Monarch Casino & Resort Inc (MCRI)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Inventory turnover | 13.92 | 12.93 | 42.67 | 21.62 | 31.12 |
| Receivables turnover | 38.55 | 13.79 | 11.04 | 6.44 | 44.15 |
| Payables turnover | 4.59 | 6.78 | 16.45 | 14.51 | 12.30 |
| Working capital turnover | — | — | — | — | — |
The activity ratios of Monarch Casino & Resort, Inc. provide insights into how efficiently the company manages its inventory, receivables, and payables.
Inventory turnover has shown an increasing trend over the past five years, with a notable improvement from 10.26 in 2020 to 29.00 in 2023. This suggests that the company has been able to sell through its inventory more efficiently, indicating effective inventory management.
On the other hand, receivables turnover has fluctuated over the years, reaching its peak at 44.15 in 2019 and dropping to 6.44 in 2020 before gradually increasing to 38.59 in 2023. The drastic variation in 2020 may indicate changes in the company's credit policies or customer base.
Payables turnover has remained relatively stable, hovering around 3 over the last five years. A payables turnover ratio of 3.13 in 2023 indicates that the company pays its suppliers approximately every 3 months, reflecting a consistent payment cycle.
Unfortunately, there is no data provided for the working capital turnover ratio, which could shed light on how effectively the company utilizes its working capital to generate revenue. It would be beneficial to have this information to assess the overall efficiency of Monarch Casino & Resort, Inc. in terms of managing its current assets and liabilities.
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 | 26.21 | 28.24 | 8.55 | 16.88 | 11.73 |
| Days of sales outstanding (DSO) | days | 9.47 | 26.47 | 33.07 | 56.67 | 8.27 |
| Number of days of payables | days | 79.50 | 53.86 | 22.19 | 25.15 | 29.67 |
Activity ratios provide insight into how efficiently a company manages its assets and liabilities. Let's analyze Monarch Casino & Resort, Inc.'s activity ratios based on the given data.
1. Days of Inventory on Hand (DOH):
- The trend in DOH shows that Monarch Casino & Resort, Inc. has been able to reduce the number of days it holds inventory from 2019 to 2023.
- A lower DOH indicates that the company is managing its inventory more efficiently and turning it into sales quicker, which can lead to lower holding costs and better cash flow.
2. Days of Sales Outstanding (DSO):
- Monarch Casino & Resort, Inc. has shown fluctuations in DSO over the years, with significant spikes in 2020 and 2021.
- A lower DSO is typically favorable as it indicates the company is collecting its accounts receivable faster, which can improve cash flow and reduce the risk of bad debts.
3. Number of Days of Payables:
- The trend in the number of days of payables shows fluctuations over the years, with a notable increase in 2020 compared to previous years.
- A higher number of days of payables suggests that the company is taking longer to pay its suppliers, which can sometimes indicate cash flow problems or strained supplier relationships.
Overall, Monarch Casino & Resort, Inc. has shown improvements in inventory management and accounts receivable collection over the years, but it should monitor its payables more closely to ensure it maintains good relationships with suppliers while managing cash flow effectively.
Long-term
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Fixed asset turnover | 0.86 | 0.82 | 0.68 | 0.32 | 0.50 |
| Total asset turnover | 0.74 | 0.69 | 0.57 | 0.27 | 0.41 |
The fixed asset turnover ratio for Monarch Casino & Resort, Inc. has been relatively stable over the past five years, ranging from 0.33 to 0.86. This ratio indicates that the company generates sales revenue in relation to its investment in fixed assets. A higher fixed asset turnover ratio suggests that the company is using its fixed assets more efficiently to generate sales.
On the other hand, the total asset turnover ratio has also shown an increasing trend over the same period, from 0.27 to 0.74. This ratio reflects the company's ability to generate sales relative to its total assets. A higher total asset turnover ratio indicates that the company is generating more sales from its total asset base.
Overall, both the fixed asset turnover and total asset turnover ratios have improved over the years, suggesting that Monarch Casino & Resort, Inc. is utilizing its assets more effectively to generate revenue. This indicates positive operational efficiency and asset utilization, which are favorable indicators for the company's long-term growth and profitability.