Marathon Petroleum Corp (MPC)

Activity ratios

Short-term

Turnover ratios

	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Inventory turnover	14.16	17.54	14.03	9.71	11.76
Receivables turnover	12.74	13.10	10.83	11.93	15.75
Payables turnover	9.59	10.11	8.25	9.95	10.27
Working capital turnover	12.36	11.60	9.48	5.44	9.17

Inventory turnover measures how efficiently a company is managing its inventory. Marathon Petroleum Corp's inventory turnover has fluctuated over the past five years, ranging from 8.22 to 17.18. A higher inventory turnover indicates that the company is selling its inventory more quickly, which can be seen as a positive sign.

Receivables turnover reflects how well a company is collecting payments from its customers. Marathon Petroleum Corp's receivables turnover has shown some variability, with values ranging from 10.92 to 15.77. A higher receivables turnover suggests that the company is collecting payments more efficiently.

Payables turnover indicates how quickly a company is paying its suppliers. Marathon Petroleum Corp's payables turnover has remained relatively stable over the years, ranging from 8.03 to 9.91. A higher payables turnover ratio indicates that the company is managing its payables effectively.

Working capital turnover measures how efficiently a company is utilizing its working capital to generate sales. Marathon Petroleum Corp's working capital turnover has varied significantly, with values ranging from 5.54 to 30.85. A higher working capital turnover ratio indicates that the company is efficiently using its working capital to generate revenue.

Overall, Marathon Petroleum Corp has demonstrated strong efficiency in managing its inventory, receivables, payables, and working capital over the years, with some fluctuations in performance. The company's ability to effectively turn over its resources indicates sound operational management.

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	25.78	20.81	26.01	37.60	31.04
Days of sales outstanding (DSO)	days	28.64	27.87	33.71	30.61	23.18
Number of days of payables	days	38.08	36.09	44.25	36.68	35.53

Marathon Petroleum Corp's activity ratios, which include Days of Inventory on Hand (DOH), Days of Sales Outstanding (DSO), and Number of Days of Payables, provide insights into the efficiency of the company's operations and management of working capital.

The Days of Inventory on Hand (DOH) measures how long, on average, inventory is held before being sold. In 2023, the DOH increased to 26.45 days from 21.24 days in 2022. This suggests that Marathon Petroleum Corp held inventory for a slightly longer period before selling it, which could tie up capital and impact liquidity.

The Days of Sales Outstanding (DSO) indicates the average number of days it takes to collect payment after a sale is made. The DSO for Marathon Petroleum Corp increased slightly from 27.60 days in 2022 to 28.40 days in 2023. A higher DSO could signal potential issues with credit policies or collection procedures.

The Number of Days of Payables measures the average number of days it takes for the company to pay its suppliers. Marathon Petroleum Corp's Number of Days of Payables increased to 39.07 days in 2023 from 36.85 days in 2022. A longer payment period could indicate that the company is taking longer to settle its payables, which may have implications for supplier relationships.

In summary, Marathon Petroleum Corp's activity ratios suggest a moderate increase in inventory holding period, a slight increase in the collection period for sales, and an extended payment period to suppliers in 2023. These changes may warrant further analysis to understand their impact on the company's operational efficiency and working capital management.

Long-term

	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Fixed asset turnover	4.37	5.14	3.37	1.76	3.03
Total asset turnover	1.72	1.96	1.40	0.81	1.26

Looking at Marathon Petroleum Corp's long-term activity ratios over the last five years, we can see some interesting trends. The fixed asset turnover ratio has fluctuated during this period, with a significant peak in 2022 at 5.00 and a low in 2020 at 1.79. The ratio indicates how efficiently the company is using its fixed assets to generate revenue, and a higher ratio is generally favorable as it signifies better utilization of these assets.

In comparison, the total asset turnover ratio has also varied over the years, with a peak in 2022 at 1.98 and a low in 2020 at 0.82. This ratio measures how efficiently the company is using all its assets to generate sales. A higher total asset turnover ratio suggests that the company is making effective use of its total assets to generate revenue.

Overall, Marathon Petroleum Corp's long-term activity ratios show fluctuations over the years, with some improvements in asset turnover efficiency in certain periods. It is important for investors and stakeholders to monitor these ratios to assess the company's operational performance and efficiency in utilizing its assets effectively to generate revenue.