Masco Corporation (MAS)

Activity ratios

Short-term

Turnover ratios

Dec 31, 2023 Sep 30, 2023 Jun 30, 2023 Mar 31, 2023 Dec 31, 2022 Sep 30, 2022 Jun 30, 2022 Mar 31, 2022 Dec 31, 2021 Sep 30, 2021 Jun 30, 2021 Mar 31, 2021 Dec 31, 2020 Sep 30, 2020 Jun 30, 2020 Mar 31, 2020 Dec 31, 2019 Sep 30, 2019 Jun 30, 2019 Mar 31, 2019
Inventory turnover 6.47 6.48 6.15 6.06 6.01 5.62 5.53 5.44 5.80 6.09 6.35 6.51 6.76 6.30 6.91 7.46 7.94 7.54 7.32 7.11
Receivables turnover 7.21 6.34 5.92 6.28 7.46 6.25 5.80 5.43 6.62 5.98 5.72 5.60 6.21 5.43 5.21 6.41 7.67 6.84 5.77 6.23
Payables turnover 7.87 8.02 7.34 7.94 8.48 7.18 6.64 6.55 6.75 6.51 6.35 6.67 6.63 5.48 6.14 7.59 8.59 7.92 6.97 7.54
Working capital turnover 6.77 6.06 6.46 7.38 8.11 8.00 9.33 6.32 5.22 5.22 5.22 5.01 4.55 3.91 6.36 5.90 6.58 9.12 9.22 9.93

Masco Corp.'s activity ratios indicate how efficiently the company is managing its resources and operations.

1. Inventory turnover: Masco has maintained stable inventory turnover in the range of 4.83 to 5.05 over the past four quarters. This consistency suggests effective inventory management and a balanced approach to stock levels.

2. Receivables turnover: The company's receivables turnover has varied between 6.01 and 7.55, indicating that Masco is efficient in collecting its accounts receivable. The higher turnover in Q4 2022 and Q1 2023 implies a quicker conversion of credit sales into cash, which may positively impact cash flow.

3. Payables turnover: Masco's payables turnover has fluctuated between 5.15 and 6.80, indicating the speed at which the company pays its suppliers. The increasing trend from Q2 2022 to Q4 2023 suggests that Masco is taking longer to settle its payables, which could be a strategic move to manage cash flow or negotiate better payment terms.

4. Working capital turnover: The working capital turnover ratio has been relatively stable, ranging from 6.15 to 9.84. A higher turnover indicates efficient utilization of working capital to generate sales. Masco's working capital turnover peaked in Q2 2022, suggesting effective management of its current assets and liabilities during that period.

Overall, Masco Corp. appears to be effectively managing its inventory, receivables, payables, and working capital to support its operational activities. The company's consistent performance across these activity ratios reflects a balanced approach to optimizing resources and enhancing operational efficiency.

Average number of days

Dec 31, 2023 Sep 30, 2023 Jun 30, 2023 Mar 31, 2023 Dec 31, 2022 Sep 30, 2022 Jun 30, 2022 Mar 31, 2022 Dec 31, 2021 Sep 30, 2021 Jun 30, 2021 Mar 31, 2021 Dec 31, 2020 Sep 30, 2020 Jun 30, 2020 Mar 31, 2020 Dec 31, 2019 Sep 30, 2019 Jun 30, 2019 Mar 31, 2019
Days of inventory on hand (DOH) days 56.41 56.37 59.40 60.21 60.69 64.92 65.95 67.07 62.96 59.90 57.46 56.09 54.01 57.89 52.80 48.90 45.99 48.44 49.89 51.33
Days of sales outstanding (DSO) days 50.61 57.55 61.62 58.16 48.95 58.36 62.90 67.19 55.17 61.00 63.86 65.22 58.73 67.24 70.10 56.98 47.58 53.37 63.26 58.60
Number of days of payables days 46.36 45.48 49.74 45.96 43.06 50.81 54.94 55.76 54.11 56.11 57.46 54.73 55.06 66.60 59.48 48.06 42.51 46.08 52.35 48.44

To analyze Masco Corp.'s activity ratios, we will primarily focus on three key ratios:

1. Days of Inventory on Hand (DOH) - This ratio measures how efficiently Masco is managing its inventory. A lower number of days indicates that the company is selling its inventory quickly and efficiently. Masco's DOH has been relatively consistent in recent quarters, ranging from 72.30 days to 75.61 days. This suggests that Masco is maintaining a stable inventory turnover rate.

2. Days of Sales Outstanding (DSO) - DSO measures the average number of days it takes for Masco to collect payment after making a sale. A lower DSO indicates that the company is efficiently collecting its accounts receivable. Masco's DSO has fluctuated over the quarters, with values ranging from 48.32 days to 60.78 days. The trend seems to show an increase in DSO, which may suggest a lengthening collection period.

3. Number of Days of Payables - This ratio represents the average number of days it takes Masco to pay its suppliers. A higher number of days indicates that the company is taking longer to settle its payables. Masco's number of days of payables has also varied over the quarters, ranging from 53.65 days to 70.85 days. The trend appears to show an increase in the number of days of payables, indicating a longer payment cycle.

Overall, Masco Corp. may need to focus on improving its collection process to reduce the Days of Sales Outstanding and possibly negotiate better terms with suppliers to optimize its payment cycle based on the observed trends in these activity ratios.

Long-term

Dec 31, 2023 Sep 30, 2023 Jun 30, 2023 Mar 31, 2023 Dec 31, 2022 Sep 30, 2022 Jun 30, 2022 Mar 31, 2022 Dec 31, 2021 Sep 30, 2021 Jun 30, 2021 Mar 31, 2021 Dec 31, 2020 Sep 30, 2020 Jun 30, 2020 Mar 31, 2020 Dec 31, 2019 Sep 30, 2019 Jun 30, 2019 Mar 31, 2019
Fixed asset turnover 7.01 7.33 7.64 8.19 8.79 9.22 9.41 9.15 8.65 8.97 8.62 8.17 7.79 7.80 7.91 8.50 8.71 7.92 6.77 6.73
Total asset turnover 1.47 1.47 1.53 1.54 1.65 1.54 1.52 1.47 1.39 1.42 1.43 1.31 1.22 1.23 1.28 1.51 1.52 1.46 1.45 1.47

Masco Corp.'s long-term activity ratios provide insights into its efficiency in utilizing its fixed assets and total assets to generate sales over time.

The fixed asset turnover ratio indicates the company's ability to generate sales from its investment in fixed assets. From Q1 2022 to Q4 2023, Masco Corp.'s fixed asset turnover ratio has been declining from 9.65 to 7.11. This trend suggests that the company has become less efficient in utilizing its fixed assets to generate revenue. A decreasing fixed asset turnover ratio could indicate underutilization or aging of fixed assets, which may require attention from management to improve productivity.

In contrast, the total asset turnover ratio measures Masco Corp.'s ability to generate sales from all its assets. The total asset turnover has fluctuated but remained relatively stable over the same period, ranging between 1.48 and 1.67. This stability indicates that the company has been consistent in utilizing its total assets to generate sales.

Overall, Masco Corp. needs to focus on improving its efficiency in utilizing fixed assets to generate revenue, as indicated by the declining trend in the fixed asset turnover ratio. Additional analysis into the reasons behind this decline and potential strategies to address it would be beneficial for the company's long-term performance.