NewMarket Corporation (NEU)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Inventory turnover | 4.56 | 4.21 | 4.09 | 4.02 | 3.60 | 3.78 | 4.11 | 3.93 | 3.93 | 3.90 | 3.77 | 3.84 | 3.90 | 4.26 | 4.59 | 4.60 | 4.68 | 4.62 | 4.63 | 4.57 |
| Receivables turnover | 6.15 | 6.30 | 6.24 | 6.05 | 5.99 | 5.48 | 4.92 | 5.17 | 5.91 | 5.50 | 5.45 | 5.35 | 5.92 | 6.08 | 6.85 | 6.31 | 6.45 | 6.37 | 6.24 | 6.31 |
| Payables turnover | 9.01 | 9.85 | 9.86 | 10.72 | 8.32 | 7.84 | 6.79 | 7.08 | 7.96 | 7.46 | 6.66 | 7.30 | 8.24 | 8.41 | 12.79 | 9.57 | 9.59 | 11.08 | 10.56 | 13.36 |
| Working capital turnover | 3.93 | 3.67 | 3.44 | 3.58 | 3.54 | 3.49 | 3.55 | 3.42 | 3.49 | 2.34 | 2.07 | 1.97 | 3.40 | 3.66 | 3.67 | 3.55 | 3.80 | 3.97 | 3.99 | 3.72 |
NewMarket Corp.'s activity ratios provide insights into how efficiently the company is managing its resources.
1. Inventory Turnover: The inventory turnover ratio measures how many times a company sells and replaces its inventory during a period. NewMarket Corp.'s inventory turnover has been steadily increasing over the past eight quarters, indicating that the company was able to sell its inventory more frequently in Q4 2023 compared to previous quarters. This suggests efficient inventory management and possibly strong sales.
2. Receivables Turnover: The receivables turnover ratio assesses how effectively a company collects payments from its customers. NewMarket Corp.'s receivables turnover has fluctuated over the past quarters but remained relatively stable. A higher turnover indicates quicker collection of receivables, which is crucial for maintaining healthy cash flow.
3. Payables Turnover: The payables turnover ratio evaluates how long a company takes to pay its suppliers. NewMarket Corp.'s payables turnover has been relatively high, consistently fluctuating around 7-10 times a year. This could suggest the company is utilizing suppliers' credit effectively to manage its cash flow and payables.
4. Working Capital Turnover: The working capital turnover ratio measures how efficiently a company generates revenue from its working capital. NewMarket Corp.'s working capital turnover has remained relatively stable over the past eight quarters, indicating consistent performance in utilizing its working capital to generate sales.
Overall, NewMarket Corp. has shown reasonable efficiency in managing its inventory, receivables, payables, and working capital based on its activity ratios. These ratios provide important insights for investors and analysts evaluating the company's operational performance and financial health.
Average number of days
| Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 80.01 | 86.76 | 89.26 | 90.82 | 101.36 | 96.53 | 88.77 | 92.85 | 92.87 | 93.53 | 96.80 | 95.07 | 93.55 | 85.60 | 79.48 | 79.30 | 77.92 | 79.04 | 78.91 | 79.81 |
| Days of sales outstanding (DSO) | days | 59.39 | 57.98 | 58.48 | 60.37 | 60.93 | 66.56 | 74.13 | 70.61 | 61.75 | 66.33 | 66.98 | 68.25 | 61.69 | 60.07 | 53.31 | 57.83 | 56.55 | 57.28 | 58.52 | 57.89 |
| Number of days of payables | days | 40.53 | 37.07 | 37.04 | 34.05 | 43.87 | 46.53 | 53.73 | 51.53 | 45.85 | 48.94 | 54.79 | 50.02 | 44.31 | 43.39 | 28.54 | 38.15 | 38.07 | 32.95 | 34.57 | 27.33 |
To analyze NewMarket Corp.'s activity ratios, we will focus on three key metrics: Days of Inventory on Hand (DOH), Days of Sales Outstanding (DSO), and Number of Days of Payables.
1. Days of Inventory on Hand (DOH):
- The trend in DOH indicates how many days, on average, inventory is held before being sold.
- In Q4 2023, the DOH decreased to 86.47 days from 93.62 days in the previous quarter, suggesting an improvement in inventory management efficiency.
- Comparing Q4 2023 with Q4 2022, there has been a notable decrease in DOH from 108.49 days to 86.47 days, indicating better inventory turnover.
2. Days of Sales Outstanding (DSO):
- DSO measures how long it takes for the company to collect revenue after a sale.
- In Q4 2023, the DSO increased slightly to 58.48 days compared to Q3 2023, but it remains lower than the levels seen in Q2 and Q1 2023.
- When comparing Q4 2023 to the same period in 2022, there has been a decrease in DSO from 59.89 days to 58.48 days, indicating quicker collection of receivables.
3. Number of Days of Payables:
- This metric represents the average number of days the company takes to pay its suppliers.
- The number of days of payables has been fluctuating over the quarters, with some improvement seen in Q4 2023 with 43.81 days compared to the earlier quarters.
- Compared to Q4 2022, there has been a decrease in the number of days of payables, indicating the company is managing payments to suppliers more efficiently.
Overall, NewMarket Corp. has shown improvements in inventory management efficiency, quicker collection of receivables, and better management of payables. These trends suggest effective working capital management and potentially improved cash flow generation.
Long-term
| Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Fixed asset turnover | 4.06 | 4.14 | 4.15 | 4.20 | 4.12 | 4.00 | 3.82 | 3.58 | 3.42 | 3.37 | 3.20 | 2.97 | 2.99 | 3.08 | 3.19 | 3.46 | 3.41 | 3.48 | 3.46 | 3.50 |
| Total asset turnover | 1.15 | 1.18 | 1.15 | 1.18 | 1.13 | 1.12 | 1.09 | 1.05 | 0.91 | 0.94 | 0.88 | 0.83 | 1.03 | 1.06 | 1.13 | 1.13 | 1.15 | 1.23 | 1.23 | 1.23 |
NewMarket Corp.'s fixed asset turnover has shown consistent improvement over the past eight quarters, ranging from 3.65 to 4.26. This indicates that the company is generating revenue efficiently from its investment in fixed assets such as equipment and property. The increasing trend suggests that NewMarket Corp. is utilizing its fixed assets more effectively to generate sales.
In contrast, the total asset turnover ratio has fluctuated within a narrower range from 1.07 to 1.20 over the same period. It indicates the firm's ability to generate sales in relation to its total assets, including both fixed and current assets. Despite some variability in the ratio, it remains relatively stable, showing that the company has been consistent in generating revenue relative to its total asset base.
Overall, the firm's performance in terms of asset turnover ratios reflects efficiency in utilizing both fixed and total assets to generate sales. The increasing trend in fixed asset turnover is a positive indicator of the company's ability to optimize its investments in fixed assets, while the stable total asset turnover ratio suggests consistent overall performance in generating revenue relative to its total asset base.