Norfolk Southern Corporation (NSC)

Activity ratios

Short-term

Turnover ratios

	Dec 31, 2024	Sep 30, 2024	Jun 30, 2024	Mar 31, 2024	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
Inventory turnover	16.34	14.02	13.47	15.36	15.36	13.27	15.21	16.05	16.34	14.28	12.60	13.01	15.11	13.57	12.50	12.15	13.29	12.63	12.92	13.68
Receivables turnover	10.75	9.04	9.68	9.42	9.97	9.60	11.01	10.48	10.50	10.15	9.27	10.06	10.75	10.99	10.67	9.89	11.00	10.69	11.90	11.95
Payables turnover	2.66	2.50	2.70	2.75	2.48	2.68	2.92	3.20	3.20	2.65	2.78	2.91	2.44	2.67	2.76	2.81	2.89	2.45	2.62	2.82
Working capital turnover	—	—	—	—	17.89	50.95	—	—	—	—	45.17	—	—	33.28	46.50	172.89	59.01	16.45	23.57	—

Based on the provided data, let's analyze Norfolk Southern Corporation's activity ratios:

1. Inventory Turnover: Norfolk Southern's inventory turnover ratio has been fluctuating over the years, ranging from a low of 12.15 in March 2021 to a high of 16.34 in December 2022. The company appears to manage its inventory efficiently, with the ratio generally staying above 12. A higher ratio indicates that Norfolk Southern is selling its inventory faster.

2. Receivables Turnover: Norfolk Southern's receivables turnover ratio has also shown variability, with values falling between 9.27 and 11.95. A decreasing trend is observed overall, suggesting a potential issue with collecting receivables efficiently. A lower ratio could indicate slower collection of outstanding payments from customers.

3. Payables Turnover: The payables turnover ratio for Norfolk Southern demonstrates a stable trend, staying within a narrow range of 2.45 to 3.20. This suggests that the company is managing its trade payables consistently. A higher turnover ratio implies that Norfolk Southern is paying its trade payables at a faster rate.

4. Working Capital Turnover: The working capital turnover ratio for Norfolk Southern has been erratic, with some periods showing a high turnover rate and others indicating negative or no turnover at all. This inconsistency may reflect fluctuations in the company's short-term liquidity management. A higher ratio signifies efficient utilization of working capital to generate revenue.

In conclusion, Norfolk Southern Corporation's activity ratios reflect varying levels of efficiency in managing inventory, receivables, payables, and working capital turnover. Continuous monitoring and analysis of these ratios will help in evaluating the company's operational effectiveness and financial performance over time.

Average number of days

		Dec 31, 2024	Sep 30, 2024	Jun 30, 2024	Mar 31, 2024	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
Days of inventory on hand (DOH)	days	22.34	26.04	27.09	23.76	23.76	27.50	23.99	22.74	22.34	25.56	28.97	28.06	24.15	26.90	29.20	30.05	27.47	28.91	28.25	26.68
Days of sales outstanding (DSO)	days	33.94	40.36	37.69	38.77	36.61	38.02	33.14	34.82	34.76	35.97	39.36	36.30	33.94	33.22	34.19	36.91	33.20	34.14	30.67	30.54
Number of days of payables	days	137.45	145.93	135.01	132.55	147.44	136.07	124.90	114.12	114.19	137.63	131.12	125.53	149.66	136.89	132.47	130.06	126.31	148.97	139.40	129.25

Norfolk Southern Corporation's activity ratios indicate how efficiently the company manages its inventory, collects its receivables, and pays its payables.

1. Days of Inventory on Hand (DOH): This ratio measures the average number of days it takes for Norfolk Southern to sell its inventory. A lower number of days is generally desirable as it indicates faster turnover. Norfolk Southern's DOH fluctuated over the analyzed period, ranging from a low of 22.34 days to a high of 30.05 days.

2. Days of Sales Outstanding (DSO): DSO calculates the average number of days it takes for Norfolk Southern to collect payment after making a sale. A lower DSO is preferable as it signifies quicker collection of receivables. Norfolk Southern's DSO varied during the period, with values between 33.14 days and 40.36 days.

3. Number of Days of Payables: This ratio reflects the average number of days Norfolk Southern takes to pay its suppliers. A longer period indicates the company is taking more time to pay its payables. Norfolk Southern's payables days showed fluctuations over time, with the range widening from a low of 114.12 days to a high of 149.66 days.

Analyzing these activity ratios together provides insights into Norfolk Southern Corporation's management of its operating cycle. A balanced approach, aiming for lower DOH and DSO while optimizing payables, can enhance cash flow efficiency and overall financial performance. Tracking these ratios over time allows for monitoring trends and assessing operational effectiveness in the context of working capital management.

Long-term

	Dec 31, 2024	Sep 30, 2024	Jun 30, 2024	Mar 31, 2024	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
Fixed asset turnover	0.32	0.33	0.33	0.32	0.34	0.36	0.37	0.38	0.37	0.37	0.35	0.34	0.33	0.33	0.32	0.30	0.30	0.30	0.31	0.34
Total asset turnover	0.26	0.27	0.27	0.27	0.27	0.29	0.31	0.31	0.31	0.30	0.28	0.27	0.27	0.27	0.26	0.25	0.25	0.25	0.26	0.28

Norfolk Southern Corporation's fixed asset turnover ratio has shown a slight improvement over the years, increasing from 0.34 as of March 31, 2020 to 0.32 as of June 30, 2024. This indicates that the company generated $0.32 in revenue for every dollar invested in fixed assets by the end of the second quarter of 2024.

In contrast, the total asset turnover ratio has been relatively stable, hovering around the range of 0.25 to 0.31 during the same period. This suggests that Norfolk Southern Corporation has been able to generate revenue efficiently in relation to its total assets, with a relatively consistent performance over the years.

Overall, while the fixed asset turnover ratio has seen a modest improvement, the total asset turnover ratio has remained relatively steady for Norfolk Southern Corporation.