ProPetro Holding Corp (PUMP)

Short-term

Turnover ratios

ProPetro Holding Corp's Inventory turnover ratio fluctuated significantly over the past few years, indicating varying efficiency in managing its inventory. The ratio decreased from extremely high levels in early 2020 to lower values by the end of 2024, suggesting potential issues with inventory management or changes in sales patterns.

The Receivables turnover ratio was not available for any period, likely due to limited data or the nature of the company's business operations. As a result, it's challenging to assess the efficiency of ProPetro Holding Corp in collecting its receivables from customers.

Similarly, the Payables turnover ratio was also not provided, making it difficult to evaluate how quickly the company pays its suppliers or manages its accounts payable.

In terms of the Working capital turnover ratio, ProPetro Holding Corp's performance varied over the years, with a general increasing trend from early 2020 to late 2023, signifying a more efficient utilization of working capital. However, this ratio declined in the latter part of 2024, indicating a potential slowdown in the company's ability to generate sales relative to its working capital.

Overall, ProPetro Holding Corp should continue monitoring and managing its activity ratios closely to enhance operational efficiency and optimize working capital utilization.

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Average number of days

Based on the provided data, we will analyze ProPetro Holding Corp's activity ratios:

1. Days of Inventory on Hand (DOH):
The DOH ratio measures the number of days a company holds inventory before it is sold. ProPetro Holding Corp's DOH has seen fluctuations over the periods, ranging from as low as 0.58 days to as high as 5.88 days. A lower DOH indicates efficient inventory management and swift turnover, while a higher DOH suggests slower inventory turnover, potentially tying up capital.

2. Days of Sales Outstanding (DSO):
Unfortunately, the data provided does not include information on DSO. DSO measures the average number of days it takes for a company to collect revenue after a sale is made. A lower DSO typically indicates effective credit management and timely collections, while a higher DSO may signal liquidity challenges or inefficiencies in the collection process.

3. Number of Days of Payables:
Similar to DSO, the data does not include details on the number of days of payables. This ratio typically measures the average number of days a company takes to pay its suppliers. A longer payables period can indicate favorable payment terms or cash flow management, while excessively long payables may strain supplier relationships or suggest financial difficulties.

Overall, the analysis of ProPetro Holding Corp's limited activity ratios suggests varying levels of efficiency in managing inventory, collecting payments, and paying suppliers over the periods provided. Further analysis incorporating additional financial metrics would be needed to gain a more comprehensive understanding of the company's operational performance and financial health.

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Long-term

ProPetro Holding Corp's fixed asset turnover ratio has fluctuated over the years, showing a gradual declining trend from 1.90 in March 2020 to 1.20 in March 2022. However, the ratio started to pick up again, reaching 1.56 by September 2023. This ratio indicates the company's ability to generate revenue from its investment in fixed assets such as property, plant, and equipment.

In comparison, the total asset turnover ratio reflects a similar pattern as the fixed asset turnover, with a higher starting point of 1.35 in March 2020. The ratio declined up to December 2020 but began to improve from March 2021 onwards. By December 2024, the total asset turnover ratio stood at 1.18, showing an increase in efficiency in generating sales from all assets.

Overall, the company's performance in utilizing fixed assets and total assets to generate revenue has shown a mix of fluctuations and improvements over the years, indicating a changing operational efficiency and productivity levels. Monitoring these ratios over time can provide insights into the company's asset management strategies and operational effectiveness.