Phillips 66 (PSX)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Inventory turnover | 33.12 | 36.33 | 46.26 | 30.56 | 15.18 |
| Receivables turnover | — | — | — | — | — |
| Payables turnover | — | — | — | — | — |
| Working capital turnover | 50.71 | 36.08 | 28.18 | 58.80 | 17.06 |
Based on the activity ratios provided for Phillips 66, we can draw several insights:
1. Inventory Turnover: The inventory turnover ratio measures how efficiently a company is managing its inventory. Phillips 66's inventory turnover has shown an increasing trend over the years, from 15.18 in 2020 to 33.12 in 2024. This indicates that the company is selling its inventory at a faster pace, which may help reduce carrying costs and improve cash flow.
2. Receivables Turnover: Unfortunately, data for the receivables turnover ratio is not provided for Phillips 66, which makes it challenging to assess how quickly the company is collecting payments from its customers. It would be beneficial to have this information to gauge the efficiency of the company's credit policies and collection processes.
3. Payables Turnover: Similar to receivables turnover, data for the payables turnover ratio is not available for Phillips 66. This ratio helps in understanding how quickly the company is paying its suppliers, which can indicate the company's liquidity position and negotiating power with vendors.
4. Working Capital Turnover: The working capital turnover ratio assesses how effectively a company is using its working capital to generate revenue. Phillips 66's working capital turnover has been fluctuating over the years, with a significant increase in 2021 followed by some fluctuations. A higher working capital turnover ratio generally indicates efficient utilization of resources.
In conclusion, Phillips 66 has shown positive trends in its inventory turnover and working capital turnover ratios, reflecting improved efficiency in managing inventory and working capital. However, the lack of data on receivables and payables turnover limits the comprehensive analysis of the company's overall liquidity and operating cycle efficiency.
Average number of days
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 11.02 | 10.05 | 7.89 | 11.95 | 24.04 |
| Days of sales outstanding (DSO) | days | — | — | — | — | — |
| Number of days of payables | days | — | — | — | — | — |
The Days of Inventory on Hand (DOH) for Phillips 66 have shown a significant improvement over the years, decreasing from 24.04 days as of December 31, 2020, to 11.95 days by December 31, 2021, and further reducing to 7.89 days by December 31, 2022. The slight increase to 10.05 days by December 31, 2023, and then to 11.02 days by December 31, 2024, indicates that the company may be carrying slightly more inventory in recent years.
In terms of Days of Sales Outstanding (DSO) and Number of Days of Payables, the data provided does not show any values, indicating either these metrics are not applicable for the company or are not disclosed in the information provided. DSO measures how quickly a company collects its outstanding receivables, while the Number of Days of Payables measures how long it takes a company to pay its suppliers. Without this data, it is challenging to make a comprehensive assessment of Phillips 66's efficiency in managing its accounts receivable and accounts payable.
Overall, based on the information available, it appears that Phillips 66 has been effective in managing its inventory levels, but further details on its receivables and payables turnover would provide a more comprehensive analysis of the company's operational efficiency and liquidity management.
See also:
Long-term
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Fixed asset turnover | — | — | 4.70 | 4.75 | 2.57 |
| Total asset turnover | 1.97 | 1.95 | 2.22 | 2.01 | 1.17 |
The fixed asset turnover ratio for Phillips 66 has shown a significant improvement over the years, increasing from 2.57 in 2020 to 4.75 in 2021 and maintaining a high level around 4.7 in the following years. This indicates that the company is generating more revenue for each dollar invested in fixed assets, suggesting efficient utilization of its long-term assets in generating sales.
On the other hand, the total asset turnover ratio has also demonstrated a positive trend, rising from 1.17 in 2020 to 2.01 in 2021 and further increasing to 2.22 in 2022. Although there was a slight decline in 2023 to 1.95, the ratio rebounded to 1.97 in 2024. This indicates that Phillips 66 is effectively utilizing its total assets to generate revenue, showcasing the company's ability to efficiently generate sales relative to its asset base.
In conclusion, both the fixed asset turnover and total asset turnover ratios suggest that Phillips 66 is efficiently managing its long-term assets to generate sales, which is a positive indication of the company's operational effectiveness and asset utilization.