Installed Building Products Inc (IBP)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Inventory turnover | 14.89 | 13.32 | 12.55 | 19.58 | 18.88 |
| Receivables turnover | 3.36 | 3.35 | 3.10 | 3.08 | 3.55 |
| Payables turnover | 15.29 | 15.76 | 13.52 | 14.89 | 14.25 |
| Working capital turnover | 3.79 | 4.73 | 3.51 | 4.19 | 4.02 |
Inventory turnover measures how efficiently a company manages its inventory by showing how many times it sells and replaces its inventory during a specific period. Installed Building Products Inc's inventory turnover has been consistently high over the past five years, indicating effective inventory management.
Receivables turnover ratio reflects how efficiently a company collects its accounts receivable. Installed Building Products Inc's receivables turnover has remained relatively stable over the years, suggesting a consistent collection process in place.
Payables turnover ratio highlights how well a company manages its accounts payable by showing how quickly it pays its suppliers. Installed Building Products Inc's payables turnover has also been relatively steady, indicating a consistent payment schedule to suppliers.
Working capital turnover ratio demonstrates how effectively a company utilizes its working capital to generate sales. Installed Building Products Inc's working capital turnover has shown a slight decrease in recent years, suggesting a slight decline in the company's ability to generate sales with its available working capital.
Overall, Installed Building Products Inc appears to be effectively managing its inventory and accounts receivable, maintaining a stable payment schedule to suppliers while showing a consistent but slightly decreasing trend in utilizing its working capital to generate sales.
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 | 24.51 | 27.41 | 29.09 | 18.65 | 19.33 |
| Days of sales outstanding (DSO) | days | 108.68 | 109.07 | 117.84 | 118.43 | 102.73 |
| Number of days of payables | days | 23.87 | 23.15 | 26.99 | 24.51 | 25.62 |
Installed Building Products Inc's activity ratios provide insight into how efficiently the company manages its inventory, collects on its receivables, and pays its bills.
1. Days of Inventory on Hand (DOH):
- The company's DOH has been fluctuating over the past five years, with a decreasing trend from 37.86 days in 2021 to 32.16 days in 2023. This indicates that Installed Building Products is holding lower levels of inventory on hand, which can be a positive sign of effective inventory management.
2. Days of Sales Outstanding (DSO):
- The DSO for Installed Building Products has ranged from 54.31 days to 59.04 days over the last five years, showing relatively consistent collection periods. A decreasing trend from 59.04 days in 2019 to 55.61 days in 2023 suggests that the company is collecting receivables more efficiently.
3. Number of Days of Payables:
- The number of days of payables for the company has varied between 29.56 days and 35.12 days in the same period. The trend has been relatively stable, with a slight increase in 2023 compared to 2022. A higher number of days of payables may indicate that Installed Building Products is taking longer to pay its bills.
Overall, the company's activity ratios indicate improvements in inventory management and accounts receivable collection efficiency. However, the increase in the number of days of payables might suggest a slowdown in vendor payment processes. Installed Building Products may need to focus on maintaining a balanced approach to managing all aspects of its working capital to ensure continued operational efficiency and financial health.
Long-term
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Fixed asset turnover | 21.41 | 23.94 | 19.23 | 15.61 | 13.91 |
| Total asset turnover | 1.38 | 1.48 | 1.17 | 1.37 | 1.35 |
The fixed asset turnover ratio for Installed Building Products Inc has shown a consistent upward trend over the past five years, increasing from 14.21 in 2019 to 20.25 in 2023. This indicates that the company is generating more sales revenues relative to its investment in fixed assets, reflecting improving efficiency in utilizing its fixed assets to generate sales.
On the other hand, the total asset turnover ratio has been more volatile, with fluctuations observed over the same period. The ratio was highest in 2022 at 1.50 and lowest in 2021 at 1.19, indicating varying levels of sales generated per dollar of total assets. Overall, the total asset turnover ratio has shown some inconsistency in comparison to the fixed asset turnover ratio.
In conclusion, the trend of increasing fixed asset turnover suggests that Installed Building Products Inc has been effectively using its fixed assets to generate sales, while the total asset turnover ratio has shown more fluctuations, possibly due to changes in the company's overall asset base or operational efficiency.