O’Reilly Automotive Inc (ORLY)

Activity ratios

Short-term

Turnover ratios

	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Inventory turnover	2.71	2.63	2.83	2.52	2.38
Receivables turnover	30.29	30.27	34.12	34.54	33.88
Payables turnover	2.07	1.95	2.22	2.20	2.28
Working capital turnover	—	—	—	—	—

Inventory Turnover:
O`Reilly Automotive's inventory turnover has shown a slight increasing trend over the five-year period, indicating that the company is managing its inventory more efficiently. The ratio in 2023 stands at 1.65, meaning that the company sells and replaces its inventory approximately 1.65 times a year.

Receivables Turnover:
The receivables turnover ratio for O`Reilly Automotive has been relatively stable over the past five years, with the latest ratio at 30.67. This indicates that the company collects its accounts receivable approximately 30.67 times in a given year. A high receivables turnover ratio suggests that the company is efficient in collecting payments from its customers.

Payables Turnover:
O`Reilly Automotive's payables turnover has fluctuated slightly over the period but has remained relatively consistent. The payables turnover ratio in 2023 is 1.27, indicating that the company pays its accounts payable approximately 1.27 times a year. A higher payables turnover ratio may suggest that the company is efficiently managing its payables.

Working Capital Turnover:
Unfortunately, the data for working capital turnover is not provided for O`Reilly Automotive in the table. This ratio is used to assess how effectively the company is utilizing its working capital to generate sales. Without this information, we are unable to comment on the company's efficiency in utilizing its working capital to generate revenue.

In conclusion, O`Reilly Automotive appears to be managing its inventory and receivables efficiently based on the inventory turnover and receivables turnover ratios. The stability in payables turnover also reflects sound management of accounts payable. However, without the working capital turnover ratio, a complete assessment of the company's efficiency in utilizing its working capital remains incomplete.

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	134.61	138.74	129.03	145.03	153.17
Days of sales outstanding (DSO)	days	12.05	12.06	10.70	10.57	10.77
Number of days of payables	days	176.03	187.19	164.35	166.13	159.85

O`Reilly Automotive, Inc.'s activity ratios provide insights into how efficiently the company manages its inventory, collects its receivables, and pays its payables.

1. Days of Inventory on Hand (DOH):
- The trend in DOH shows a fluctuating pattern over the years, ranging from 220.61 days in 2023 to 265.12 days in 2019.
- A decrease in DOH from 2020 to 2021 indicates an improvement in inventory management efficiency.
- Overall, the company appears to be effectively managing its inventory levels, with a lower number of days indicating a faster turnover of inventory.

2. Days of Sales Outstanding (DSO):
- The DSO metric has remained relatively stable over the years, with a range of 10.39 days in 2020 to 11.91 days in 2022.
- This implies that O`Reilly Automotive collects its receivables within a short period after making sales, showcasing effective credit management practices.
- Consistent DSO figures suggest a strong customer credit policy and efficient collection procedures in place.

3. Number of Days of Payables:
- The days of payables trend exhibit slight fluctuations, with 288.48 days in 2023 and 276.69 days in 2019.
- A longer number of days of payables indicates that the company takes longer to pay its suppliers, potentially benefiting from extended credit terms.
- However, a significant increase in days of payables from 2022 to 2023 may raise concerns about the company's relationships with suppliers or cash flow management.

In conclusion, O`Reilly Automotive, Inc. showcases efficient management of inventory turnover and receivables collection but should monitor the trend in payables days to ensure healthy supplier relationships and cash flow sustainability.

Long-term

	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Fixed asset turnover	3.10	3.22	3.13	2.79	2.53
Total asset turnover	1.13	1.13	1.12	0.99	0.93

O`Reilly Automotive, Inc.'s long-term activity ratios reflect the efficiency of the company in generating sales relative to its fixed assets and total assets over the last five years.

Fixed asset turnover has been relatively stable over the period, with values ranging from 2.57 to 3.26. This ratio indicates that, on average, the company generates between $2.57 to $3.26 in sales for every dollar invested in fixed assets. The increasing trend in fixed asset turnover from 2019 to 2022 suggests that the company has been able to utilize its fixed assets more efficiently to drive revenue.

Total asset turnover has also remained stable at around 1.00 to 1.14 over the same period, indicating that the company generates between $1.00 to $1.14 in sales for every dollar of total assets. The consistent total asset turnover suggests that the company has effectively managed its total assets to generate sales.

Overall, both fixed asset turnover and total asset turnover ratios for O`Reilly Automotive, Inc. demonstrate that the company has been efficient in utilizing its assets to drive revenue, with a slight improvement in fixed asset turnover indicating increased efficiency in the use of fixed assets over the years.