Mueller Water Products (MWA)

Short-term

Turnover ratios

The activity ratios of Mueller Water Products over the analyzed period exhibit several notable trends and behaviors across inventory turnover, receivables turnover, payables turnover, and working capital turnover.

Inventory Turnover:
The inventory turnover ratio demonstrates a declining trend from its peak of approximately 4.07 times in September 2021 to around 2.71 times in late 2024 and early 2025. Initially, the ratio increased from 3.56 in June 2020, reaching a high point around late 2021, which indicates an improvement in inventory management and faster inventory turnover during that period. Subsequent declines suggest a slowdown in inventory circulation, possibly reflecting increased inventory levels, slower sales, or strategic inventory buildup.

Receivables Turnover:
Receivables turnover exhibits relative stability with periods of improvement, notably reaching a peak of 9.00 times at the end of 2024. Early in the period, the ratio fluctuated around 5.3 to 5.84, indicating moderate collection efficiency. The upward trend toward late 2024 and early 2025 suggests enhanced collection processes and improved receivables management, reducing the days sales outstanding, thus potentially improving cash flow.

Payables Turnover:
The payables turnover ratio varies within a range of approximately 7.19 to 11.25 times throughout the period. Early increases, such as in December 2020 (11.25) and subsequent fluctuations, reflect changes in payment policies or supplier terms. Periods of lower turnover, notably around March and December 2023, suggest extended payment periods, possibly due to negotiating better terms or managing liquidity. The ratio generally remains within a moderate range, indicating a balanced approach to settling payables.

Working Capital Turnover:
This ratio indicates how effectively the company utilizes its working capital to generate sales. The ratio ranges from about 2.10 to 2.84 times, with a gradual decline observed toward the end of the period. The decrease from approximately 2.84 in September 2022 to around 2.10 in early 2025 signals a potential reduction in the efficiency of working capital utilization, which could be due to increased working capital levels or less aggressive sales generation relative to working capital.

Overall Analysis:
The activity ratios reveal a pattern of initial efficiency in inventory management and receivables collection improving over time, especially toward late 2024. However, the declining inventory turnover indicates a buildup of inventory or slower sales, which could impede overall operational efficiency if not addressed. The stable but variable payables turnover reflects active management of payment terms, while the decreasing working capital turnover suggests a need to optimize asset utilization further. Collectively, these ratios suggest that Mueller Water Products has experienced periods of operational efficiency with recent signs of momentum in receivables management, but also ongoing challenges in inventory management and working capital utilization that warrant strategic attention.

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Average number of days

The activity ratios for Mueller Water Products, as measured by days of inventory on hand (DOH), days of sales outstanding (DSO), and days of payables, exhibit notable trends over the specified periods.

Days of Inventory on Hand (DOH):
From June 30, 2020, to March 31, 2021, DOH decreased from approximately 102.41 days to 93.19 days, indicating an improvement in inventory management efficiency during this period. However, starting in June 2021, there was a gradual increase, reaching approximately 124.58 days by December 31, 2022. This upward trend continued into 2023, with DOH peaking around 134.51 days on December 31, 2023, suggesting that inventory levels have become less liquid or that inventory turnover has slowed considerably. The figure slightly declined in the subsequent quarters but remained elevated at approximately 126.71 days as of March 31, 2025, indicating ongoing challenges in managing inventory efficiently.

Days of Sales Outstanding (DSO):
DSO initially fluctuated within a range of approximately 62.53 to 68.45 days from June 2020 through September 2021, with a slight decrease in the latter months, reflecting stable or marginally improving receivables collection. Notably, DSO decreased more significantly from December 2022 onward, reaching a low of approximately 40.56 days on December 31, 2024. This decline suggests enhanced collections efficiency or shorter customer payment cycles. However, by March 2025, DSO increased again to about 58.89 days, indicating some variability but generally improved receivables management relative to earlier periods.

Number of Days of Payables:
The payable days ranged from approximately 32.44 days in December 2020 to about 50.76 days in September 2022. The data depict a pattern where the Days of Payables increased during the second half of 2021 and into 2022, possibly indicating extended credit terms or delays in payments to suppliers. Subsequently, payable days decreased to levels below 40 days by June 2024, with some fluctuations, suggesting a tendency to shorten payment cycles or improve payment timings. As of March 2025, payable days rose again to nearly 48 days, reflecting some variability or shifts in payable management.

Summary:
Overall, Mueller Water Products experienced a significant increase in inventory holdings over time, which may imply either strategic inventory build-up or challenges in inventory turnover efficiency. Receivables collection efforts appeared to improve notably toward the end of 2022 and into 2024, reducing DSO substantially before a slight reversal. The company’s approach to payables fluctuated, with some periods of extended credit and others of shorter payout cycles, possibly reflecting changes in supplier negotiations or cash management strategies. These activity ratios collectively suggest shifts in operational efficiency, liquidity management, and working capital strategies over the analyzed periods.

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Long-term

Mueller Water Products exhibits notable activity in its long-term asset utilization ratios over the observed period. The Fixed Asset Turnover ratio demonstrates a general upward trend from approximately 3.78 at the end of 2020 to a peak of 4.30 in the first quarter of 2023 before experiencing a decline back to 3.80 in September 2023. This ratio indicates an increasing efficiency in utilizing fixed assets—such as property, plant, and equipment—relative to sales, suggesting improving asset productivity during this period. The higher ratios reflect that the company has been generating more sales per dollar invested in fixed assets, which is a positive indicator of operational efficiency.

Similarly, the Total Asset Turnover ratio shows a consistent upward progression from around 0.69 at the end of September 2020 to a peak of 0.89 in the first quarter of 2023. This indicates an improved utilization of the company's total assets to generate sales over this timeframe. The ratio remains relatively stable near the high levels from late 2022 onward, fluctuating slightly around 0.80 to 0.84, suggesting a stabilization in how efficiently the company is deploying its total asset base to produce revenue.

In summary, both ratios reveal a period of increasing efficiency in asset utilization from late 2020 through early 2023, with the Fixed Asset Turnover ratio reaching its maximum around that time. Thereafter, the ratios indicate a slight decline or stabilization, which may reflect changes in asset utilization efficiency, investment in growth initiatives, or operational adjustments. Overall, Mueller Water Products has demonstrated an ability to enhance long-term asset productivity over the analyzed period, with signs of stabilization in recent quarters.