Murphy USA Inc (MUSA)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Inventory turnover | 8.10 | 8.33 | 8.42 | 7.51 | 9.66 |
| Receivables turnover | 63.94 | 83.23 | 88.71 | 66.73 | 81.17 |
| Payables turnover | 5.31 | 4.85 | 6.27 | 8.03 | 7.83 |
| Working capital turnover | — | — | 187.68 | 119.71 | 68.20 |
Murphy USA Inc's inventory turnover has shown a fluctuating trend over the past five years, with a peak in 2022 at 65.95 and a low in 2020 at 35.19. This ratio indicates the number of times inventory is sold and replaced during the year, reflecting the efficiency of inventory management.
The receivables turnover ratio has also displayed variability, with a high of 88.71 in 2021 and a low of 63.94 in 2023. This ratio measures how efficiently the company collects on its credit sales during the year.
In terms of payables turnover, Murphy USA Inc's performance has been relatively stable, staying in the range of 36.93 to 45.97 over the five-year period. The payables turnover ratio evaluates how efficiently the company pays its suppliers.
The working capital turnover ratio was notably high in 2021 at 187.68, indicating the company generated a considerable amount of revenue relative to its working capital that year. This ratio assesses the efficiency of utilizing working capital to generate sales.
Overall, Murphy USA Inc's activity ratios suggest varying levels of efficiency in managing inventory, receivables, payables, and working capital across the years, reflecting changes in the company's operating performance and liquidity 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 | 45.07 | 43.83 | 43.36 | 48.60 | 37.78 |
| Days of sales outstanding (DSO) | days | 5.71 | 4.39 | 4.11 | 5.47 | 4.50 |
| Number of days of payables | days | 68.72 | 75.22 | 58.22 | 45.45 | 46.61 |
Activity ratios measure the efficiency of a company in managing its assets and liabilities. Let's analyze Murphy USA Inc's activity ratios based on the provided data:
1. Days of Inventory on Hand (DOH):
- The DOH measures how many days, on average, inventory is held before being sold.
- In 2023, Murphy USA Inc held inventory for approximately 6.48 days, which is higher compared to the previous year (5.53 days in 2022).
- The increase in DOH may indicate slower inventory turnover, potentially tying up working capital.
2. Days of Sales Outstanding (DSO):
- The DSO represents the average number of days it takes a company to collect revenue after a sale is made.
- In 2023, Murphy USA Inc took around 5.71 days to collect sales, marking an increase from the previous year (4.39 days in 2022).
- The rise in DSO may suggest a delay in collecting receivables, affecting cash flow and liquidity.
3. Number of Days of Payables:
- This ratio reflects how long a company takes to pay its suppliers.
- Murphy USA Inc had a payables period of 9.88 days in 2023, slightly higher than the prior year (9.50 days in 2022).
- A longer payables period indicates the company is taking more time to settle its obligations, potentially benefiting from additional credit terms.
In conclusion, Murphy USA Inc's activity ratios show fluctuations in inventory management, receivables collection, and payables settlement over the years. Monitoring these ratios can provide insights into the company's operational efficiency and effectiveness in managing working capital.
Long-term
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Fixed asset turnover | 8.76 | 10.04 | 7.75 | 6.04 | 7.77 |
| Total asset turnover | 4.96 | 5.69 | 4.29 | 4.19 | 5.22 |
The fixed asset turnover ratio for Murphy USA Inc has been fluctuating over the past five years, ranging from 7.30 to 9.53, with a notable drop in 2023 to 8.37. This ratio indicates that the company generates $8.37 in sales for every $1 of fixed assets invested.
On the other hand, the total asset turnover ratio has also shown variability, with values ranging from 4.19 to 5.69 over the same period. In 2023, the total asset turnover ratio was 4.96, suggesting that the company generated $4.96 in sales for every $1 of total assets.
Overall, both ratios reflect the company's efficiency in utilizing its assets to generate revenue. The higher fixed asset turnover ratios in the past indicate that Murphy USA Inc has been relatively effective in generating sales from its fixed assets. However, the slight decline in 2023 may warrant further investigation to understand the underlying reasons for this trend. Similarly, the total asset turnover ratio also underscores the company's ability to generate revenue from its total asset base. It is essential for the company to continue monitoring and optimizing its asset utilization to improve overall efficiency and profitability.