Insteel Industries Inc (IIIN)
Activity ratios
Short-term
Turnover ratios
| Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Inventory turnover | 5.74 | 5.95 | 5.91 | 6.09 | 5.88 | 4.75 | 4.81 | 3.94 | 2.62 | 2.51 | 3.48 | 3.43 | 3.54 | 3.76 | 3.57 | 5.51 | 6.54 | 5.89 | 6.23 | 6.88 |
| Receivables turnover | 8.87 | 8.67 | 10.09 | 13.03 | 10.24 | 10.58 | — | 11.89 | 10.12 | — | — | — | 8.70 | — | — | — | — | — | — | — |
| Payables turnover | 13.60 | 15.28 | 21.53 | 24.03 | 17.69 | 16.60 | 17.76 | 21.88 | 11.06 | 6.26 | 7.57 | 7.90 | 5.67 | 4.44 | 5.45 | 11.16 | 11.58 | 9.14 | 11.62 | 14.06 |
| Working capital turnover | 2.40 | 2.59 | 2.76 | 3.03 | 2.57 | 2.85 | 3.15 | 3.36 | 3.03 | 3.18 | 3.46 | 3.96 | 3.32 | 3.66 | 3.89 | 4.04 | 3.29 | 3.25 | 3.51 | 3.34 |
Insteel Industries Inc's inventory turnover has been fluctuating over the past few quarters, with a general declining trend from 6.88 in December 2019 to 5.74 in September 2024. This ratio indicates the efficiency with which the company manages its inventory, with a higher ratio implying faster sales of inventory. While the current turnover is relatively stable, it is important for Insteel Industries to monitor inventory levels closely to optimize working capital efficiency.
The receivables turnover ratio has also shown variability, reaching its peak at 13.03 in December 2023. This ratio reflects how quickly the company collects outstanding receivables from customers. The trends in this ratio suggest that Insteel Industries has been effective in managing its credit and collections policies, aiding in maintaining healthy cash flows.
Payables turnover has exhibited significant fluctuations over the quarters, with a noticeable increase from 5.45 in March 2020 to 24.03 in December 2023 before dropping to 15.28 in June 2024. This ratio indicates how efficiently the company manages its accounts payable, with a higher turnover ratio indicating that the company is paying suppliers more frequently. Insteel Industries should strike a balance in managing payables to optimize cash flow while maintaining good relationships with suppliers.
The working capital turnover ratio has generally remained stable over the quarters, hovering around the 3.00-4.00 range. This ratio reflects how well the company utilizes its working capital to generate sales. Insteel Industries has maintained a consistent turnover, indicating efficient use of its working capital to support operational activities and generate revenue.
Overall, while Insteel Industries has shown fluctuations in its activity ratios, the company has demonstrated effective management of inventory, receivables, payables, and working capital. Monitoring and analyzing these ratios regularly can help the company make informed decisions to improve operational efficiency and financial performance.
Average number of days
| Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 63.59 | 61.31 | 61.74 | 59.96 | 62.07 | 76.88 | 75.93 | 92.71 | 139.40 | 145.47 | 104.79 | 106.50 | 103.00 | 97.12 | 102.17 | 66.20 | 55.80 | 61.92 | 58.58 | 53.08 |
| Days of sales outstanding (DSO) | days | 41.15 | 42.12 | 36.19 | 28.01 | 35.66 | 34.48 | — | 30.69 | 36.07 | — | — | — | 41.97 | — | — | — | — | — | — | — |
| Number of days of payables | days | 26.83 | 23.89 | 16.95 | 15.19 | 20.64 | 21.99 | 20.55 | 16.68 | 33.00 | 58.32 | 48.22 | 46.19 | 64.42 | 82.19 | 66.91 | 32.71 | 31.53 | 39.93 | 31.41 | 25.97 |
The Days of Inventory on Hand (DOH) for Insteel Industries Inc have been relatively stable over the past few quarters, ranging from 53.08 days to 145.47 days. The company seems to have improved its inventory management efficiency over time based on the decreasing trend in DOH.
Days of Sales Outstanding (DSO) show the average number of days it takes for Insteel Industries Inc to collect revenue after a sale is made. While there are some missing data points, the trend indicates improvements in collecting payment from customers, with DSO ranging from 28.01 days to 42.12 days.
The number of days of payables reveals that Insteel Industries Inc has been able to negotiate longer payment terms with its suppliers over the quarters, leading to more favorable payment conditions for the company. The trend shows fluctuations, with the number of days of payables ranging from 15.19 days to 82.19 days.
Overall, the analysis of activity ratios suggests that Insteel Industries Inc has made progress in managing its inventory efficiently, collecting revenue faster, and negotiating better payment terms with its suppliers, which could positively impact its working capital management and cash flow.
Long-term
| Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Fixed asset turnover | 4.22 | 4.29 | 4.46 | 4.65 | 5.41 | 5.91 | 6.82 | 7.63 | 7.64 | 7.30 | 6.75 | 6.28 | 5.59 | 5.26 | 4.95 | 4.87 | 4.65 | 4.41 | 4.03 | 4.36 |
| Total asset turnover | 1.25 | 1.32 | 1.43 | 1.54 | 1.45 | 1.58 | 1.78 | 1.93 | 1.75 | 1.64 | 1.72 | 1.76 | 1.51 | 1.50 | 1.54 | 1.59 | 1.40 | 1.32 | 1.41 | 1.46 |
The fixed asset turnover ratio for Insteel Industries Inc has shown a decreasing trend from 7.63 in December 2022 to 4.22 in September 2024. This indicates that the company's ability to generate sales from its fixed assets has declined over time.
On the other hand, the total asset turnover ratio has fluctuated but generally maintained a range between 1.25 and 1.93 during the same period. This ratio reflects the company's overall efficiency in utilizing all its assets to generate revenue.
The declining trend in fixed asset turnover may suggest that Insteel Industries Inc is not effectively utilizing its fixed assets to generate sales. This could be due to various factors such as underperforming assets, inefficient production processes, or changing market conditions.
It is important for the company to closely monitor and improve its fixed asset turnover ratio to enhance operational efficiency and maximize the returns from its investments in fixed assets. This can be achieved through strategies such as optimizing asset utilization, upgrading machinery and equipment, and evaluating the profitability of each asset to ensure they contribute positively to the company's revenue generation.