MGP Ingredients Inc (MGPI)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Inventory turnover | 1.14 | 1.53 | 1.83 | 1.74 | 2.10 |
| Receivables turnover | — | — | — | — | — |
| Payables turnover | — | — | — | — | — |
| Working capital turnover | 1.55 | 2.09 | 2.24 | 2.25 | 2.34 |
MGP Ingredients Inc's inventory turnover ratio has shown a declining trend over the past five years, dropping from 2.10 in 2020 to 1.14 in 2024. This suggests that the company is holding onto its inventory for a longer period, potentially indicating inefficiencies in managing and converting inventory into sales.
The receivables turnover ratio is not provided for any of the years, making it difficult to assess the company's effectiveness in collecting outstanding receivables from customers.
Similarly, the payables turnover ratio is not available for any of the years, which limits the insight into how efficiently MGP Ingredients Inc is managing its payables and settling its obligations with suppliers.
The working capital turnover ratio has also experienced a downward trajectory, decreasing from 2.34 in 2020 to 1.55 in 2024. This decline suggests that the company may be less efficient in generating sales revenue relative to its working capital investment.
Overall, while the inventory turnover and working capital turnover ratios provide some indication of MGP Ingredients Inc's activity efficiency, the lack of data for receivables and payables turnover ratios hinders a more comprehensive analysis of the company's overall operating performance and liquidity management.
Average number of days
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 319.20 | 238.06 | 199.88 | 209.86 | 173.46 |
| Days of sales outstanding (DSO) | days | — | — | — | — | — |
| Number of days of payables | days | — | — | — | — | — |
The Days of Inventory on Hand (DOH) for MGP Ingredients Inc have shown a fluctuating trend over the years, starting at 173.46 days on December 31, 2020, increasing to 319.20 days by December 31, 2024. This indicates that the company took longer to convert its inventory into sales as the days of inventory on hand increased significantly over the period.
On the other hand, the Days of Sales Outstanding (DSO) and Number of Days of Payables data are not available, suggesting that there is no information provided regarding the average number of days it takes for the company to collect payments from its customers and the average number of days it takes to pay its suppliers.
Overall, a high Days of Inventory on Hand (DOH) ratio can indicate inefficiencies in inventory management and potential liquidity issues if inventory levels are not effectively converted into sales. It would be beneficial to have more information on Days of Sales Outstanding (DSO) and Number of Days of Payables to assess the company's overall liquidity and efficiency further.
Long-term
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Fixed asset turnover | — | — | 3.32 | 3.02 | 3.00 |
| Total asset turnover | 0.50 | 0.60 | 0.68 | 0.60 | 1.08 |
The Fixed Asset Turnover ratio measures how efficiently a company is utilizing its fixed assets to generate sales. For MGP Ingredients Inc, the trend in this ratio has been positive, increasing from 3.00 in 2020 to 3.32 in 2022, indicating that the company is generating more revenue per dollar of fixed assets over time. However, there is missing data for 2023 and 2024 which limits a complete assessment of the trend.
On the other hand, the Total Asset Turnover ratio assesses how well a company is using all its assets to generate revenue. MGP Ingredients Inc's Total Asset Turnover ratio has been fluctuating, decreasing from 1.08 in 2020 to 0.50 in 2024. This decline suggests that the company might be less efficient in generating sales relative to its total assets during this period.
Overall, the Fixed Asset Turnover ratio indicates improvement in the utilization of fixed assets, while the Total Asset Turnover ratio exhibits a mixed trend, signifying varying efficiency in generating sales relative to all assets. Explanations behind these trends could include changes in production processes, asset utilization strategies, or changes in business operations.