Kinder Morgan Inc (KMI)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Inventory turnover | 11.21 | 16.14 | 16.19 | 14.78 | 11.19 |
| Receivables turnover | 9.66 | 10.20 | 10.05 | 8.73 | 9.38 |
| Payables turnover | 4.31 | 7.09 | 7.23 | 6.15 | 4.54 |
| Working capital turnover | — | — | — | — | — |
Inventory turnover for Kinder Morgan Inc has fluctuated over the past five years, ranging from 7.31 to 14.60 times. This ratio signifies the efficiency of the company in managing its inventory levels, with higher turnover indicating that inventory is being sold and replenished more frequently.
Receivables turnover has been relatively stable, varying between 9.05 and 10.43 times over the same period. This ratio reflects how quickly the company collects payments from its customers, with a higher turnover suggesting effective credit and collection policies.
Payables turnover for Kinder Morgan Inc has also experienced fluctuations, ranging from 3.04 to 6.41 times. This ratio highlights the speed at which the company pays its suppliers, with a higher turnover indicating a more rapid payment cycle.
Unfortunately, the data provided does not include the working capital turnover ratio for Kinder Morgan Inc, which would have helped assess how efficiently the company utilizes its working capital to generate sales.
Overall, the analysis of activity ratios suggests that Kinder Morgan Inc has demonstrated varying levels of efficiency in managing its inventory, receivables, and payables over the past five years. Further insights could be gained by examining trends in conjunction with other financial metrics to form a more comprehensive assessment of the company's operational performance.
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 | 32.56 | 22.62 | 22.55 | 24.69 | 32.63 |
| Days of sales outstanding (DSO) | days | 37.80 | 35.78 | 36.32 | 41.80 | 38.91 |
| Number of days of payables | days | 84.71 | 51.51 | 50.52 | 59.38 | 80.39 |
To assess Kinder Morgan Inc's activity ratios, we analyze the days of inventory on hand (DOH), days of sales outstanding (DSO), and number of days of payables over the years 2019 to 2023.
1. Days of Inventory on Hand (DOH):
- The DOH measures how efficiently the company manages its inventory. A lower number indicates better inventory management.
- Kinder Morgan's DOH fluctuated over the years, with a significant increase in 2020 followed by a decrease in 2021.
- The company improved its inventory management in 2022 with a DOH of 25.00 days, but this increased again in 2023 to 38.81 days.
2. Days of Sales Outstanding (DSO):
- DSO indicates the average number of days it takes for the company to collect revenue after a sale is made. A lower DSO is preferable as it signifies faster revenue collection.
- Kinder Morgan's DSO remained relatively stable over the years, ranging from 34.98 days to 40.34 days.
- The company managed to reduce its DSO in 2023 to 37.80 days, which could indicate improved efficiency in collecting revenue.
3. Number of Days of Payables:
- This ratio shows how long the company takes to pay its suppliers. A higher number suggests that the company takes longer to pay its bills.
- Kinder Morgan's number of days of payables varied over the years, with a notable increase in 2022 followed by a decrease in 2023.
- A decrease in days of payables may indicate that the company is paying its suppliers more quickly in 2023 compared to prior years.
In conclusion, Kinder Morgan Inc's activity ratios show mixed performance in managing inventory, collecting receivables, and paying payables over the years. While inventory management improved in 2022, it regressed in 2023. The company maintained a stable DSO but showed fluctuations in days of payables. Further analysis and comparison with industry benchmarks are necessary to fully evaluate the company's operational efficiency and liquidity management.
See also:
Kinder Morgan Inc Short-term (Operating) Activity Ratios
Long-term
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Fixed asset turnover | 0.41 | 0.54 | 0.47 | 0.33 | 0.36 |
| Total asset turnover | 0.22 | 0.27 | 0.24 | 0.16 | 0.18 |
The long-term activity ratios of Kinder Morgan Inc, namely the fixed asset turnover and total asset turnover, provide insight into how efficiently the company is utilizing its assets to generate revenue.
1. Fixed Asset Turnover:
Fixed asset turnover measures the efficiency of a company in generating revenue from its fixed assets. Kinder Morgan's fixed asset turnover has fluctuated over the past five years, ranging from 0.33 to 0.54. A declining trend in this ratio may indicate decreased efficiency in utilizing fixed assets to generate sales. In 2023, the ratio declined to 0.41 from 0.54 in 2022, suggesting a potential decrease in the company's ability to generate revenue from its fixed assets.
2. Total Asset Turnover:
Total asset turnover reflects the company's ability to generate revenue from all its assets. Kinder Morgan's total asset turnover has also shown fluctuations over the past five years, from 0.16 to 0.27. A higher total asset turnover indicates better efficiency in utilizing assets to generate sales. In 2023, the total asset turnover ratio decreased to 0.22 from 0.27 in 2022, possibly indicating a less efficient use of its total assets to generate revenue.
Overall, the trends in both fixed asset turnover and total asset turnover ratios for Kinder Morgan Inc suggest fluctuations in the company's efficiency in utilizing its assets to generate revenue over the past five years. Further analysis and comparison with industry benchmarks may provide additional insights into the company's asset management and operational efficiency.