ProPetro Holding Corp (PUMP)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Inventory turnover | 80.73 | 234.43 | 222.68 | 316.50 | 105.49 |
| Receivables turnover | 6.86 | 5.92 | 6.84 | 9.34 | 9.64 |
| Payables turnover | 8.85 | 5.04 | 5.76 | 10.91 | 1.33 |
| Working capital turnover | 40.98 | 28.65 | 11.35 | 12.38 | 14.34 |
ProPetro Holding Corp's activity ratios provide insights into the efficiency with which the company manages its assets and liabilities.
1. Inventory turnover: ProPetro's inventory turnover has shown significant fluctuations over the past five years, ranging from a high of 316.50 in 2020 to a low of 80.73 in 2023. A high inventory turnover ratio indicates that the company is effectively managing its inventory levels and selling products quickly. However, the sharp decrease in inventory turnover from 2020 to 2023 may indicate potential issues with inventory management or sales performance.
2. Receivables turnover: The receivables turnover ratio measures how quickly the company collects payments from its customers. ProPetro's receivables turnover has also varied over the years, with a peak of 9.64 in 2019 and a low of 5.92 in 2022. A higher receivables turnover ratio signifies better efficiency in collecting payments, indicating that ProPetro has been effective in managing its accounts receivable to generate cash flow.
3. Payables turnover: The payables turnover ratio reflects how quickly the company pays its suppliers and creditors. ProPetro's payables turnover has been inconsistent, with a peak of 10.91 in 2020 and a low of 1.33 in 2019. A higher payables turnover ratio indicates that the company is managing its payables efficiently by paying suppliers promptly. The fluctuations in this ratio suggest variations in the company's payment practices over the years.
4. Working capital turnover: The working capital turnover ratio measures how efficiently the company is utilizing its working capital to support its operations. ProPetro's working capital turnover has shown an increasing trend over the years, with a notable improvement from 2019 to 2023. A higher working capital turnover ratio signifies that the company is generating more revenue for each dollar of working capital invested, indicating improved operational efficiency and financial performance.
In conclusion, while ProPetro Holding Corp's activity ratios exhibit fluctuations, the company has demonstrated varying levels of efficiency in managing its inventory, receivables, payables, and working capital over the past five years. Continued monitoring and analysis of these ratios are essential for assessing the company's operational effectiveness and financial health.
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 | 4.52 | 1.56 | 1.64 | 1.15 | 3.46 |
| Days of sales outstanding (DSO) | days | 53.23 | 61.66 | 53.34 | 39.08 | 37.87 |
| Number of days of payables | days | 41.23 | 72.47 | 63.36 | 33.45 | 274.26 |
ProPetro Holding Corp's activity ratios provide insights into the efficiency of its operations and management of working capital.
Days of Inventory on Hand (DOH):
ProPetro's DOH has fluctuated over the past five years, indicating varying levels of inventory management efficiency. In 2023, the company held inventory for an average of 4.52 days before selling it, which is higher compared to the previous years. This suggests a potential increase in excess inventory or a slowdown in inventory turnover.
Days of Sales Outstanding (DSO):
The DSO metric reflects ProPetro's ability to collect on its credit sales. The company took an average of 53.23 days in 2023 to collect its accounts receivable, which marks a decrease compared to the previous year. This improvement suggests that ProPetro might be experiencing more efficient credit collection practices.
Number of Days of Payables:
ProPetro's days of payables provide insight into the company's payment terms with suppliers. The trend shows that ProPetro has been extending its payment period over the years. In 2023, the company took an average of 41.23 days to pay its suppliers, indicating a decrease from the prior year. This trend may suggest improved cash management or negotiation of better payment terms.
In conclusion, ProPetro Holding Corp's activity ratios reflect a mixed performance in managing its inventory, accounts receivable, and accounts payable. The company should continue monitoring and improving these ratios to enhance operational efficiency and optimize working capital management.
Long-term
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Fixed asset turnover | 1.68 | 1.39 | 1.08 | 0.89 | 1.95 |
| Total asset turnover | 1.10 | 0.96 | 0.83 | 0.75 | 1.42 |
The fixed asset turnover ratio for ProPetro Holding Corp has shown an upward trend from 2019 to 2023, indicating that the company has been able to generate more revenue from its fixed assets over time. This suggests improved efficiency in utilizing its property, plant, and equipment to generate sales.
On the other hand, the total asset turnover ratio has also been increasing over the same period, although not as steadily as the fixed asset turnover ratio. This indicates that the company has been more effective in generating sales from all its assets as a whole.
Overall, the increasing trend in both ratios implies that ProPetro Holding Corp has been improving its efficiency in utilizing its assets to generate sales, which is a positive sign for the company's long-term operational performance and potential for profitability.