Par Pacific Holdings Inc (PARR)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Inventory turnover | 6.01 | 6.21 | 5.59 | 7.22 | 7.92 |
| Receivables turnover | 22.26 | 28.73 | 23.80 | 27.36 | 23.29 |
| Payables turnover | 17.83 | 42.72 | 28.57 | 29.01 | 30.03 |
| Working capital turnover | 17.58 | 82.79 | — | — | — |
Based on the provided data for Par Pacific Holdings Inc, we can analyze the activity ratios as follows:
1. Inventory turnover:
- The inventory turnover ratio indicates how efficiently the company manages its inventory levels. The trend shows a slight decrease from 2019 to 2023, indicating that the company took longer to sell its inventory in recent years. However, the ratio remains above 5, suggesting that the company is still efficient in managing its inventory turnover.
2. Receivables turnover:
- The receivables turnover ratio measures how well the company collects its accounts receivable. The trend from 2019 to 2023 shows some fluctuation, but overall, there is a positive trend in collecting receivables more quickly. The ratio has improved significantly from 2019 to 2023, indicating better efficiency in collecting receivables.
3. Payables turnover:
- The payables turnover ratio indicates how quickly the company pays its suppliers. The data shows fluctuations in the ratio from 2019 to 2023, with a significant decrease in 2023. This may indicate a longer payment period to suppliers, which could be a strategic decision to manage cash flow effectively.
4. Working capital turnover:
- The working capital turnover ratio measures how efficiently the company generates revenue relative to its working capital. The data indicates a significant decrease from 2019 to 2020 and a substantial increase in 2022. However, there is no data available for 2021 and 2020. The high ratio in 2022 suggests that the company was efficient in generating revenue relative to its working capital that year.
Overall, the analysis of the activity ratios for Par Pacific Holdings Inc shows both positive and negative trends in managing inventory, collecting receivables, paying suppliers, and generating revenue relative to working capital over the years. It is essential for the company to monitor these ratios closely to ensure efficient operations and financial performance.
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 | 60.70 | 58.80 | 65.32 | 50.57 | 46.10 |
| Days of sales outstanding (DSO) | days | 16.40 | 12.71 | 15.34 | 13.34 | 15.67 |
| Number of days of payables | days | 20.47 | 8.54 | 12.77 | 12.58 | 12.16 |
The Days of Inventory on Hand (DOH) for Par Pacific Holdings Inc have shown an increasing trend over the past five years, indicating that the company is holding onto its inventory for a longer period before it is sold. This could be a sign of inefficient inventory management or potential issues with sales and demand forecasting.
In contrast, the Days of Sales Outstanding (DSO) have fluctuated over the years, with a peak in 2021 followed by a decline in 2022 and a slight increase in 2023. The DSO metric measures how long it takes for the company to collect payments from customers, and the fluctuations may be indicative of changes in the company's credit policies or customer payment behavior.
The Number of Days of Payables has shown significant variation, with a notable increase in 2023 compared to the previous years. A higher number of days of payables suggests that the company is taking longer to pay its suppliers, which can sometimes indicate cash flow challenges or a deliberate strategy to improve working capital management.
Overall, the activity ratios suggest that Par Pacific Holdings Inc may need to focus on improving inventory turnover, tightening credit terms to reduce DSO, and managing payables effectively to optimize its working capital and overall liquidity position.
Long-term
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Fixed asset turnover | 7.61 | 8.90 | 5.57 | 3.30 | 5.54 |
| Total asset turnover | 2.12 | 2.21 | 1.81 | 1.43 | 1.97 |
The fixed asset turnover ratio measures how efficiently a company is utilizing its fixed assets to generate revenue. Higher fixed asset turnover ratios indicate better utilization of fixed assets. In the case of Par Pacific Holdings Inc, the fixed asset turnover ratio has fluctuated over the past five years, with a noticeable decrease from 8.76 in 2022 to 7.49 in 2023. This suggests a slight decline in the efficiency of using fixed assets to generate sales.
On the other hand, the total asset turnover ratio reflects the company's ability to generate sales from its total assets. A higher total asset turnover ratio indicates that the company is efficient in generating revenue from its total asset base. Par Pacific Holdings Inc's total asset turnover ratio has also varied in the past five years, with a peak of 2.23 in 2022 and a dip to 2.13 in 2023. This decrease suggests a slight decline in the company's overall efficiency in utilizing its total assets to generate sales.
Overall, while the company's fixed asset turnover ratio has shown some fluctuations, indicating changes in the efficiency of using fixed assets, the total asset turnover ratio has also varied, pointing to fluctuations in the efficiency of generating sales from the total asset base. Further analysis would be necessary to understand the factors contributing to these changes in the long-term activity ratios of Par Pacific Holdings Inc.