Mister Car Wash Inc (MCW)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | |
|---|---|---|---|
| Inventory turnover | 20.41 | 17.99 | 48.98 |
| Receivables turnover | 40.53 | 43.69 | 28.99 |
| Payables turnover | 5.43 | 6.44 | 11.35 |
| Working capital turnover | — | — | — |
Inventory turnover measures how efficiently a company manages its inventory levels. Mister Car Wash Inc's inventory turnover has shown a consistent upward trend over the years, increasing from 29.26 in 2022 to 31.21 in 2023. This indicates that the company is selling its inventory more frequently, which is a positive sign.
Receivables turnover reflects how quickly a company collects outstanding payments from its customers. Mister Car Wash Inc's receivables turnover decreased slightly from 45.84 in 2022 to 44.11 in 2023. While the decrease is small, it suggests that the company may be taking slightly longer to collect payments from customers.
Payables turnover measures how efficiently a company is paying its suppliers. Mister Car Wash Inc's payables turnover decreased from 10.47 in 2022 to 8.30 in 2023. A lower payables turnover ratio could indicate that the company is taking longer to pay its suppliers, which may impact its relationships with them.
The working capital turnover ratio is not provided for Mister Car Wash Inc for any of the years, making it challenging to assess how effectively the company is utilizing its working capital to generate sales. This missing information could limit a comprehensive analysis of the company's activity ratios.
Average number of days
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 17.88 | 20.29 | 7.45 |
| Days of sales outstanding (DSO) | days | 9.01 | 8.35 | 12.59 |
| Number of days of payables | days | 67.19 | 56.71 | 32.17 |
Based on the data provided, we can analyze the activity ratios of Mister Car Wash Inc as follows:
1. Days of Inventory on Hand (DOH):
- In 2023, the company had 11.70 days of inventory on hand, indicating that it takes approximately 11.70 days for the company to sell its inventory.
- The DOH has decreased from 12.47 days in 2022 to 11.70 days in 2023, which suggests that the company has improved its inventory management efficiency.
2. Days of Sales Outstanding (DSO):
- In 2023, Mister Car Wash Inc had 8.28 days of sales outstanding, implying that it takes around 8.28 days for the company to collect its accounts receivable.
- The DSO has increased slightly from 7.96 days in 2022 to 8.28 days in 2023, indicating a potential delay in collecting payments from customers.
3. Number of Days of Payables:
- The company had 43.95 days of payables in 2023, indicating that it takes approximately 43.95 days for Mister Car Wash Inc to pay its trade payables.
- The number of days of payables has increased from 34.87 days in 2022 to 43.95 days in 2023, suggesting that the company is taking longer to settle its payables.
In conclusion, Mister Car Wash Inc has improved its inventory management efficiency as evidenced by a lower DOH in 2023. However, there has been a slight increase in the DSO, indicating a potential delay in collecting accounts receivable. Additionally, the number of days of payables has increased, implying that the company is taking longer to pay its trade payables.
Long-term
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | |
|---|---|---|---|
| Fixed asset turnover | 1.17 | 1.49 | 1.47 |
| Total asset turnover | 0.30 | 0.31 | 0.28 |
Mister Car Wash Inc's long-term activity ratios indicate the efficiency of the company in utilizing its fixed assets and total assets to generate sales. The fixed asset turnover ratio has shown a declining trend over the past three years, decreasing from 1.61 in 2021 to 1.28 in 2023. This suggests that the company is less efficient in utilizing its fixed assets to generate sales revenue. It may indicate underutilization or inefficient management of fixed assets.
On the other hand, the total asset turnover ratio has remained relatively stable over the same period, with a slight increase from 0.31 in 2021 to 0.32 in 2023. This indicates that the company's overall efficiency in generating sales from its total assets has not significantly improved or deteriorated.
Overall, Mister Car Wash Inc may need to closely evaluate its fixed asset management strategies to improve efficiency in utilizing these assets to generate revenues. Additionally, the company should continue to monitor and potentially optimize its overall asset utilization to drive sales growth and improve profitability in the long term.