Martin Marietta Materials Inc (MLM)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Inventory turnover | 4.18 | 4.81 | 5.42 | 5.40 | 4.90 |
| Receivables turnover | — | — | — | — | — |
| Payables turnover | — | — | — | — | — |
| Working capital turnover | 4.28 | 2.47 | 4.30 | 4.25 | 4.05 |
Martin Marietta Materials Inc's inventory turnover has shown a generally positive trend over the past five years, increasing from 4.90 in 2020 to 5.42 in 2022 before slightly declining to 4.18 in 2024. This indicates that the company is managing its inventory efficiently, with higher turnover rates implying a faster conversion of inventory into sales.
The receivables turnover ratio data is not available for the years provided, indicating that the company has not disclosed this information or that there may be minimal credit sales relative to total sales.
Similarly, the payables turnover ratio data is also not provided for the years in question, making it challenging to assess how effectively the company is managing its trade payables.
The working capital turnover ratio has shown fluctuation, with a peak of 4.30 in 2022 and a significant drop to 2.47 in 2023 before rebounding to 4.28 in 2024. This ratio indicates how efficiently the company is using its working capital to generate sales. A higher ratio suggests better utilization of working capital to generate revenue.
Overall, the analysis of Martin Marietta Materials Inc's activity ratios highlights the company's effective management of inventory and working capital, but the lack of receivables and payables turnover data limits a comprehensive assessment of its overall operating efficiency.
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 | 87.37 | 75.89 | 67.32 | 67.57 | 74.43 |
| Days of sales outstanding (DSO) | days | — | — | — | — | — |
| Number of days of payables | days | — | — | — | — | — |
Based on the data provided for Martin Marietta Materials Inc, let's analyze the activity ratios:
1. Days of Inventory on Hand (DOH):
- The company's DOH has shown a decreasing trend from 74.43 days in 2020 to 87.37 days in 2024. This indicates that the company is holding inventory for a shorter period, which can be positive as it may reduce storage costs and the risk of obsolescence.
2. Days of Sales Outstanding (DSO):
- Unfortunately, specific data on Days of Sales Outstanding (DSO) is not provided for the years under review. DSO typically measures how long it takes for the company to collect payments from its customers after making a sale. Without this data, we cannot evaluate the efficiency of the company in collecting its accounts receivable promptly.
3. Number of Days of Payables:
- Similar to DSO, information regarding the Number of Days of Payables is not available for the years in question. This ratio measures how long the company takes to pay its suppliers. It is essential for managing cash flow effectively and optimizing working capital.
In conclusion, Martin Marietta Materials Inc has shown improvements in managing its inventory efficiently over the years. However, without details on DSO and the Number of Days of Payables, a comprehensive analysis of the company's overall activity and cash flow management is limited.
Long-term
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Fixed asset turnover | — | — | 0.92 | 0.80 | 0.90 |
| Total asset turnover | 0.36 | 0.45 | 0.41 | 0.38 | 0.45 |
To analyze Martin Marietta Materials Inc's long-term activity ratios, we will focus on two key metrics: Fixed Asset Turnover and Total Asset Turnover.
1. Fixed Asset Turnover:
- The Fixed Asset Turnover ratio measures how efficiently the company is utilizing its fixed assets to generate revenue. A higher ratio indicates better utilization of fixed assets.
- From 2020 to 2022, the Fixed Asset Turnover ratio decreased slightly from 0.90 to 0.80 before increasing to 0.92 in 2022. This suggests that the company improved its efficiency in utilizing fixed assets in 2022.
- The absence of data for 2023 and 2024 prevents a complete trend analysis for this ratio.
2. Total Asset Turnover:
- The Total Asset Turnover ratio evaluates the company's ability to generate sales from its total assets. A higher ratio signifies more efficient use of all assets in generating revenue.
- Martin Marietta Materials Inc's Total Asset Turnover ratio declined from 0.45 in 2020 to 0.38 in 2021, indicating a decrease in efficiency in asset utilization. It slightly recovered to 0.41 in 2022 but then fell again to 0.36 in 2024, reflecting potential challenges in generating sales relative to total assets.
- The ratio for 2023 saw a slight improvement to 0.45, bringing it close to the 2020 level, indicating a temporary improvement in asset utilization efficiency.
Overall, the company experienced fluctuations in its long-term activity ratios, with improvements in fixed asset turnover in 2022, while total asset turnover showed a mixed performance with a general downward trend. Further analysis of the company's strategies and operational efficiency may be required to understand these fluctuations better.