Murphy Oil Corporation (MUR)

Short-term

Turnover ratios

The analysis of Murphy Oil Corporation's activity ratios reveals the following insights:

1. Inventory Turnover:
- The inventory turnover ratio fluctuates over time, ranging from a low of 23.86 in March 2021 to a high of 38.82 in December 2024.
- A higher inventory turnover indicates that the company is efficiently managing its inventory levels and selling products more quickly.

2. Receivables Turnover:
- The data shows that there is no information available for the receivables turnover ratio, suggesting that the company's performance in collecting accounts receivable is not provided or not applicable.

3. Payables Turnover:
- Similar to receivables turnover, no data is available for the payables turnover ratio, indicating that information on how quickly the company pays its suppliers is not provided or not relevant.

4. Working Capital Turnover:
- The working capital turnover ratio demonstrates the efficiency of a company in generating sales revenue from its working capital.
- The available data shows variability in this ratio, with significant values such as 25.83 in June 2020 and a lower value of 6.17 in December 2020, suggesting changes in the effectiveness of utilizing working capital to generate revenue over time.

In conclusion, while the inventory turnover ratio indicates varying levels of efficiency in managing inventory, the lack of data for receivables and payables turnover makes it challenging to assess the company's performance in managing receivables and payables. The fluctuation in the working capital turnover ratio suggests changes in the company's efficiency in generating sales revenue from its working capital.

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Average number of days

Based on the provided data for Murphy Oil Corporation's activity ratios:

1. Days of Inventory on Hand (DOH):
- The DOH measures how many days it takes for a company to convert its inventory into sales.
- Murphy Oil Corporation's DOH has fluctuated over the periods, ranging from a low of 9.40 days to a high of 15.30 days.
- A lower DOH generally indicates efficient inventory management, while a higher DOH may suggest excess inventory or slow sales.
- Murphy Oil Corporation should aim to optimize its inventory levels to avoid tying up excess capital in inventory.

2. Days of Sales Outstanding (DSO):
- Unfortunately, there is no data provided for DSO, which measures how long it takes for a company to collect its accounts receivable.
- DSO is a crucial metric for assessing a company's liquidity and efficiency in collecting payments from customers.
- Murphy Oil Corporation should monitor its DSO to ensure timely collection of receivables and improve cash flow.

3. Number of Days of Payables:
- Similar to DSO, there is no data available for the number of days of payables, which reflects how long it takes for a company to pay its suppliers.
- Tracking this metric is essential for managing working capital and maintaining positive vendor relationships.
- Murphy Oil Corporation needs to evaluate its payment terms with suppliers to balance cash flow needs and maintain good supplier relations.

In conclusion, monitoring activity ratios such as DOH, DSO, and the number of days of payables is crucial for Murphy Oil Corporation to optimize its inventory management, cash flow, and working capital efficiency. By analyzing these metrics, the company can make informed decisions to enhance operational performance and financial stability.

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Long-term

The Fixed Asset Turnover ratio for Murphy Oil Corporation has fluctuated over the past few years, starting at 0.31 in March 2020, decreasing to 0.21 by March 2021, and then showing an unusual spike to 241.00 in June 2021 before stabilizing around 0.40 to 0.50 in the following periods. This ratio measures how efficiently the company utilizes its fixed assets to generate revenue.

On the other hand, the Total Asset Turnover ratio has also varied, starting at 0.25 in March 2020, declining to 0.16 by December 2020, and then steadily increasing to 0.35 by March 2024. This ratio indicates the company's ability to generate sales relative to its total assets.

Overall, while there have been fluctuations in these ratios, Murphy Oil Corporation has shown a general trend of improving asset turnover efficiency over the years, which could suggest better utilization of assets to generate revenue. However, the spike in Fixed Asset Turnover in June 2021 may have been an anomaly or an error in reporting, as it deviates significantly from the usual trend.