Owens Corning Inc (OC)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Inventory turnover | 5.58 | 6.02 | 5.54 | 5.99 | 7.64 |
| Receivables turnover | 8.75 | 9.73 | 10.01 | 8.91 | 7.54 |
| Payables turnover | 6.19 | 5.94 | 5.49 | 5.90 | 7.46 |
| Working capital turnover | 10.07 | 6.03 | 6.62 | 5.97 | 5.94 |
Owens Corning Inc's inventory turnover ratio has gradually decreased from 7.64 in 2020 to 5.58 in 2024. This indicates that the company is holding inventory for a longer period before selling it. The receivables turnover ratio has shown an increasing trend, rising from 7.54 in 2020 to 8.75 in 2024, suggesting that Owens Corning is collecting its receivables more quickly over the years.
On the other hand, the payables turnover ratio has fluctuated slightly over the years, decreasing from 7.46 in 2020 to 6.19 in 2024. This may imply that the company is taking slightly longer to pay its suppliers. However, the changes are not significant.
The working capital turnover ratio has exhibited a fluctuating trend, with a notable increase in 2024 to 10.07 compared to the previous years. This indicates that Owens Corning is generating more revenue per dollar of working capital invested, reflecting a potentially more efficient use of its resources in generating sales.
Overall, while the inventory turnover and payables turnover ratios have shown some declines, the significant improvements in receivables turnover and working capital turnover ratios suggest that Owens Corning is managing its working capital effectively and improving its collection processes.
Average number of days
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 65.45 | 60.59 | 65.90 | 60.92 | 47.81 |
| Days of sales outstanding (DSO) | days | 41.71 | 37.53 | 36.47 | 40.98 | 48.41 |
| Number of days of payables | days | 58.97 | 61.50 | 66.44 | 61.88 | 48.92 |
Owens Corning's activity ratios provide insight into the efficiency of the company's operations.
1. Days of Inventory on Hand (DOH):
- Owens Corning's inventory turnover has increased over the years, from 47.81 days in 2020 to 65.45 days in 2024. This suggests that the company is holding onto its inventory for a longer period as time progresses. This could indicate slower sales or possibly overstocking.
2. Days of Sales Outstanding (DSO):
- The days of sales outstanding have fluctuated over the years, with a notable decrease from 48.41 days in 2020 to 36.47 days in 2022, before increasing again to 41.71 days in 2024. This implies that Owens Corning has been collecting its accounts receivable more efficiently in recent years, although a slight increase in 2024 indicates a slight lag in receivables collection.
3. Number of Days of Payables:
- The number of days of payables reflects the time it takes for Owens Corning to pay its suppliers. The trend shows an increase from 48.92 days in 2020 to 58.97 days in 2024. This indicates that the company is taking longer to settle its payables, which could suggest a strategy to improve cash flow or negotiate more favorable payment terms.
Overall, while Owens Corning has shown improvements in its collection of receivables, the increase in inventory holding period and days of payables suggest a potential need for closer management of working capital to optimize the company's operations.
Long-term
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Fixed asset turnover | 2.61 | 2.50 | 2.58 | 2.16 | 1.82 |
| Total asset turnover | 0.77 | 0.85 | 0.89 | 0.84 | 0.73 |
Long-term activity ratios provide insights into how efficiently a company utilizes its assets to generate sales. In the case of Owens Corning Inc, we will analyze two key ratios: Fixed Asset Turnover and Total Asset Turnover.
1. Fixed Asset Turnover:
- The Fixed Asset Turnover ratio measures how effectively the company is using its fixed assets to generate revenue. A higher ratio indicates better utilization of fixed assets.
- Owens Corning Inc's Fixed Asset Turnover has shown a positive trend over the years, increasing from 1.82 in 2020 to 2.61 in 2024.
- This improvement suggests that the company has been able to generate more sales relative to its investment in fixed assets, which is a positive indicator of operational efficiency.
2. Total Asset Turnover:
- The Total Asset Turnover ratio indicates how efficiently the company is using all its assets to generate sales. A higher ratio implies better asset utilization.
- Owens Corning Inc's Total Asset Turnover ratio has fluctuated over the years, with a slight increase from 0.73 in 2020 to 0.77 in 2024.
- While the ratio has not shown significant growth, the company's ability to generate sales relative to its total assets has remained relatively stable over the period.
In conclusion, Owens Corning Inc has demonstrated an improvement in its Fixed Asset Turnover ratio, indicating better efficiency in utilizing its fixed assets to generate revenue. The Total Asset Turnover ratio, although showing some fluctuation, suggests that the company has maintained a consistent level of asset utilization efficiency over the years.