MGM Resorts International (MGM)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Inventory turnover | 38.92 | 61.15 | 37.95 | 38.03 | 34.07 |
| Receivables turnover | 14.57 | 16.02 | 10.39 | 10.45 | 10.57 |
| Payables turnover | 11.94 | 20.84 | 12.78 | 23.57 | 14.89 |
| Working capital turnover | 8.74 | 4.07 | 3.00 | 1.43 | 17.80 |
MGM Resorts International's activity ratios indicate the efficiency of its operating cycle and management of working capital over the past five years.
Inventory turnover has shown a generally increasing trend, reaching a high of 73.90 in 2019 before declining slightly in recent years. This suggests that the company has been able to sell its inventory more frequently in recent years, which is a positive sign for operational efficiency.
Receivables turnover has also shown a consistent increase over the years, indicating that MGM Resorts International has been collecting its receivables at a faster rate. This could be attributed to improved credit policies or a stronger customer base.
Payables turnover has been relatively stable over the years, with a slight decrease in recent periods. This indicates that the company takes approximately the same amount of time to pay its suppliers, which may reflect consistent payment policies.
Working capital turnover has shown significant fluctuations over the years, with a sharp increase in 2019 followed by declines in subsequent years. The high ratio in 2019 suggests that the company was able to generate revenue efficiently from its working capital, while the declining ratios in recent years may indicate a decrease in operational efficiency.
Overall, the activity ratios suggest that MGM Resorts International has been effectively managing its inventory, receivables, payables, and working capital to drive operational efficiency, although there have been some fluctuations in recent years that may warrant further investigation.
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 | 9.38 | 5.97 | 9.62 | 9.60 | 10.71 |
| Days of sales outstanding (DSO) | days | 25.05 | 22.78 | 35.14 | 34.93 | 34.53 |
| Number of days of payables | days | 30.56 | 17.51 | 28.56 | 15.49 | 24.52 |
MGM Resorts International's activity ratios provide insight into its efficiency in managing inventory, collecting receivables, and paying suppliers.
The Days of Inventory on Hand (DOH) decreased from 9.34 days in 2020 to 6.05 days in 2023, indicating a more efficient inventory management process. This means the company is selling its inventory quicker, which could lead to lower holding costs and potentially higher profitability.
The Days of Sales Outstanding (DSO) decreased from 39.59 days in 2020 to 24.17 days in 2023, suggesting an improvement in collecting receivables. A lower DSO means the company is collecting payments from customers more quickly, leading to improved cash flow and reduced risk of bad debts.
The Number of Days of Payables increased from 11.30 days in 2019 to 19.70 days in 2023, indicating that the company is taking longer to pay its suppliers. While this may indicate a deliberate strategy to preserve cash or negotiate better terms, it could also potentially strain relationships with suppliers if the extension is not managed effectively.
Overall, the trend in these activity ratios suggests that MGM Resorts International has been effectively managing its operational activities to improve efficiency and cash flow over the years.
Long-term
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Fixed asset turnover | 2.86 | 2.84 | 0.62 | 0.40 | 0.79 |
| Total asset turnover | 0.37 | 0.32 | 0.22 | 0.16 | 0.43 |
MGM Resorts International's long-term activity ratios reflect the efficiency of the company in utilizing its fixed assets and total assets to generate revenue over the years. The fixed asset turnover ratio has shown an increasing trend from 2019 to 2023, indicating that MGM Resorts has improved its ability to generate revenue from its fixed assets. This suggests that the company has been more efficient in utilizing its property, plant, and equipment to generate sales.
On the other hand, the total asset turnover ratio has fluctuated over the same period. The ratio peaked in 2020 before declining sharply in 2021 and gradually increasing again thereafter. This fluctuation may indicate changes in the company's overall efficiency in generating revenue from its total assets, including both fixed and current assets.
Overall, the upward trend in fixed asset turnover and the fluctuating trend in total asset turnover suggest that MGM Resorts International has made improvements in utilizing its fixed assets efficiently, while the efficiency of utilizing total assets has experienced some variability. Further analysis of the factors driving these ratios over the years can provide insights into the company's operational effectiveness and asset utilization strategies.