Mohawk Industries Inc (MHK)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Inventory turnover | 3.24 | 3.30 | 3.15 | 3.32 | 3.72 |
| Receivables turnover | — | — | — | — | — |
| Payables turnover | — | — | — | — | — |
| Working capital turnover | 6.50 | 4.53 | 4.15 | 4.89 | 3.19 |
Inventory Turnover:
Mohawk Industries Inc's inventory turnover ratio has shown a slight decline from 3.72 in 2020 to 3.24 in 2024. This indicates that the company is selling its inventory less frequently over the years, which may suggest potential issues related to demand, production inefficiencies, or excess inventory levels.
Receivables Turnover:
There is no data available for Mohawk Industries Inc's receivables turnover ratio for the years 2020-2024. As a result, it is difficult to assess how quickly the company is collecting its accounts receivable, which is crucial for understanding its efficiency in managing its outstanding customer payments.
Payables Turnover:
Similarly, there is no data provided for Mohawk Industries Inc's payables turnover ratio for the years 2020-2024. Without this information, it is challenging to evaluate how effectively the company is managing its trade credit and supplier payments.
Working Capital Turnover:
Mohawk Industries Inc's working capital turnover has seen an increasing trend from 3.19 in 2020 to 6.50 in 2024. This improvement suggests that the company is generating more revenue for each dollar of working capital invested, indicating improved efficiency in utilizing its current assets to support sales growth.
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 | 112.58 | 110.55 | 115.96 | 110.06 | 98.05 |
| Days of sales outstanding (DSO) | days | — | — | — | — | — |
| Number of days of payables | days | — | — | — | — | — |
Based on the provided data for Mohawk Industries Inc, let's analyze the activity ratios:
1. Days of Inventory on Hand (DOH):
- The DOH shows the number of days a company holds its inventory before it is sold.
- The trend shows an increase from 98.05 days on December 31, 2020, to 112.58 days on December 31, 2024.
- A higher DOH value can indicate slower inventory turnover, which may tie up funds in inventory and potentially signal inefficiencies in managing inventory levels.
2. Days of Sales Outstanding (DSO):
- Unfortunately, the data does not provide information on DSO, which is used to measure how long it takes for a company to collect its accounts receivable.
- Without this data, it is challenging to assess the effectiveness of Mohawk Industries Inc in collecting payments from customers.
3. Number of Days of Payables:
- Similarly, the data does not include details on the number of days of payables, which reflects the number of days a company takes to pay its suppliers.
- This ratio is crucial as a longer payment period can indicate favorable liquidity conditions but may also strain supplier relationships if payments are delayed excessively.
In general, a comprehensive analysis of all three activity ratios (DOH, DSO, and payables) is essential to evaluate the efficiency of Mohawk Industries Inc in managing its working capital and operational activities. The lack of data for DSO and payables limits a complete assessment, but the increasing trend in DOH warrants further investigation into the company's inventory management practices.
Long-term
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Fixed asset turnover | — | — | 2.32 | 2.23 | 2.08 |
| Total asset turnover | 0.85 | 0.82 | 0.83 | 0.79 | 0.67 |
The Fixed Asset Turnover ratio for Mohawk Industries Inc has shown a consistent upward trend from 2.08 in 2020 to 2.32 in 2022. This indicates that the company is generating more revenue relative to its investment in fixed assets over the years, reflecting improved efficiency in utilizing its property, plant, and equipment.
On the other hand, the Total Asset Turnover ratio has also been increasing gradually, from 0.67 in 2020 to 0.85 in 2024. This suggests that Mohawk Industries is generating more revenue in relation to its total assets, which could be attributed to effective asset management and utilization.
Overall, the upward trends in both the Fixed Asset Turnover and Total Asset Turnover ratios indicate that Mohawk Industries is efficiently utilizing its assets to generate sales, which is a positive sign for the company's long-term operational performance and financial health.