KBR Inc (KBR)

Short-term

Turnover ratios

Based on the activity ratios provided for KBR Inc, we can gain insights into the efficiency of the company's operations:

1. Receivables Turnover: This ratio indicates how many times a company collects its accounts receivable during a period. KBR Inc's receivables turnover has shown a generally stable trend over the years, with a slight increase from 5.06 in 2021 to 7.00 in 2024. A higher turnover suggests that the company is efficient in collecting outstanding payments from its customers.

2. Payables Turnover: The payables turnover ratio reflects how quickly a company pays its suppliers. KBR Inc's payables turnover has fluctuated over the years, with a notable increase from 6.90 in 2021 to 11.14 in 2023, before decreasing to 9.45 in 2024. A higher turnover ratio implies that the company is managing its payables effectively, but this could also indicate stricter payment terms with suppliers.

3. Working Capital Turnover: This ratio measures how efficiently a company is utilizing its working capital to generate sales. KBR Inc's working capital turnover has shown significant variability, ranging from 26.17 in 2021 to 86.51 in 2023. A higher turnover implies that the company is effectively utilizing its resources to generate revenue.

4. Inventory Turnover: Unfortunately, data for KBR Inc's inventory turnover is not available for the years provided. This ratio would have indicated how quickly the company sells its inventory, providing insights into inventory management efficiency.

Overall, based on the available data, KBR Inc seems to be managing its receivables, payables, and working capital efficiently, as evidenced by the generally stable to increasing turnover ratios. To gain a more comprehensive understanding of the company's operations, it would be beneficial to analyze additional financial ratios and consider industry benchmarks.

---

Average number of days

Based on the provided data for KBR Inc, let's analyze the activity ratios:

1. Days of Inventory on Hand (DOH):
- Unfortunately, the data for Days of Inventory on Hand is not available for any of the years provided. This metric is crucial in measuring how efficiently the company manages its inventory, monitors stock levels, and controls costs related to inventory storage and obsolescence. Without this information, it is challenging to assess KBR Inc's inventory management efficiency.

2. Days of Sales Outstanding (DSO):
- The Days of Sales Outstanding for KBR Inc show a moderate trend over the years. In 2020, the DSO was 58.29 days, which increased to 72.10 days in 2021 but then improved to 54.28 days in 2022. Subsequently, in 2023 and 2024, the DSO remained relatively stable at 54.16 days and 52.14 days, respectively.
- DSO indicates the average number of days it takes for a company to collect revenue after a sale is made. A lower DSO value is generally preferred as it suggests faster cash collection from customers, improving cash flow and liquidity.

3. Number of Days of Payables:
- The Number of Days of Payables for KBR Inc demonstrates fluctuation over the years. In 2020, the company had 41.07 days of payables which increased to 52.86 days in 2021. However, in the following years, there was a decreasing trend with 36.93 days in 2022, 32.75 days in 2023, and a slight increase to 38.64 days in 2024.
- This metric reflects how long a company takes to pay its suppliers. A higher number of days of payables may indicate that the company is using its suppliers' funds to finance its operations, which could be beneficial for working capital management.

In summary, while the data for Days of Inventory on Hand is missing, the analysis of Days of Sales Outstanding and Number of Days of Payables suggests fluctuations and improvements over the years, providing insights into KBR Inc's efficiency in managing receivables and payables.

---

Long-term

KBR Inc's long-term activity ratios, specifically the Fixed Asset Turnover and Total Asset Turnover, provide insights into how efficiently the company is utilizing its assets to generate sales.

1. Fixed Asset Turnover: This ratio measures how effectively the company is using its fixed assets to generate revenue. Over the period from 2020 to 2024, KBR Inc's Fixed Asset Turnover has shown a fluctuating trend. It increased from 44.36 in 2020 to 53.30 in 2021, indicating a significant improvement in utilizing fixed assets. However, the ratio decreased to 35.69 in 2022, 28.59 in 2023, and further dropped to 26.81 in 2024. This downward trend suggests that the company may be experiencing challenges in efficiently utilizing its fixed assets to generate sales, which could be a cause for concern.

2. Total Asset Turnover: The Total Asset Turnover ratio reflects how well the company is utilizing all its assets to generate revenue. KBR Inc's Total Asset Turnover ratio has been relatively stable over the five-year period. It was 1.01 in 2020 and increased to 1.17 in 2021 and 2022, indicating an improvement in the efficiency of asset utilization. In 2023, the ratio further increased to 1.23 but then declined slightly to 1.16 in 2024. Overall, the company seems to be effectively utilizing its total assets to generate sales, with some fluctuations in recent years.

In conclusion, while KBR Inc has maintained a stable Total Asset Turnover ratio, its decreasing Fixed Asset Turnover ratio over the years raises concerns about the company's efficiency in utilizing its fixed assets to generate revenue. It would be important for the company to address the declining trend in fixed asset turnover and explore ways to improve the efficiency of asset utilization to drive sustainable growth and profitability.