Oshkosh Corporation (OSK)

Short-term

Turnover ratios

Oshkosh Corp's activity ratios provide insights into how efficiently the company manages its inventory, receivables, payables, and working capital.

1. Inventory turnover:
- Oshkosh Corp's inventory turnover has been relatively stable over the past five years, ranging from a low of 3.74 to a high of 5.50.
- A lower inventory turnover indicates that the company holds onto its inventory for a longer period, potentially tying up cash and increasing holding costs.
- Overall, Oshkosh Corp's inventory turnover suggests that the company is managing its inventory efficiently, with a moderate turnover rate compared to industry benchmarks.

2. Receivables turnover:
- Oshkosh Corp's receivables turnover has fluctuated slightly but has remained around 4.5 to 5.5 over the past five years.
- A higher receivables turnover indicates that the company is collecting its receivables more quickly, which can improve cash flow and liquidity.
- Oshkosh Corp's consistent receivables turnover suggests that the company has been effective in managing its accounts receivable and collecting payments from customers in a timely manner.

3. Payables turnover:
- Oshkosh Corp's payables turnover has shown a declining trend over the past five years, from 8.63 in 2019 to 6.57 in 2023.
- A lower payables turnover may indicate that the company is taking longer to pay its suppliers, which could strain supplier relationships or indicate potential liquidity issues.
- Oshkosh Corp's decreasing payables turnover may warrant further investigation into the company's payment policies and relationships with suppliers.

4. Working capital turnover:
- Oshkosh Corp's working capital turnover has varied significantly, with a notable increase in 2023 compared to previous years.
- A higher working capital turnover ratio indicates that the company is generating more revenue relative to its working capital, which can be a positive sign of operational efficiency.
- Oshkosh Corp's improved working capital turnover in 2023 suggests that the company may be utilizing its working capital more effectively to drive revenue growth.

Overall, Oshkosh Corp's activity ratios reflect a mixed performance in managing its inventory, receivables, payables, and working capital. While the company demonstrates efficiency in certain areas, such as inventory and receivables turnover, there may be areas for improvement, particularly in managing payables turnover to maintain strong supplier relationships and enhance liquidity.

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Average number of days

Days of Inventory on Hand (DOH) measures how many days, on average, inventory is held before it is sold. Oshkosh Corp's DOH has been increasing over the past five years, reaching 97.53 days in 2023. This suggests that the company is holding onto inventory for a longer period, which may indicate inefficiencies in inventory management or a slowdown in sales.

Days of Sales Outstanding (DSO) indicates the average number of days it takes for the company to collect payment after a sale is made. Oshkosh Corp's DSO has fluctuated over the years, with a slight increase to 80.51 days in 2023. This implies that the company is taking longer to collect payments from customers, which could impact cash flow and liquidity.

Number of Days of Payables measures how long it takes for Oshkosh Corp to pay its suppliers. The company's days of payables have increased over the years, reaching 55.57 days in 2023. A longer payment period may indicate that the company is taking advantage of extended payment terms, which could benefit cash flow but may strain relationships with suppliers.

Overall, the trend in these activity ratios for Oshkosh Corp indicates a potential issue with inventory management efficiency and cash flow management. It is important for the company to closely monitor these ratios and take corrective actions to improve operational performance and financial health.

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Long-term

The fixed asset turnover ratio measures how efficiently a company is utilizing its fixed assets to generate sales. A higher ratio indicates better asset utilization. Over the past five years, Oshkosh Corp's fixed asset turnover ratio has shown a declining trend, decreasing from 14.61 in 2019 to 9.03 in 2023. This could imply a decrease in the efficiency of utilizing fixed assets to generate sales.

Total asset turnover ratio measures how effectively a company is generating sales from its total assets. A higher total asset turnover ratio suggests that the company is efficiently using its assets to generate revenue. In Oshkosh Corp's case, the total asset turnover ratio has also shown a decreasing trend over the years, declining from 1.51 in 2019 to 1.06 in 2023. This decline suggests that the company may be less effective in generating sales from its total assets in recent years.

Overall, the declining trends in both fixed asset turnover and total asset turnover ratios for Oshkosh Corp indicate potential inefficiencies in asset utilization and revenue generation. Further analysis and investigation may be needed to identify the underlying reasons for these declining ratios and to formulate strategies for improvement.