Kinder Morgan Inc (KMI)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Inventory turnover | 9.48 | 11.21 | 16.14 | 16.19 | 14.78 |
| Receivables turnover | 10.03 | 9.66 | 10.20 | 10.05 | 8.73 |
| Payables turnover | 3.77 | 4.31 | 7.09 | 7.23 | 6.15 |
| Working capital turnover | — | — | — | — | — |
Based on the provided data for Kinder Morgan Inc's activity ratios:
1. Inventory Turnover:
- The inventory turnover ratio measures how efficiently a company manages its inventory. Kinder Morgan Inc's inventory turnover has been increasing from 14.78 in 2020 to 16.19 in 2021, indicating an improvement in inventory management. However, it slightly decreased to 16.14 in 2022 and significantly dropped to 11.21 in 2023 and 9.48 in 2024. The decreasing trend in recent years may signal potential inventory management challenges or changes in the business operations affecting inventory turnover.
2. Receivables Turnover:
- The receivables turnover ratio reflects how quickly a company collects payments from its customers. Kinder Morgan Inc's receivables turnover has shown a relatively stable trend, increasing from 8.73 in 2020 to 10.05 in 2021, and reaching 10.20 in 2022 before slightly decreasing to 9.66 in 2023 and then increasing again to 10.03 in 2024. The consistent improvement indicates effective credit and collection policies, resulting in a faster conversion of receivables into cash.
3. Payables Turnover:
- The payables turnover ratio measures how efficiently a company pays its suppliers. Kinder Morgan Inc's payables turnover has been fluctuating over the years, increasing from 6.15 in 2020 to 7.23 in 2021 and then slightly decreasing to 7.09 in 2022. However, there was a significant drop to 4.31 in 2023 and further to 3.77 in 2024. The decreasing trend suggests potential delays in payments to suppliers, which could impact relationships or cash flow management.
4. Working Capital Turnover:
- The working capital turnover ratio evaluates how efficiently a company uses its working capital to generate sales. The data provided indicates that no working capital turnover figures were available for Kinder Morgan Inc for the years 2020 to 2024. This might be due to the nature of the company's business or the calculation method being not applicable or not reported.
In conclusion, analyzing these activity ratios provides insights into Kinder Morgan Inc's operational efficiency, inventory management, customer payment collection, supplier payment practices, and utilization of working capital. Monitoring these ratios can help stakeholders assess the company's performance and identify areas for improvement in managing resources and cash flow effectively.
Average number of days
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 38.52 | 32.56 | 22.62 | 22.55 | 24.69 |
| Days of sales outstanding (DSO) | days | 36.40 | 37.80 | 35.78 | 36.32 | 41.80 |
| Number of days of payables | days | 96.82 | 84.71 | 51.51 | 50.52 | 59.38 |
Based on the provided data, we can analyze Kinder Morgan Inc's activity ratios as follows:
1. Days of Inventory on Hand (DOH):
- In 2020, the company had 24.69 days of inventory on hand, which decreased to 22.55 days by the end of 2021. This suggests an improvement in inventory management as it took fewer days to sell the inventory.
- However, in 2024, the days of inventory on hand increased significantly to 38.52 days, indicating a potential inefficiency in managing inventory levels.
2. Days of Sales Outstanding (DSO):
- The days of sales outstanding decreased from 41.80 days in 2020 to 36.32 days in 2021, showing a positive trend in collecting accounts receivable more efficiently.
- Although the DSO slightly increased in 2024 to 36.40 days, overall, the company has been successful in reducing the time it takes to collect receivables.
3. Number of Days of Payables:
- The number of days of payables decreased from 59.38 days in 2020 to 50.52 days in 2021, indicating that the company paid its suppliers more quickly during this period.
- However, there was a significant increase in the days of payables in 2024 to 96.82 days, suggesting that the company is taking longer to pay its suppliers.
Overall, Kinder Morgan Inc has shown improvements in managing inventory and collecting receivables in recent years. However, there are concerns regarding the increasing days of inventory on hand and payables, which may indicate potential inefficiencies that need to be addressed to maintain healthy working capital management.
See also:
Long-term
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Fixed asset turnover | 0.40 | 0.41 | 0.54 | 0.47 | 0.33 |
| Total asset turnover | 0.21 | 0.22 | 0.27 | 0.24 | 0.16 |
The fixed asset turnover ratio for Kinder Morgan Inc has shown a positive trend from 0.33 in December 2020 to 0.40 in December 2024. This indicates that the company has been more efficient in generating revenue from its fixed assets over the years, with a peak performance in 2022.
Similarly, the total asset turnover ratio has also increased steadily from 0.16 in December 2020 to 0.21 in December 2024. This suggests that Kinder Morgan Inc has been able to generate more revenue relative to its total assets, reflecting improved efficiency in asset utilization.
Overall, both ratios demonstrate an upward trajectory, showcasing the company's ability to efficiently utilize its assets to generate revenue over the long term.