ProPetro Holding Corp (PUMP)

Short-term

Turnover ratios

The inventory turnover ratio measures how efficiently a company manages its inventory by indicating how many times during a period the inventory was sold and replaced. ProPetro Holding Corp's inventory turnover ratio has shown a decreasing trend over the years, declining from 270.27 in 2020 to 49.51 in 2024. This suggests a slowdown in inventory management efficiency, with the company taking more time to sell and replace its inventory.

The receivables turnover ratio reflects how quickly a company collects its accounts receivable during a specific period. However, for ProPetro Holding Corp, the receivables turnover data is not available for the years 2020 to 2024. This lack of information makes it difficult to assess the company's effectiveness in collecting payments from customers.

The payables turnover ratio indicates how quickly a company pays its suppliers. In this case, the payable turnover data is not provided for ProPetro Holding Corp for the years 2020 to 2024, precluding an examination of the company's payment practices.

The working capital turnover ratio measures how efficiently a company uses its working capital to generate sales. ProPetro Holding Corp's working capital turnover has shown an overall increasing trend from 12.42 in 2020 to 41.11 in 2023. This indicates that the company has been able to generate more sales relative to its working capital over the years, implying improved efficiency in utilizing its capital resources.

In conclusion, while ProPetro Holding Corp's inventory management efficiency has deteriorated over the years, its working capital turnover has improved, suggesting a mixed performance in activity ratios. Further data on receivables and payables turnover would provide a more comprehensive assessment of the company's overall operational effectiveness.

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Average number of days

ProPetro Holding Corp's activity ratios provide insights into how efficiently the company manages its inventory, accounts receivable, and accounts payable.

1. Days of Inventory on Hand (DOH):
- The DOH indicates the number of days it takes for the company to sell its inventory.
- ProPetro's DOH has shown a slight increase over the years, from 1.35 days in 2020 to 7.37 days in 2024.
- This suggests that the company may be holding onto its inventory for longer periods, which could tie up resources and impact cash flow.

2. Days of Sales Outstanding (DSO):
- Unfortunately, there is no data available for DSO, which measures how quickly the company collects payments from its customers.
- Without this information, it is challenging to assess ProPetro's efficiency in converting sales into cash.

3. Number of Days of Payables:
- Similarly, there is no data provided for the number of days of payables, which indicates how long it takes for ProPetro to pay its suppliers.
- Without this data, it is difficult to evaluate the company's ability to manage its payables effectively and optimize its cash flow.

In conclusion, while the information on Days of Inventory on Hand is available and shows some increase over the years, the lack of data for Days of Sales Outstanding and Number of Days of Payables limits a comprehensive analysis of ProPetro Holding Corp's overall activity ratios and efficiency in managing working capital.

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Long-term

ProPetro Holding Corp's long-term activity ratios, namely the Fixed Asset Turnover and Total Asset Turnover, indicate the efficiency of the company in generating revenues from its assets over multiple years.

1. Fixed Asset Turnover:
- In 2020, the Fixed Asset Turnover ratio was 0.90, implying that the company generated $0.90 in revenue for every dollar invested in fixed assets.
- This ratio improved to 1.08 in 2021 and further to 1.39 in 2022, suggesting that ProPetro is utilizing its fixed assets more efficiently to generate revenue.
- However, the data for 2023 and 2024 is not available, so it's challenging to assess the trend for these years.

2. Total Asset Turnover:
- In 2020, the Total Asset Turnover ratio was 0.75, indicating that the company generated $0.75 in revenue for every dollar of total assets.
- The ratio improved to 0.82 in 2021, 0.96 in 2022, 1.10 in 2023, and further to 1.18 in 2024. This indicates a consistent improvement in the company's ability to generate revenue from its total assets over the years.

Overall, ProPetro Holding Corp has shown improvement in asset turnover ratios, both in fixed asset turnover and total asset turnover, reflecting enhanced efficiency in utilizing assets to generate revenue. This trend suggests positive developments in the company's operations and potential for better financial performance in the long term.