RB Global Inc. (RBA)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Inventory turnover | 5.87 | 6.10 | 5.25 | 5.11 | 6.09 |
| Receivables turnover | 4.96 | 9.17 | 8.30 | 9.71 | 9.14 |
| Payables turnover | 6.56 | 6.70 | 5.46 | 5.23 | 4.97 |
| Working capital turnover | 7.81 | 10.33 | 8.15 | 32.64 | 7.39 |
RB Global Inc.'s activity ratios show fluctuations over the past five years. Inventory turnover decreased slightly from 6.09 in 2019 to 5.87 in 2023, indicating that inventory is being sold at a slightly slower rate. Receivables turnover also decreased from 9.14 in 2019 to 4.96 in 2023, suggesting that the company is collecting its receivables at a slower pace.
On the other hand, payables turnover increased steadily from 4.97 in 2019 to 6.56 in 2023, indicating that the company is paying its suppliers at a quicker pace. This could potentially improve cash flow management.
The working capital turnover ratio shows significant fluctuations, with a sharp decrease in 2020 and a subsequent increase in 2021 and 2022. A working capital turnover of 7.81 in 2023 suggests that the company is generating $7.81 in revenue for every dollar of working capital investment.
Overall, RB Global Inc. should focus on managing its inventory and receivables more efficiently to improve its activity ratios and boost its overall financial performance.
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 | 62.13 | 59.82 | 69.47 | 71.49 | 59.92 |
| Days of sales outstanding (DSO) | days | 73.55 | 39.80 | 43.99 | 37.58 | 39.92 |
| Number of days of payables | days | 55.60 | 54.45 | 66.86 | 69.83 | 73.41 |
The activity ratios of RB Global Inc. provide insights into how efficiently the company manages its assets and operations.
1. Days of Inventory on Hand (DOH):
- RB Global Inc. has demonstrated a fluctuating trend in its days of inventory on hand over the past five years, ranging from 59.82 days to 71.49 days. This ratio measures how long, on average, inventory is held before being sold.
- In 2023, the company has increased its DOH to 62.13 days, indicating that it is holding onto inventory for a slightly longer period compared to the previous year.
- A higher DOH can suggest overstocking or slow-moving inventory, potentially tying up working capital and leading to increased storage costs.
2. Days of Sales Outstanding (DSO):
- The days of sales outstanding ratio for RB Global Inc. has also shown variability over the years, with values fluctuating between 37.58 days and 73.55 days. This ratio measures the average number of days it takes to collect revenue after a sale is made.
- A significant increase in DSO in 2023 to 73.55 days indicates that the company is taking longer to collect payments from customers compared to the previous year.
- A higher DSO may signal issues with credit policies, collection processes, or potential liquidity constraints.
3. Number of Days of Payables:
- RB Global Inc. has seen fluctuations in the number of days of payables over the past five years, varying between 54.45 days and 73.41 days. This ratio evaluates how long, on average, the company takes to pay its suppliers.
- In 2023, the company has reduced its days of payables to 55.60 days, suggesting that it is paying suppliers slightly faster compared to the previous year.
- A lower number of days of payables can indicate strong supplier relationships or potentially taking advantage of discounts for early payment.
Overall, while RB Global Inc. has exhibited fluctuations in its activity ratios, monitoring these metrics can help the company assess and improve its working capital management, inventory control, and accounts receivable and payable processes to enhance operational efficiency and financial performance.
Long-term
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Fixed asset turnover | 3.06 | 3.78 | 3.16 | 2.80 | 2.72 |
| Total asset turnover | 0.31 | 0.61 | 0.39 | 0.59 | 0.59 |
RB Global Inc.'s long-term activity ratios indicate the company's efficiency in utilizing its fixed assets and total assets to generate revenue over the past five years.
From 2019 to 2023, there was a fluctuating trend in fixed asset turnover, ranging from 2.72 to 3.78. The decreasing trend from 3.78 in 2022 to 3.06 in 2023 suggests that the company may have become less efficient in generating sales from its fixed assets during the latest year. However, RB Global Inc. still managed to maintain a relatively high level of fixed asset turnover, indicating that the company continues to effectively utilize its fixed assets to generate revenue.
In contrast, the total asset turnover ratio shows a different pattern, with values ranging from 0.31 to 0.61. This ratio indicates the company's overall ability to generate revenue from its total assets. The substantial increase in total asset turnover from 0.39 in 2021 to 0.61 in 2022 may suggest that RB Global Inc. improved its efficiency in generating sales from its total assets during these years. However, the drop to 0.31 in 2023 may indicate a decrease in efficiency in utilizing total assets to generate revenue during that year.
Overall, while RB Global Inc. has shown fluctuations in its long-term activity ratios over the past five years, the company has generally maintained a strong performance in efficiently utilizing its assets to generate revenue. The management may need to focus on sustaining or improving these ratios to ensure long-term financial stability and growth.