PACCAR Inc (PCAR)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Inventory turnover | 11.74 | 0.38 | 0.36 | 0.36 | 0.38 | 0.36 | 0.33 | 0.34 | 0.38 | 0.35 | 0.38 | 0.40 | 0.48 | 0.39 | 0.51 | 0.72 | 0.90 | 0.99 | 0.98 | 0.90 |
| Receivables turnover | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — |
| Payables turnover | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — |
| Working capital turnover | 2.42 | 1.56 | 4.51 | 6.76 | 2.62 | 6.84 | 7.75 | 9.16 | 2.81 | 8.58 | 1.88 | 9.67 | 12.02 | 10.89 | 10.56 | 9.99 | 2.59 | 11.82 | 13.09 | 14.12 |
PACCAR Inc's inventory turnover has shown a decreasing trend over the years, from 0.90 in March 2020 to a significant increase to 11.74 by December 2024. This indicates that the company is selling its inventory more efficiently towards the end of the period.
There is no data available for receivables turnover and payables turnover, which limits our ability to analyze the efficiency of PACCAR's accounts receivable and accounts payable management.
The working capital turnover ratio has fluctuated over the years, suggesting varying levels of efficiency in utilizing working capital to generate sales. The ratio peaked at 14.12 in March 2020, indicating that PACCAR generated significant sales relative to its working capital, but then decreased to 2.42 by December 2024, signifying a potential decrease in efficiency in this aspect.
Overall, while the inventory turnover has shown improvement, the lack of data for receivables and payables turnover ratios, coupled with fluctuations in the working capital turnover ratio, indicate the need for closer monitoring of efficiency in managing working capital and operating assets for PACCAR Inc.
Average number of days
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 31.09 | 966.90 | 1,011.14 | 1,005.68 | 970.58 | 1,025.47 | 1,097.06 | 1,084.69 | 961.84 | 1,035.20 | 962.16 | 922.82 | 761.61 | 925.72 | 715.04 | 504.45 | 405.52 | 368.64 | 370.84 | 407.73 |
| Days of sales outstanding (DSO) | days | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — |
| Number of days of payables | days | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — |
Based on the provided data on PACCAR Inc's activity ratios, we can analyze the Days of Inventory on Hand (DOH) metric over the given period.
The DOH measures how many days, on average, inventory is held before being sold. A higher number of days indicates slower inventory turnover and potentially inefficient inventory management.
From March 31, 2020, to December 31, 2024, PACCAR Inc's DOH showed a fluctuating trend. It started at a relatively high level of 407.73 days in March 2020, decreased to 31.09 days by December 31, 2024, with intermittent peaks and valleys in between.
The significant increase in DOH in the latter part of the period, reaching its highest point of 1,097.06 days on June 30, 2023, and then decreasing to 966.90 days by December 31, 2024, suggests potential inventory management challenges or changes in the company's operations or market conditions.
Overall, PACCAR Inc may need to focus on optimizing its inventory turnover to maintain efficient operations, reduce holding costs, and enhance liquidity. Proper inventory management strategies and adjustments may be required to address the fluctuating DOH levels seen during the period under review.
Long-term
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Fixed asset turnover | 8.45 | — | — | — | 9.29 | — | 8.64 | 8.78 | 8.31 | 8.30 | 4.50 | 7.06 | 6.92 | 4.20 | 6.04 | 5.99 | 5.73 | 6.14 | 6.85 | 8.30 |
| Total asset turnover | 0.78 | 0.80 | 0.86 | 0.88 | 0.86 | 0.90 | 0.88 | 0.88 | 0.87 | 0.89 | 0.83 | 0.79 | 0.80 | 0.80 | 0.76 | 0.68 | 0.66 | 0.71 | 0.78 | 0.89 |
Long-term activity ratios provide insights into how efficiently a company is utilizing its assets to generate sales.
1. Fixed Asset Turnover: This ratio measures how effectively a company is generating sales from its fixed assets. PACCAR Inc's fixed asset turnover has shown fluctuations over the years, indicating changes in the company's efficiency in utilizing its fixed assets. The ratio ranged from a high of 9.29 in December 2023 to a low of 4.20 in September 2021. Generally, a higher fixed asset turnover ratio is preferred as it signifies better asset utilization.
2. Total Asset Turnover: This ratio signifies the efficiency of the company in generating sales from all its assets. PACCAR Inc's total asset turnover ratio has also experienced fluctuations in the examined period, ranging from 0.66 in December 2020 to 0.90 in September 2023. A higher total asset turnover ratio indicates that the company is effectively using its assets to generate sales.
Analyzing these long-term activity ratios provides valuable insights into PACCAR Inc's operational efficiency and asset utilization over time, helping stakeholders understand the company's performance in converting assets into revenue.