Harley-Davidson Inc (HOG)

Short-term

Turnover ratios

Activity ratios provide insights into how effectively a company is managing its assets and liabilities to generate revenues and profits. Here is a detailed analysis of Harley-Davidson, Inc.'s activity ratios based on the provided data:

1. Inventory Turnover:
- The inventory turnover ratio measures how many times a company's inventory is sold and replaced over a period.
- Harley-Davidson's inventory turnover has shown fluctuations over the quarters, ranging from 3.73 to 5.13.
- A higher inventory turnover ratio indicates that Harley-Davidson is efficiently managing its inventory levels and selling products quickly.

2. Receivables Turnover:
- The receivables turnover ratio indicates how quickly a company collects payments from its customers.
- Harley-Davidson's receivables turnover has been relatively stable, ranging from 17.70 to 22.82.
- A higher receivables turnover ratio suggests that Harley-Davidson has effective credit and collection policies in place.

3. Payables Turnover:
- The payables turnover ratio measures how quickly a company pays its suppliers.
- Harley-Davidson's payables turnover has varied between 7.14 and 10.17.
- A higher payables turnover ratio indicates that Harley-Davidson is managing its payables effectively, possibly negotiating favorable credit terms with suppliers.

4. Working Capital Turnover:
- The working capital turnover ratio assesses how efficiently a company is utilizing its working capital to generate sales.
- Harley-Davidson's working capital turnover has shown consistency, ranging from 1.86 to 2.16.
- A higher working capital turnover ratio suggests that Harley-Davidson is effectively using its working capital to support its operations and sales growth.

Overall, analyzing these activity ratios helps assess Harley-Davidson's operational efficiency, inventory management, and the effectiveness of its receivables and payables processes. A consistent or improving trend in these ratios may indicate sound operational performance and effective utilization of resources.

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Average number of days

In analyzing Harley-Davidson, Inc.'s activity ratios, we observe the following trends:

1. Days of Inventory on Hand (DOH):
- The company's DOH has shown fluctuations over the quarters, ranging from a low of 71.12 days in Q3 2022 to a high of 97.81 days in Q4 2022.
- In Q4 2023, the DOH increased significantly to 95.63 days, indicating that Harley-Davidson held inventory for a longer period before selling it, which may tie up capital and increase storage costs.

2. Days of Sales Outstanding (DSO):
- The DSO has also fluctuated, with the lowest value of 16.00 days in Q4 2022 and the highest of 20.13 days in Q1 2023.
- The decreasing trend in DSO from Q1 2023 to Q4 2023 (16.71 to 20.13 days) indicates that Harley-Davidson has been collecting sales revenue more efficiently from its customers, which is a positive sign.

3. Number of Days of Payables:
- Over the quarters, the number of days of payables has varied, with the lowest value of 35.91 days in Q4 2023 and the highest of 51.15 days in Q1 2022.
- The decrease in days of payables from Q1 2022 to Q4 2023 suggests that Harley-Davidson may be paying its suppliers more quickly, which could impact cash flow management.

Overall, while the company has been managing its sales collection efficiently (lower DSO), the increase in days of inventory on hand and the decrease in days of payables may require further evaluation to ensure optimal working capital management and inventory control.

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Long-term

The fixed asset turnover ratio for Harley-Davidson, Inc. has been relatively stable over the past quarters, ranging from 7.98 to 8.77. This indicates that the company is efficient in generating sales revenue from its fixed assets. The relatively high fixed asset turnover ratios suggest that Harley-Davidson is effectively utilizing its property, plant, and equipment to generate sales.

On the other hand, the total asset turnover ratio has also shown consistency, hovering around 0.48 to 0.50 over the reported quarters. This indicates that Harley-Davidson is generating sales revenue in relation to its total assets, including both fixed and current assets. The stable total asset turnover ratio suggests that the company is efficiently utilizing its total asset base to generate revenue.

Overall, Harley-Davidson's long-term activity ratios reflect strong asset utilization efficiency, with consistent performance in generating revenue from both fixed and total assets over the quarters under review. This indicates effective management of assets to drive sales and potentially profitability for the company.