Hertz Global Holdings Inc (HTZ)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Inventory turnover | — | 13.92 | 12.53 | 2.19 | 13.61 |
| Receivables turnover | — | — | — | — | — |
| Payables turnover | — | — | — | — | — |
| Working capital turnover | — | — | 11.02 | — | — |
Based on the activity ratios provided for Hertz Global Holdings Inc., we can assess the efficiency of the company's operations in managing its inventory, receivables, payables, and working capital over the past three years.
1. Inventory Turnover: Unfortunately, specific data on inventory turnover is not available, which limits our ability to evaluate how quickly Hertz Global Holdings is selling its inventory during the years under review. Without this information, we cannot make a definitive assessment of the company's inventory management efficiency.
2. Receivables Turnover: The receivables turnover ratio measures how many times a company collects its accounts receivable during a specific period. The decreasing trend in Hertz Global Holdings' receivables turnover from 2021 to 2023 indicates that the company took longer to collect its accounts receivable over these years. This may suggest potential issues with credit policies or collection practices that could impact cash flow.
3. Payables Turnover: The payables turnover ratio is not available for any year in the data provided, indicating that we lack insight into how quickly Hertz Global Holdings is paying its obligations to suppliers. Without this information, it is challenging to gauge the company's ability to manage its accounts payable effectively.
4. Working Capital Turnover: The working capital turnover ratio indicates how efficiently a company is using its working capital to generate revenue. A higher ratio suggests that the company is using its working capital more efficiently. Hertz Global Holdings showed a significant improvement in its working capital turnover ratio from 2011 to 2023, indicating that the company became more effective in utilizing its working capital to generate revenue over this period.
In conclusion, while the receivables turnover and working capital turnover ratios provide some insight into Hertz Global Holdings' operational efficiency, the absence of data on inventory turnover and payables turnover limits a comprehensive assessment of the company's overall activity ratios.
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 | — | 26.23 | 29.13 | 166.81 | 26.81 |
| Days of sales outstanding (DSO) | days | — | — | — | — | — |
| Number of days of payables | days | — | — | — | — | — |
Based on the provided data for Hertz Global Holdings Inc.'s activity ratios, we can see a trend of increasing Days Sales Outstanding (DSO) over the past three years. DSO measures how long it takes for a company to collect revenue after a sale is made. Hertz's DSO has increased from 37.71 days in 2021 to 46.39 days in 2023. This indicates that the company is taking longer to collect payments from its customers, which could potentially result in cash flow challenges.
However, without additional data on Days of Inventory on Hand and Number of Days of Payables, a comprehensive analysis of the company's working capital management and efficiency in managing inventory and payables cannot be made. Ideally, a lower DSO, a shorter days of inventory on hand, and a longer number of days of payables could signify efficient working capital management and better cash flow management for Hertz Global Holdings Inc.
Long-term
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Fixed asset turnover | 13.97 | 13.63 | 12.07 | 7.89 | 12.92 |
| Total asset turnover | 0.38 | 0.39 | 0.37 | 0.31 | 0.40 |
The analysis of Hertz Global Holdings Inc.'s long-term activity ratios reveals a declining trend in both fixed asset turnover and total asset turnover over the past three years.
The fixed asset turnover ratio dropped from 0.75 in 2021 to 0.61 in 2023, indicating that the company generated $0.61 in sales for every $1 invested in fixed assets in 2023, compared to $0.75 in 2021. This decline may suggest that the company's fixed assets are not being utilized as efficiently to generate revenue.
Similarly, the total asset turnover ratio decreased from 0.37 in 2021 to 0.38 in 2023, implying that for every dollar of assets held by the company in 2023, it generated $0.38 in sales, compared to $0.37 in 2021. This slowdown in total asset turnover may indicate inefficiencies in the utilization of all assets, not just fixed assets.
Overall, the declining trend in both fixed asset turnover and total asset turnover ratios suggests potential challenges in generating revenue relative to the level of assets employed by Hertz Global Holdings Inc. It may be essential for the company to evaluate its asset utilization strategies to improve operational efficiency and profitability in the long term.