Masco Corporation (MAS)

Short-term

Turnover ratios

Masco Corp.'s activity ratios provide insight into how efficiently the company manages its inventory, receivables, payables, and working capital.

1. Inventory turnover: Masco Corp. has maintained relatively stable inventory turnover ratios over the past five years, ranging from 4.53 to 5.75. This indicates that, on average, the company is able to sell and replace its inventory between 4.53 and 5.75 times a year. The increasing trend from 2021 to 2020 suggests an improvement in inventory management efficiency.

2. Receivables turnover: The company has also shown consistency in receivables turnover ratios, with values ranging from 6.32 to 7.55. This indicates that Masco Corp. collects its receivables approximately 6.32 to 7.55 times a year. The higher turnover ratios suggest that the company is efficient in collecting outstanding receivables.

3. Payables turnover: Masco Corp. has generally maintained stable payables turnover ratios, ranging from 5.15 to 6.80. This indicates that the company pays its suppliers approximately between 5.15 and 6.80 times a year. The higher turnover ratios suggest that the company effectively manages its payables.

4. Working capital turnover: The working capital turnover ratios for Masco Corp. have fluctuated over the years, with values ranging from 4.62 to 8.21. This ratio measures how efficiently the company generates revenue from its working capital. The increase in turnover from 2021 to 2022 suggests improved efficiency in utilizing working capital for generating sales.

Overall, Masco Corp.'s activity ratios reflect a balanced approach to managing its inventory, receivables, payables, and working capital efficiently to support its operations and generate revenue.

---

Average number of days

Masco Corp.'s activity ratios provide insights into the efficiency of its inventory management, accounts receivable collection, and payable turnover over the past five years.

1. Days of Inventory on Hand (DOH): Masco Corp.'s DOH has fluctuated over the years, ranging from 63.47 days in 2019 to 80.52 days in 2021. A decreasing trend in DOH indicates that the company has been improving its inventory turnover and reducing the time it takes to sell inventory.

2. Days of Sales Outstanding (DSO): The DSO metric reflects the average number of days it takes for the company to collect payment after making a sale. Masco Corp.'s DSO varied between 48.32 days in 2022 to 57.79 days in 2020. A decreasing trend in DSO implies that the company is collecting receivables more efficiently.

3. Number of Days of Payables: Masco Corp.'s payables turnover has been inconsistent over the years, with a low of 53.65 days in 2022 and a high of 70.84 days in 2020. An increasing trend in the number of days of payables suggests that the company is taking longer to pay its suppliers.

Overall, Masco Corp. should aim to strike a balance between managing inventory levels efficiently, collecting receivables promptly, and optimizing payment terms with suppliers to enhance its working capital management and overall operational efficiency.

---

Long-term

Masco Corp.'s long-term activity ratios indicate its efficiency in generating sales relative to its assets over the past five years. The trend analysis of the fixed asset turnover ratio shows a declining pattern from 2019 to 2023, suggesting a decrease in the company's ability to generate sales from its fixed assets. However, the ratio remains relatively high, indicating that Masco is utilizing its fixed assets efficiently to generate revenue.

On the other hand, the total asset turnover ratio depicts a fluctuating trend over the same period. While there was an initial increase from 2019 to 2022, the ratio decreased in 2023. This fluctuation suggests varying levels of effectiveness in utilizing both fixed and current assets to generate sales. Overall, Masco's total asset turnover indicates that the company is generating sales at a slower pace relative to its total assets compared to the fixed assets specifically.

In conclusion, Masco Corp. has demonstrated a mixed performance in its long-term activity ratios, with the fixed asset turnover ratio showing a decreasing trend but remaining relatively high, while the total asset turnover ratio fluctuated over the years. These ratios signal the company's ability to efficiently utilize its assets to generate revenue and may reflect changes in the company's operational efficiency and asset management strategies over time.