MasTec Inc (MTZ)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Inventory turnover | 112.73 | 83.75 | 83.08 | 66.87 | 64.40 |
| Receivables turnover | 8.76 | 6.99 | 7.80 | 8.06 | 8.45 |
| Payables turnover | 9.81 | 8.90 | 11.60 | 10.49 | 12.05 |
| Working capital turnover | 10.55 | 7.17 | 7.30 | 6.70 | 7.53 |
MasTec Inc's activity ratios provide insights into the efficiency of the company's operations in managing key aspects of its working capital.
1. Inventory turnover: MasTec has shown a consistent improvement in managing its inventory over the years, with a significant increase from 64.40 in 2019 to 112.73 in 2023. This indicates that the company is selling its inventory at a faster rate, which could lead to better cash flow and reduced holding costs.
2. Receivables turnover: The receivables turnover ratio has fluctuated over the years, but it remains relatively stable, reflecting the company's ability to collect its outstanding receivables efficiently. The ratio of 8.76 in 2023 indicates that MasTec collects its receivables approximately 8.76 times a year.
3. Payables turnover: MasTec's payables turnover ratio has shown a slight decrease from 12.05 in 2019 to 9.81 in 2023. This suggests that the company is taking slightly longer to pay its suppliers, which may have implications for cash management and supplier relationships.
4. Working capital turnover: The working capital turnover ratio has generally increased over the years, demonstrating MasTec's ability to generate revenue relative to its net working capital. A higher ratio, such as 10.55 in 2023, indicates that the company efficiently utilizes its working capital to generate sales.
Overall, MasTec Inc's activity ratios show improvements in inventory management and working capital efficiency, while also highlighting the need to monitor payables turnover to maintain a balance between cash flow and supplier relationships.
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 | 3.24 | 4.36 | 4.39 | 5.46 | 5.67 |
| Days of sales outstanding (DSO) | days | 41.69 | 52.25 | 46.79 | 45.30 | 43.21 |
| Number of days of payables | days | 37.20 | 41.00 | 31.46 | 34.78 | 30.30 |
MasTec Inc's activity ratios indicate how efficiently the company manages its inventory, collects receivables, and pays its payables.
1. Days of Inventory on Hand (DOH): MasTec has improved its inventory management over the past five years, with the number of days of inventory on hand decreasing from 5.67 days in 2019 to 3.24 days in 2023. This suggests that the company is able to turn over its inventory quickly, which is generally considered a positive sign of operational efficiency.
2. Days of Sales Outstanding (DSO): The days of sales outstanding show a fluctuating trend, but overall there seems to be an improvement in collecting receivables efficiently. The DSO decreased from 43.21 days in 2019 to 41.69 days in 2023. A lower DSO indicates that MasTec is better at collecting payments from its customers in a timely manner.
3. Number of Days of Payables: MasTec's days of payables have varied over the years but have stayed within a relatively stable range. The number of days of payables increased slightly from 30.30 days in 2019 to 37.20 days in 2023. This indicates that the company may be taking slightly longer to pay its suppliers, which could impact its cash flow management.
Overall, MasTec Inc seems to be efficiently managing its inventory, collecting receivables, and paying its payables, as evidenced by the trends in its activity ratios, although further analysis and comparison with industry benchmarks would provide a more comprehensive assessment of its performance in these areas.
Long-term
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Fixed asset turnover | 10.18 | 8.02 | 8.22 | 6.43 | 7.93 |
| Total asset turnover | 1.28 | 1.05 | 1.12 | 1.21 | 1.44 |
The long-term activity ratios for MasTec Inc have shown varying trends over the past five years. The fixed asset turnover ratio, which measures how efficiently the company generates revenue from its fixed assets, has fluctuated with a peak of 10.18 in 2023 and a low of 6.43 in 2020. This indicates that the company has been able to utilize its fixed assets more efficiently in recent years.
On the other hand, the total asset turnover ratio, which reflects how well the company generates sales from all its assets, has shown a declining trend from 1.44 in 2019 to 1.28 in 2023. This may suggest that MasTec Inc is not effectively leveraging all its assets to generate sales.
Overall, while the company has improved its efficiency in utilizing fixed assets, there may be room for improvement in optimizing the utilization of total assets to generate sales. This analysis provides insights into MasTec Inc's management of long-term assets to drive revenue generation.