International Paper (IP)

Activity ratios

Short-term

Turnover ratios

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 Sep 30, 2019 Jun 30, 2019 Mar 31, 2019
Inventory turnover 8.06 5.89 6.25 6.34 6.38 6.27 6.60 7.42 7.17 6.36 6.96 6.56 7.38 6.19 6.29 6.59 4.28 4.30 2.55 2.68
Receivables turnover 6.14 6.25 6.35 6.46 6.36 6.04 6.12 6.41 6.73 6.17 5.90 6.09 6.60 6.76 6.84 6.73 6.71 6.79 6.55 8.23
Payables turnover 6.23 4.81 4.99 4.84 4.57 4.64 4.68 4.88 4.99 4.83 4.96 5.09 5.89 5.58 5.73 5.55 3.90 4.02 2.27 2.45
Working capital turnover 7.09 6.63 8.28 8.79 11.81 11.47 7.87 7.09 7.37 4.21 5.93 5.39 6.86 7.29 — — — 9.67 9.74 13.64

Inventory turnover for International Paper Co. has been relatively stable, ranging from 6.89 to 7.80 over the past eight quarters, indicating that the company efficiently manages its inventory by converting it into sales multiple times within a year.

Receivables turnover has shown a consistent upward trend, increasing from 5.42 in Q1 2022 to 6.55 in Q1 2023. This suggests that the company is collecting its accounts receivable more rapidly, reflecting effective credit management or a strong customer base.

Payables turnover has also exhibited a fairly stable pattern, fluctuating between 5.11 and 6.06. A higher payables turnover ratio signifies that the company is efficiently managing its payments to suppliers, which could be indicative of favorable payment terms or strategic cash management.

Working capital turnover has shown significant variability, with a peak of 11.96 in Q4 2022 and a low of 6.32 in Q1 2022. A higher working capital turnover ratio indicates that the company is generating more revenue per unit of working capital, reflecting operational efficiency and effective utilization of resources.

Overall, International Paper Co. demonstrates solid performance in managing its activity ratios, particularly in inventory turnover and receivables turnover, which are crucial in assessing the company's operational efficiency and liquidity management.

Average number of days

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 Sep 30, 2019 Jun 30, 2019 Mar 31, 2019
Days of inventory on hand (DOH) days 45.31 61.93 58.42 57.58 57.22 58.22 55.29 49.18 50.88 57.38 52.48 55.68 49.48 58.94 58.02 55.38 85.34 84.88 143.12 136.21
Days of sales outstanding (DSO) days 59.46 58.43 57.45 56.51 57.37 60.45 59.63 56.92 54.26 59.16 61.87 59.95 55.26 54.03 53.37 54.20 54.42 53.73 55.73 44.33
Number of days of payables days 58.57 75.86 73.19 75.45 79.79 78.61 78.05 74.84 73.09 75.57 73.64 71.70 61.92 65.37 63.68 65.80 93.65 90.87 160.75 149.05

To assess the efficiency of International Paper Co.'s inventory management, we can analyze the Days of Inventory on Hand (DOH) ratio. The trend indicates that the company has been effectively managing its inventory levels, with a slight increase in inventory days from Q1 to Q4 2023. This could suggest a need for monitoring inventory levels to avoid overstocking.

Next, examining the Days of Sales Outstanding (DSO) ratio reveals the average number of days it takes the company to collect revenue from its sales. A decreasing trend in DSO from Q1 to Q4 2023 suggests an improvement in the company's collection efficiency, indicating a faster conversion of sales into cash.

Furthermore, analyzing the Number of Days of Payables metric can provide insights into the company's ability to manage its trade payables. There is a fluctuating trend in the payables days from Q1 to Q4 2023 but overall, the company has been maintaining a relatively stable payment period to its suppliers.

In summary, International Paper Co. appears to be effectively managing its inventory levels and improving its collection efficiency, which could positively impact its working capital management and overall financial performance. However, monitoring inventory days and payables days to ensure optimal levels is crucial for sustainable operations.

Long-term

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 Sep 30, 2019 Jun 30, 2019 Mar 31, 2019
Fixed asset turnover 1.85 1.84 1.90 1.97 2.00 2.04 2.07 2.09 2.08 1.93 1.84 1.74 1.85 1.65 1.66 1.71 1.69 1.75 1.76 2.20
Total asset turnover 0.81 0.80 0.84 0.87 0.87 0.84 0.84 0.86 0.86 0.74 0.68 0.65 0.64 0.64 0.64 0.65 0.66 0.66 0.66 0.84

The fixed asset turnover ratio for International Paper Co. has been relatively stable over the past eight quarters, ranging between 1.83 and 2.03. This indicates that, on average, the company generates between $1.83 and $2.03 in sales for every dollar invested in fixed assets. Generally, a higher fixed asset turnover ratio is preferable as it suggests efficient utilization of fixed assets to generate revenue.

On the other hand, the total asset turnover ratio has also shown consistency but at a lower level, fluctuating between 0.75 and 0.88. This means that the company generates between $0.75 and $0.88 in sales for every dollar of total assets it owns. While a higher total asset turnover ratio is generally favored, it is important to consider the industry norms and the company's specific business operations.

Overall, the fixed asset turnover ratio indicates how efficiently International Paper Co. is utilizing its fixed assets to generate revenue, while the total asset turnover ratio provides insights into the company's overall efficiency in generating sales relative to its total asset base. Investors and stakeholders may use these ratios to assess the company's operational efficiency and asset utilization over time.