Knife River Corporation (KNF)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Inventory turnover | 6.12 | 7.17 | 6.77 | 6.46 | — |
| Receivables turnover | — | — | — | — | — |
| Payables turnover | — | — | — | — | — |
| Working capital turnover | 4.69 | 5.00 | 4.80 | 12.02 | — |
Inventory Turnover:
Knife River Corporation's inventory turnover has improved steadily over the years, from 6.46 in 2021 to 7.17 in 2023, before declining slightly to 6.12 in 2024. This indicates that the company is selling its inventory more efficiently, with products being sold and restocked at a faster rate.
Receivables Turnover:
The data shows that Knife River Corporation did not report any receivables turnover figures for the years provided. This could imply that the company does not have a significant amount of accounts receivable or that the information is not readily available.
Payables Turnover:
Similar to receivables turnover, Knife River Corporation did not report any payables turnover figures for the years provided. This could suggest that the company does not have a traditional payment structure with suppliers or that the data is not disclosed.
Working Capital Turnover:
Knife River Corporation's working capital turnover indicates how efficiently the company is using its working capital to generate sales. The ratio has fluctuated over the years, from 12.02 in 2021 to 4.69 in 2024, suggesting some inefficiencies in utilizing working capital to support revenue generation. This could be an area for the company to focus on improving operational performance and cash flow management.
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 | 59.60 | 50.91 | 53.94 | 56.52 | — |
| Days of sales outstanding (DSO) | days | — | — | — | — | — |
| Number of days of payables | days | — | — | — | — | — |
Knife River Corporation's activity ratios reveal important insights into its operational efficiency and management of working capital.
1. Days of Inventory on Hand (DOH):
- The trend in DOH shows a slight decrease from 56.52 days in 2021 to 50.91 days in 2023, followed by a slight increase to 59.60 days in 2024.
- A lower DOH indicates that Knife River is efficiently managing its inventory, turning it into sales within a shorter period.
- However, the increase in 2024 might suggest potential inventory management challenges or changes in business operations requiring a higher inventory level.
2. Days of Sales Outstanding (DSO):
- DSO data is unavailable for all years, indicating a lack of information on how quickly the company collects its accounts receivable.
- Without DSO figures, it is challenging to assess the efficiency of Knife River's credit and collection policies.
3. Number of Days of Payables:
- Similar to DSO, the number of days of payables data is missing for all years, making it difficult to evaluate how long Knife River takes to pay its suppliers.
- Managing payables effectively can impact cash flow and relationships with suppliers.
In conclusion, while Knife River Corporation demonstrates efficient inventory management based on the DOH trend, the lack of DSO and payables data limits a comprehensive analysis of the company's overall working capital management. Additional financial information would be necessary to evaluate Knife River's complete activity ratios and efficiency in managing its operating cycle.
Long-term
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Fixed asset turnover | — | — | 1.86 | 1.71 | — |
| Total asset turnover | 1.02 | 1.09 | 1.01 | 1.02 | — |
The Fixed Asset Turnover ratio measures how efficiently a company is using its fixed assets to generate sales. For Knife River Corporation, we observe that this ratio was not available for the years 2020, 2023, and 2024. However, for the years 2021 and 2022, the Fixed Asset Turnover ratio was 1.71 and 1.86, respectively. This indicates that the company generated $1.71 and $1.86 in revenue for every dollar invested in fixed assets during those years.
On the other hand, the Total Asset Turnover ratio evaluates the company's ability to generate sales from its total assets. In the case of Knife River Corporation, this ratio was not available for the year 2020 but stood at 1.02 in 2021 and 2024, and at 1.01 in 2022. Notably, the Total Asset Turnover ratio increased to 1.09 in 2023. This suggests that the company effectively utilized its total assets to generate sales, with the improvement in 2023 indicating enhanced efficiency in generating revenue from its asset base.
Overall, while the Fixed Asset Turnover ratio provides insight into the efficiency of fixed asset utilization, the Total Asset Turnover ratio reflects the effectiveness of total asset utilization in revenue generation. In Knife River Corporation's context, the varying ratios across the years indicate fluctuations in efficiency levels, highlighting the company's operational performance with respect to asset utilization.