immaterial for analysis.
- Payables turnover ratio evaluates how quickly a company pays its bills to suppliers. Without this data, it's challenging to evaluate the company's payment practices and supplier relationships.
4. Working Capital Turnover:
- The working capital turnover ratio reflects how efficiently the company utilizes its working capital to generate sales revenue.
- The ratio has shown varying trends, starting at 2.18 in 2020, peaking at 4.73 in 2022, and then declining to 3.60 in 2024.
- A higher working capital turnover ratio (as seen in 2022) suggests that the company efficiently uses its working capital to drive sales. A decrease in this ratio over time (as observed from 2022 to 2024) could indicate changes in operating efficiency or sales patterns.
In summary, Harley-Davidson Inc's activity ratios show fluctuations and trends in inventory management efficiency and working capital turnover, highlighting the company's operational performance and potential areas for improvement. The lack of data for receivables and payables turnover limits a comprehensive assessment of the company's full working capital cycle.
Average number of days
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 80.59 | 83.82 | 101.98 | 71.79 | 63.06 |
| Days of sales outstanding (DSO) | days | — | — | — | — | — |
| Number of days of payables | days | — | — | — | — | — |
Harley-Davidson Inc's activity ratios reflect the efficiency of the company's inventory management, accounts receivable collection, and payments to suppliers.
1. Days of Inventory on Hand (DOH):
- The trend in Harley-Davidson Inc's DOH shows an increase from 63.06 days in 2020 to 80.59 days in 2024. DOH indicates the number of days it takes for the company to sell its inventory. An increasing trend in DOH suggests that inventory turnover is slowing down, which could tie up capital in unsold inventory.
2. Days of Sales Outstanding (DSO):
- The data provided does not include information on Days of Sales Outstanding (DSO), which measures the average number of days a company takes to collect revenue after a sale is made. Therefore, it is not possible to analyze the efficiency of accounts receivable collection for Harley-Davidson Inc.
3. Number of Days of Payables:
- The data provided does not include information on the Number of Days of Payables, which measures the average number of days a company takes to pay its suppliers. This ratio is crucial as it reflects the company's relationship with its suppliers and its cash management practices.
In conclusion, based on the available data, Harley-Davidson Inc's inventory management, accounts receivable collection, and payment practices appear to be impacted by increasing Days of Inventory on Hand. However, a comprehensive analysis would require additional information on Days of Sales Outstanding and Number of Days of Payables.
Long-term
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Fixed asset turnover | — | — | 8.34 | 7.80 | 5.45 |
| Total asset turnover | 0.44 | 0.48 | 0.50 | 0.48 | 0.34 |
The Fixed Asset Turnover ratio measures how efficiently a company generates sales using its fixed assets. An increasing trend in this ratio indicates improved utilization of fixed assets. In the case of Harley-Davidson Inc, the Fixed Asset Turnover ratio has shown a positive trend, increasing from 5.45 in 2020 to 8.34 in 2022. This suggests that the company has been able to generate more sales relative to its investment in fixed assets over the years.
On the other hand, the Total Asset Turnover ratio reflects how efficiently a company utilizes all its assets to generate sales. A higher ratio implies better asset utilization. Harley-Davidson Inc's Total Asset Turnover ratio has fluctuated over the years, peaking at 0.50 in 2022 and then slightly declining to 0.44 in 2024. Despite the fluctuations, the company has generally been able to generate sales relative to its total assets.
Overall, the increasing trend in the Fixed Asset Turnover ratio and the somewhat fluctuating but acceptable Total Asset Turnover ratio indicate that Harley-Davidson Inc has been effectively utilizing its assets to generate sales, showcasing improved operational efficiency and asset management capabilities.