Mohawk Industries Inc (MHK)
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 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Inventory turnover | 4.32 | 4.45 | 4.24 | 4.05 | 4.15 | 3.95 | 3.71 | 4.08 | 4.15 | 4.41 | 4.64 | 4.62 | 4.71 | 4.86 | 4.66 | 4.17 | 4.08 | 3.96 | 3.87 | 3.89 |
| Receivables turnover | 5.90 | 5.71 | 5.39 | 5.59 | 6.13 | 5.88 | 5.55 | 5.62 | 6.05 | 5.87 | 5.35 | 5.45 | 5.56 | 5.43 | 5.83 | 5.94 | 6.51 | 5.58 | 5.49 | 5.72 |
| Payables turnover | 10.62 | 10.36 | 9.37 | — | 10.59 | — | — | — | 8.07 | — | — | — | — | — | — | — | — | — | — | — |
| Working capital turnover | 4.50 | 4.79 | 4.39 | 4.18 | 4.13 | 6.05 | 5.80 | 6.78 | 4.86 | 4.02 | 3.89 | 3.86 | 3.18 | 3.36 | 3.22 | 5.61 | 5.79 | 6.18 | 9.06 | 7.95 |
The activity ratios of Mohawk Industries, Inc. show fluctuations over the past eight quarters, reflecting changes in the company's efficiency in managing its operations.
- Inventory turnover has ranged from 3.01 to 3.39, with the highest turnover occurring in Q3 2023. This indicates that the company is selling and replacing its inventory approximately 3 to 3.4 times per year. A higher turnover is generally more favorable as it suggests efficient management of inventory levels.
- Receivables turnover has varied between 5.43 and 6.16, with the highest turnover in Q4 2022. This metric reflects how efficiently the company is collecting on its credit sales. A higher turnover suggests that the company is collecting its receivables more quickly.
- Payables turnover has ranged from 6.25 to 8.12, with the highest turnover in Q4 2023. This ratio indicates how quickly the company is paying off its suppliers. A higher turnover may suggest that the company is taking advantage of credit terms or managing its cash flow effectively.
- Working capital turnover has fluctuated between 4.15 and 6.82, with the highest turnover in Q1 2022. This ratio captures how effectively the company is using its working capital to generate revenue. A higher turnover indicates that the company is generating more revenue per unit of working capital.
Overall, Mohawk Industries, Inc. has seen some variability in its activity ratios, with certain quarters showing stronger efficiency in managing inventory, receivables, payables, and working capital turnover. Monitoring these ratios over time can help assess the company's operational effectiveness and potential areas for improvement.
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 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 84.46 | 82.00 | 86.15 | 90.19 | 88.00 | 92.36 | 98.28 | 89.41 | 88.00 | 82.70 | 78.65 | 78.98 | 77.43 | 75.17 | 78.41 | 87.58 | 89.46 | 92.23 | 94.27 | 93.77 |
| Days of sales outstanding (DSO) | days | 61.82 | 63.88 | 67.69 | 65.28 | 59.56 | 62.04 | 65.77 | 64.99 | 60.33 | 62.22 | 68.27 | 66.95 | 65.64 | 67.23 | 62.64 | 61.40 | 56.06 | 65.47 | 66.50 | 63.76 |
| Number of days of payables | days | 34.35 | 35.22 | 38.95 | — | 34.46 | — | — | — | 45.21 | — | — | — | — | — | — | — | — | — | — | — |
To analyze Mohawk Industries, Inc.'s activity ratios, we will focus on Days of Inventory on Hand (DOH), Days of Sales Outstanding (DSO), and Number of Days of Payables.
1. Days of Inventory on Hand (DOH): This ratio measures how efficiently the company manages its inventory. Mohawk Industries' average DOH for Q4 2023 to Q1 2022 varied between 110.10 days and 121.40 days. A decrease in DOH indicates better inventory management, as the company is selling inventory faster. Mohawk's DOH has shown a decreasing trend over the recent quarters, which is a positive sign.
2. Days of Sales Outstanding (DSO): DSO measures how quickly the company collects payments from its customers. Mohawk's DSO ranged from 59.24 days to 67.27 days over the same period. A lower DSO is favorable as it indicates faster collection of accounts receivables. The company's DSO has been relatively stable, with minor fluctuations, suggesting consistent collection practices.
3. Number of Days of Payables: This ratio reflects the number of days it takes for the company to pay its suppliers. Mohawk's payables days ranged from 44.97 days to 58.39 days. A longer period indicates that the company is taking more time to pay its suppliers, which can be beneficial for cash flow management. Mohawk's payables days have been fluctuating but generally within a reasonable range.
In summary, Mohawk Industries, Inc. has shown improvements in inventory management efficiency, stable collection practices, and relatively consistent payment terms to suppliers. Further monitoring of these activity ratios will provide insights into the company's operational effectiveness and liquidity management.
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 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Fixed asset turnover | 2.22 | 2.32 | 2.27 | 2.32 | 2.50 | 2.60 | 2.55 | 2.52 | 2.40 | 2.48 | 2.42 | 2.23 | 2.07 | 2.11 | 2.08 | 2.19 | 2.12 | 2.17 | 2.12 | 2.14 |
| Total asset turnover | 0.82 | 0.85 | 0.77 | 0.78 | 0.83 | 0.85 | 0.80 | 0.80 | 0.78 | 0.76 | 0.73 | 0.69 | 0.66 | 0.67 | 0.69 | 0.74 | 0.74 | 0.74 | 0.72 | 0.73 |
The fixed asset turnover ratio for Mohawk Industries, Inc. has been declining slightly over the past eight quarters, from 2.52 in Q4 2022 to 2.23 in Q4 2023. This indicates that the company generated $2.23 in sales for every dollar invested in fixed assets at the end of Q4 2023. The downward trend may suggest that the efficiency of utilizing fixed assets to generate sales has decreased.
On the other hand, the total asset turnover ratio has also shown a decreasing trend, from 0.83 in Q4 2022 to 0.82 in Q4 2023. This ratio indicates that Mohawk Industries generated $0.82 in sales for every dollar of assets owned at the end of Q4 2023. The decline in total asset turnover may imply that the company is becoming less efficient in generating sales relative to its total assets.
In sum, the decreasing trends in both fixed asset turnover and total asset turnover ratios for Mohawk Industries over the past year suggest potential issues with asset utilization and operational efficiency that may warrant further investigation.