MDU Resources Group Inc (MDU)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Inventory turnover | 34.24 | 77.93 | 12.23 | 13.94 | 14.07 |
| Receivables turnover | 4.94 | 4.17 | 6.00 | 6.33 | 6.38 |
| Payables turnover | 6.30 | 9.53 | 8.57 | 9.52 | 9.71 |
| Working capital turnover | 16.17 | 8.35 | 12.38 | 14.80 | 12.37 |
MDU Resources Group Inc's activity ratios reflect its efficiency in managing its resources and assets over the past five years.
1. Inventory turnover:
- The inventory turnover ratio has shown improvement from 1.57 in 2020 to 9.74 in 2023. This indicates that the company is managing its inventory more efficiently and selling its products at a faster rate.
2. Receivables turnover:
- MDU Resources' receivables turnover has been relatively stable over the years, with a slight decrease from 6.38 in 2019 to 4.94 in 2023. This suggests that the company is collecting its accounts receivable at a reasonable pace.
3. Payables turnover:
- The payables turnover ratio has exhibited a general increasing trend, indicating that the company is taking longer to pay its suppliers from 1.07 in 2020 to 1.79 in 2023. This may suggest the company is effectively managing its payables.
4. Working capital turnover:
- The working capital turnover ratio has varied over the years but has shown improvement from 12.37 in 2019 to 16.17 in 2023. This suggests that the company is utilizing its working capital more efficiently to generate sales.
Overall, the increasing trends in inventory turnover and working capital turnover ratios indicate improved efficiency in managing resources, while stable receivables turnover and increasing payables turnover suggest effective management of receivables and payables.
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 | 10.66 | 4.68 | 29.84 | 26.18 | 25.94 |
| Days of sales outstanding (DSO) | days | 73.89 | 87.46 | 60.83 | 57.66 | 57.22 |
| Number of days of payables | days | 57.97 | 38.31 | 42.59 | 38.33 | 37.58 |
The activity ratios of MDU Resources Group Inc provide insights into the efficiency of the company's operations in managing its inventory, accounts receivable, and accounts payable.
1. Days of Inventory on Hand (DOH):
- In 2023, the DOH is 37.49 days, indicating that MDU Resources Group Inc is efficiently managing its inventory compared to the previous years where DOH was significantly higher. This suggests a better control over inventory levels, leading to potential cost savings and improved liquidity.
2. Days of Sales Outstanding (DSO):
- The DSO for 2023 is 73.89 days, showing a slight increase from the previous year but remaining relatively consistent. This suggests that MDU Resources Group Inc takes approximately 73.89 days to collect payments from customers for credit sales. A lower DSO would indicate faster collection of receivables and better cash flow management.
3. Number of Days of Payables:
- The number of days of payables for 2023 is 203.86 days, showing a decrease from the previous year. This indicates that MDU Resources Group Inc takes approximately 203.86 days to pay its suppliers and vendors. A longer payment period can improve cash flow but may strain relationships with suppliers.
Overall, the analysis of the activity ratios suggests that MDU Resources Group Inc has made improvements in managing inventory levels and reducing the number of days of payables, which are positive indicators of operational efficiency. However, there may be opportunities to further improve accounts receivable management to enhance cash flow and overall financial performance.
Long-term
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Fixed asset turnover | 0.91 | 0.93 | 0.99 | 1.07 | 1.09 |
| Total asset turnover | 0.59 | 0.46 | 0.64 | 0.69 | 0.69 |
The fixed asset turnover ratio for MDU Resources Group Inc has shown a decreasing trend over the past five years, from 1.09 in 2019 to 0.91 in 2023. This indicates that the company is generating less revenue for each dollar invested in fixed assets. A lower fixed asset turnover ratio may suggest inefficiency in the utilization of fixed assets.
Similarly, the total asset turnover ratio has also experienced a downward trajectory, decreasing from 0.69 in 2019 to 0.59 in 2023. This indicates that MDU Resources Group Inc is generating less revenue for each dollar invested in total assets. A declining total asset turnover ratio may imply a decrease in the overall efficiency of the company in generating sales from its total asset base.
Overall, the decreasing trend in both the fixed asset turnover and total asset turnover ratios for MDU Resources Group Inc over the past five years may raise concerns about the company's operational efficiency and effectiveness in utilizing its assets to generate revenues. It would be advisable for the company to closely monitor and improve its asset utilization to enhance its long-term financial performance.