Ryder System Inc (R)

Short-term

Turnover ratios

Starting with the inventory turnover ratio, we observe an increasing trend from Q1 2022 to Q2 2023, indicating that Ryder System, Inc. is managing its inventory more efficiently. This suggests that the company is selling its inventory more quickly, which could lead to lower carrying costs and less risk of obsolescence.

Moving on to the receivables turnover ratio, we see fluctuations over the quarters, but overall the ratio has been relatively stable. A higher turnover ratio indicates that Ryder is collecting its accounts receivable more quickly, which is a positive sign of efficient management of credit sales and collection processes.

In terms of payables turnover, there is some variability in the ratio over the quarters. A higher payables turnover ratio suggests that Ryder is taking longer to pay its suppliers, which may indicate better cash flow management or negotiation power with suppliers.

Lastly, the working capital turnover ratio is not provided in the data, which limits our ability to assess how effectively Ryder is managing its working capital to generate sales. It would be helpful to have this information to get a complete picture of the company's efficiency in utilizing its resources.

Overall, based on the activity ratios analyzed, Ryder System, Inc. appears to be effectively managing its inventory, accounts receivable, and accounts payable, which are key components of working capital management.

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Average number of days

Ryder System, Inc.'s activity ratios provide insights into the efficiency of the company's operating cycle.

1. Days of Inventory on Hand (DOH): This ratio measures how many days, on average, inventory is held before being sold. The trend from Q1 2022 to Q4 2023 shows a slight decrease in DOH, indicating that the company improved its inventory management efficiency over time. The decrease from 3.10 days in Q4 2022 to 2.87 days in Q4 2023 suggests that Ryder System, Inc. is holding less inventory on hand, which could lead to lower storage costs and better cash flow.

2. Days of Sales Outstanding (DSO): DSO reflects the average number of days it takes for the company to collect revenue after a sale is made. The downward trend in DSO from Q1 2022 to Q4 2023 indicates that Ryder System, Inc. has been improving its accounts receivable collection efficiency. The decrease from 56.82 days in Q1 2022 to 53.09 days in Q4 2023 suggests that the company is collecting payments from customers more quickly, which is a positive sign for cash flow management.

3. Number of Days of Payables: This ratio represents the number of days it takes for the company to pay its trade payables. The trend in the number of days of payables from Q1 2022 to Q4 2023 shows fluctuations, with an overall increase in Q4 2023 compared to Q1 2022. The increase from 29.10 days in Q1 2022 to 32.06 days in Q4 2023 indicates that Ryder System, Inc. is taking slightly longer to settle its payables, which could have implications for supplier relationships and cash flow management.

In conclusion, Ryder System, Inc.'s activity ratios suggest improvements in inventory management and accounts receivable collection efficiency, with some fluctuations in payables management. Monitoring and optimizing these activity ratios are essential for enhancing operational efficiency and overall financial performance.

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Long-term

Ryder System, Inc.'s long-term activity ratios, namely fixed asset turnover and total asset turnover, provide insight into the company's efficiency in generating revenue from its long-term assets.

The fixed asset turnover ratio for Q4 2023 stands at 1.17, indicating that the company generated $1.17 in revenue for every dollar invested in fixed assets during the quarter. This ratio has been relatively stable over the past two years, ranging from 1.09 to 1.30, with a slight decrease from Q1 2023 to Q4 2023. While the ratio fluctuated, it remained above 1, suggesting efficient utilization of fixed assets to generate revenue.

The total asset turnover ratio for Q4 2023 is 0.75, indicating that the company generated $0.75 in revenue for every dollar of total assets during the quarter. Similar to the fixed asset turnover ratio, the total asset turnover ratio has shown consistency over the past two years, ranging from 0.72 to 0.83, with an increase from Q1 2023 to Q4 2023. Despite some fluctuations, the company has been effectively utilizing its total assets to generate revenue.

Overall, both the fixed asset turnover and total asset turnover ratios suggest that Ryder System, Inc. has been efficient in utilizing its long-term assets to generate revenue. The company's ability to generate consistent revenue from its long-term assets indicates sound operational efficiency and effective asset management.