O’Reilly Automotive Inc (ORLY)

Short-term

Turnover ratios

O`Reilly Automotive, Inc.'s activity ratios provide insight into the efficiency of its operations and management of its assets.

1. Inventory turnover:
- O`Reilly Automotive, Inc. shows consistent inventory turnover over the quarters, ranging from 1.60 to 1.68, indicating that the company effectively manages its inventory levels and efficiently sells through its merchandise. The company is able to turn over its inventory approximately 1.6 to 1.7 times during the periods analyzed.

2. Receivables turnover:
- The receivables turnover for O`Reilly Automotive, Inc. varies from 28.08 to 33.47, showing that the company collects its accounts receivable fairly quickly. This suggests that the company has effective credit policies in place and efficiently manages its accounts receivable collection.

3. Payables turnover:
- O`Reilly Automotive, Inc. exhibits a range of payables turnover ratios from 1.20 to 1.30, reflecting the speed at which the company pays its suppliers. A higher turnover ratio indicates that the company is paying its accounts payable more quickly, which can potentially enhance vendor relationships and negotiate better terms.

4. Working capital turnover:
- Unfortunately, the data shows that the working capital turnover is not provided for the periods analyzed. This ratio would typically indicate how effectively the company is using its working capital to generate sales. Without this data, it is difficult to assess the company's efficiency in this particular area.

In summary, O`Reilly Automotive, Inc.'s activity ratios suggest that the company maintains efficient operations in managing its inventory, collecting receivables, and paying its suppliers. However, further analysis of the working capital turnover ratio would provide a more complete picture of the company's overall efficiency in utilizing its resources to generate revenue.

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Average number of days

To analyze O`Reilly Automotive, Inc.'s activity ratios based on the provided data, we will focus on Days of Inventory on Hand (DOH), Days of Sales Outstanding (DSO), and Number of Days of Payables.

1. Days of Inventory on Hand (DOH):
- On average, O`Reilly Automotive held inventory for about 221 days in Q4 2023, which is slightly lower than the previous quarters.
- The decreasing trend in DOH indicates a more efficient management of inventory levels, potentially lowering carrying costs and minimizing the risk of inventory obsolescence.
- However, the current DOH level may still be considered relatively high, suggesting the need for continuous monitoring of inventory management practices to optimize working capital.

2. Days of Sales Outstanding (DSO):
- O`Reilly Automotive collected its accounts receivable in approximately 12 days in Q4 2023, which is relatively consistent with previous quarters.
- The stable DSO implies that the company has been able to efficiently collect payments from customers, resulting in faster conversion of accounts receivable into cash.
- This trend suggests effective credit policies and prompt follow-up on outstanding invoices, enhancing liquidity and potentially improving cash flow management.

3. Number of Days of Payables:
- O`Reilly Automotive took around 288 days to settle its payables in Q4 2023, showing a consistent pattern compared to previous quarters.
- The extended payment period indicates that the company may be effectively utilizing trade credit to manage cash flow and working capital needs.
- However, a high number of days of payables could signal potential strains on supplier relationships if not managed carefully.

Overall, the analysis of O`Reilly Automotive's activity ratios suggests a balanced approach to managing inventory, accounts receivable, and accounts payable. The company appears to be focusing on optimizing working capital efficiency while maintaining healthy relationships with both suppliers and customers. Continuous monitoring of these ratios will be crucial to sustaining operational performance and financial health.

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See also:

O’Reilly Automotive Inc Short-term (Operating) Activity Ratios (Quarterly Data)

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Long-term

O`Reilly Automotive, Inc.'s long-term activity ratios reflect its efficiency in utilizing fixed assets and total assets to generate sales revenue over the quarters.

The fixed asset turnover ratio indicates O`Reilly's ability to generate revenue from its investments in fixed assets. The trend observed in the fixed asset turnover ratios from Q1 2022 to Q4 2023 shows a slight decline from 3.19 to 3.14. However, overall, the company has been consistently efficient in generating sales relative to its fixed assets, with ratios consistently above 3.0. This suggests that O`Reilly is effectively using its fixed assets to drive revenue growth.

The total asset turnover ratio measures the company's ability to generate revenue from its total assets. O`Reilly's total asset turnover ratios have remained relatively stable around the range of 1.14 to 1.15 over the quarters analyzed. This indicates that the company is efficiently utilizing its total assets to generate sales revenue.

Overall, O`Reilly Automotive, Inc. demonstrates sound efficiency in utilizing both fixed assets and total assets to drive its sales revenue, as evidenced by the consistent and relatively high turnover ratios. It suggests effective management of assets to support the company's operations and growth.

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See also:

O’Reilly Automotive Inc Long-term (Investment) Activity Ratios (Quarterly Data)