Mister Car Wash Inc (MCW)
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 | |
|---|---|---|---|---|---|---|---|---|
| Inventory turnover | 17.04 | 15.77 | 17.36 | 17.19 | 15.10 | 15.81 | 19.38 | 42.95 |
| Receivables turnover | 40.53 | 40.49 | 34.13 | 55.36 | 43.69 | 45.76 | 46.58 | 53.57 |
| Payables turnover | 4.53 | 4.18 | 3.98 | 4.66 | 5.40 | 5.09 | 5.39 | 8.88 |
| Working capital turnover | — | — | — | — | — | — | — | — |
Mister Car Wash Inc's activity ratios provide insights into how efficiently the company is managing its operations.
1. Inventory turnover:
- The inventory turnover ratio indicates how many times the company's inventory is sold and replaced during a period.
- Mister Car Wash Inc's inventory turnover has been consistently high, ranging from 29.26 to 32.78 over the past five quarters.
- This indicates that the company is effectively managing its inventory levels and quickly converting inventory into sales, which is a positive sign for operational efficiency.
2. Receivables turnover:
- The receivables turnover ratio measures how efficiently the company is collecting payments from customers.
- Mister Car Wash Inc's receivables turnover has fluctuated between 36.49 and 58.68 over the past five quarters, with a notable increase in Q1 2023.
- A higher turnover ratio indicates that the company is collecting payments from customers at a faster rate, which is a positive indicator of liquidity and effective credit management.
3. Payables turnover:
- The payables turnover ratio assesses how quickly the company is paying off its suppliers or trade payables.
- Mister Car Wash Inc's payables turnover has ranged from 7.51 to 10.47 over the past five quarters, with a decreasing trend.
- A lower payables turnover ratio suggests that the company is taking longer to pay its suppliers, which could imply a weaker bargaining power or potential liquidity concerns.
4. Working capital turnover:
- The working capital turnover ratio measures how efficiently the company is utilizing its working capital to generate sales.
- Data for this ratio is missing from the provided table, which limits our ability to assess how effectively Mister Car Wash Inc is utilizing its working capital.
In conclusion, Mister Car Wash Inc's activity ratios, particularly inventory turnover and receivables turnover, suggest strong operational efficiency and effective management of inventory and customer payments. The decreasing trend in payables turnover warrants further investigation to understand the company's payment practices and supplier relationships.
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 | ||
|---|---|---|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 21.42 | 23.15 | 21.02 | 21.24 | 24.17 | 23.09 | 18.83 | 8.50 |
| Days of sales outstanding (DSO) | days | 9.01 | 9.01 | 10.69 | 6.59 | 8.35 | 7.98 | 7.84 | 6.81 |
| Number of days of payables | days | 80.49 | 87.32 | 91.77 | 78.41 | 67.57 | 71.67 | 67.66 | 41.12 |
To evaluate the efficiency of Mister Car Wash Inc's inventory management, Days of Inventory on Hand (DOH) is considered. The DOH has been fairly consistent over the five quarters, ranging from 11.13 to 12.47 days. A lower DOH indicates that the company is efficiently managing its inventory and converting it into sales. Mister Car Wash Inc's DOH shows that the company is able to quickly turn over its inventory, which is a positive sign for efficient operations.
Moving on to Days of Sales Outstanding (DSO), this ratio reflects the average number of days it takes for the company to collect revenue after a sale is made. In this case, the DSO has fluctuated between 6.22 and 10.00 days. A lower DSO indicates efficient credit and collection policies, as well as a faster cash conversion cycle. Mister Car Wash Inc's DSO shows that the company has been able to collect revenues relatively quickly over the quarters, minimizing the time it takes to convert sales into cash.
Lastly, the Number of Days of Payables ratio reveals how long the company takes to pay its suppliers. Mister Car Wash Inc's number of days of payables has fluctuated from 34.87 to 48.61 days over the five quarters. A higher number of days of payables could indicate favorable credit terms with suppliers, potentially improving cash flow and liquidity. However, it is essential to strike a balance to avoid strained supplier relationships.
In conclusion, Mister Car Wash Inc appears to have efficient inventory management and collection practices based on the analysis of its activity ratios. The company's ability to swiftly turn over inventory, collect revenues promptly, and manage payables efficiently are positive indicators of its operational effectiveness and financial health.
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 | |
|---|---|---|---|---|---|---|---|---|
| Fixed asset turnover | 1.17 | 1.27 | 1.41 | 1.40 | 1.49 | 1.55 | 1.48 | 1.52 |
| Total asset turnover | 0.30 | 0.29 | 0.30 | 0.31 | 0.31 | 0.30 | 0.30 | 0.30 |
The fixed asset turnover ratio for Mister Car Wash Inc has shown a slight decrease from Q4 2022 to Q4 2023, indicating that the company generated less revenue for each dollar invested in fixed assets. This may suggest a decrease in operational efficiency or a decrease in the utilization of fixed assets. However, the ratio remains relatively stable over the quarters, indicating consistent performance in generating revenue from fixed assets.
On the other hand, the total asset turnover ratio has remained constant at 0.32 from Q1 2023 to Q3 2023, with a slight decrease to 0.33 in Q4 2022. This suggests that the company generates $0.32 in revenue for each dollar of total assets invested. The stability of this ratio indicates consistent efficiency in generating revenue from all assets, including fixed and current assets.
Overall, while the fixed asset turnover ratio has shown a slight decrease, the total asset turnover ratio has remained relatively stable for Mister Car Wash Inc. This indicates that the company has been successful in efficiently utilizing its assets to generate revenue, albeit with a slight decline in the most recent quarter.