Koppers Holdings Inc (KOP)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Inventory turnover | 5.00 | 5.23 | 4.99 | 5.16 | 5.73 |
| Receivables turnover | 10.29 | 8.97 | 8.96 | 9.19 | 10.32 |
| Payables turnover | 9.76 | 8.96 | 9.12 | 9.91 | 10.15 |
| Working capital turnover | 5.58 | 6.19 | 4.78 | 5.95 | 7.66 |
Koppers Holdings Inc's inventory turnover ratio has been relatively stable over the past five years, averaging around 4.5 times. This indicates that, on average, the company is able to sell and replace its inventory about 4 to 5 times within a given period. A decreasing trend in inventory turnover could be concerning as it may imply slower sales or excess inventory.
The receivables turnover ratio has shown some fluctuations but generally remains at a healthy level, averaging around 9 to 10 times. This implies that Koppers Holdings Inc is efficient in collecting outstanding receivables from customers, with a higher turnover indicating faster collection cycles.
The payables turnover ratio has also displayed consistency, hovering around 8 times. This suggests that the company is managing its payables effectively, with a higher turnover ratio indicating a shorter period in which it takes to pay its suppliers.
The working capital turnover ratio has shown some variability, with a peak in 2019 followed by a decline in subsequent years. This ratio indicates how efficiently the company is utilizing its working capital to generate revenue, with a higher turnover implying better utilization of resources. The decreasing trend in recent years could suggest a decrease in revenue generated per unit of working capital employed.
Overall, Koppers Holdings Inc has maintained relatively stable activity ratios, with occasional fluctuations. Monitoring and analyzing these ratios can provide insights into the company's operational efficiency and effectiveness in managing its working capital, inventory, receivables, and payables.
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 | 72.97 | 69.84 | 73.09 | 70.70 | 63.70 |
| Days of sales outstanding (DSO) | days | 35.46 | 40.67 | 40.73 | 39.72 | 35.38 |
| Number of days of payables | days | 37.42 | 40.72 | 40.04 | 36.83 | 35.95 |
Days of inventory on hand (DOH) is a measure of how many days, on average, a company holds onto its inventory before selling it. Koppers Holdings Inc's DOH has been relatively stable over the past five years, ranging from 76.34 days in 2019 to 85.19 days in 2021. The increase in DOH from 2020 to 2021 may indicate that the company is holding onto inventory for a longer period, which could tie up cash and potentially lead to higher carrying costs.
Days of sales outstanding (DSO) represents the average number of days it takes for a company to collect payment from its customers after a sale is made. Koppers' DSO has fluctuated over the years, with a peak of 39.75 days in 2022 and a low of 34.14 days in 2019. A decrease in DSO suggests that the company is collecting payments more efficiently, improving its cash flow and liquidity position.
Number of days of payables is a measure of how long a company takes to pay its suppliers after a purchase is made. Koppers' payables days have varied slightly over the years, ranging from 42.82 days in 2023 to 46.67 days in 2021. A lower number of days of payables indicates that the company is paying its suppliers more quickly, which could potentially strain its liquidity position.
Overall, Koppers Holdings Inc's activity ratios show some fluctuations but generally indicate efficient management of inventory, collections from customers, and payments to suppliers. Monitoring these ratios over time can provide insights into the company's working capital management and operational efficiency.
Long-term
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Fixed asset turnover | 3.30 | 3.47 | 3.35 | 3.96 | 4.77 |
| Total asset turnover | 1.13 | 1.13 | 0.99 | 1.01 | 1.09 |
Koppers Holdings Inc's fixed asset turnover has exhibited a declining trend over the past five years, decreasing from 4.27 in 2019 to 3.41 in 2023. This indicates a reduction in the efficiency of generating sales from fixed assets during this period, possibly signaling underutilization or inefficiency in the company's fixed asset base.
On the other hand, the total asset turnover ratio has fluctuated over the same period, with a slight increase from 1.04 in 2020 to 1.17 in 2023. This ratio measures the company's ability to generate sales from all assets, both fixed and current. The improvement in total asset turnover suggests enhanced efficiency in utilizing all assets to generate revenue, which could be attributed to better management of working capital or increased sales volume.
Overall, while the total asset turnover ratio has shown some improvement, the declining trend in fixed asset turnover warrants further investigation into the company's fixed asset management and utilization strategies to enhance operational efficiency and profitability in the long term.