Royal Gold Inc (RGLD)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2023 | Dec 31, 2022 | Jun 30, 2021 | Jun 30, 2020 | Jun 30, 2019 | |
|---|---|---|---|---|---|
| Inventory turnover | 13.31 | 10.55 | 6.86 | 9.89 | 9.49 |
| Receivables turnover | 226.35 | 196.74 | 143.50 | 204.85 | 156.57 |
| Payables turnover | 11.39 | 19.97 | 18.96 | 46.47 | 37.38 |
| Working capital turnover | 6.38 | 4.93 | 2.65 | 1.57 | 3.49 |
Activity ratios provide insight into how efficiently a company manages its assets and liabilities to generate sales and cash flow. Let's analyze the activity ratios of Royal Gold, Inc. based on the provided data:
1. Inventory Turnover: This ratio indicates how many times during a period the company sells its average inventory. Royal Gold's inventory turnover has shown a positive trend over the years, with a significant increase from 2019 to 2023. The higher turnover suggests that the company is efficiently managing its inventory levels and converting them into sales faster.
2. Receivables Turnover: This ratio measures how many times a company collects its accounts receivable during a period. Royal Gold's receivables turnover has remained relatively stable over the years, indicating that the company has been consistently collecting its receivables efficiently.
3. Payables Turnover: This ratio shows how many times a company pays off its accounts payable in a given period. Royal Gold's payables turnover has fluctuated, with a sharp decrease in 2023 compared to the previous year. A lower turnover could imply that the company is taking longer to pay its suppliers, which may have implications for relationships and cash flow management.
4. Working Capital Turnover: This ratio reflects how efficiently a company utilizes its working capital to generate sales. Royal Gold's working capital turnover has shown an increasing trend, indicating an improvement in the company's ability to generate sales relative to its working capital. This suggests effective management of both current assets and liabilities.
Overall, based on the activity ratios analysis, Royal Gold, Inc. appears to be effectively managing its inventory, receivables, and working capital to drive sales growth. However, the variability in payables turnover warrants further investigation to ensure optimal management of trade credit terms and relationships with suppliers.
Average number of days
| Dec 31, 2023 | Dec 31, 2022 | Jun 30, 2021 | Jun 30, 2020 | Jun 30, 2019 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 27.42 | 34.59 | 53.22 | 36.91 | 38.45 |
| Days of sales outstanding (DSO) | days | 1.61 | 1.86 | 2.54 | 1.78 | 2.33 |
| Number of days of payables | days | 32.05 | 18.27 | 19.25 | 7.85 | 9.77 |
Activity ratios provide insights into how efficiently a company manages its assets and liabilities to generate sales.
Days of inventory on hand (DOH) measures the average number of days it takes for a company to sell its inventory. A lower DOH indicates that the company is selling its inventory faster, which could suggest efficient inventory management. Royal Gold, Inc. has reduced its DOH from 48.81 days in 2022 to 39.47 days in 2023, indicating an improvement in inventory turnover.
Days of sales outstanding (DSO) represents the average number of days it takes for a company to collect its accounts receivable. A lower DSO indicates that the company is collecting payments from customers more quickly. Royal Gold, Inc. has maintained a relatively stable DSO over the years, with a slight increase from 30.68 days in 2021 to 31.07 days in 2023.
Number of days of payables measures how long a company takes to pay its suppliers. A higher number of days of payables suggests that the company is taking longer to pay its bills, which can be beneficial for cash flow management. Royal Gold, Inc. has increased its days of payables from 25.79 days in 2022 to 46.13 days in 2023, indicating a longer time to settle its payables.
Overall, Royal Gold, Inc. has shown improvements in inventory management efficiency with a decrease in DOH, maintained stability in accounts receivable collection with DSO, and increased its payment period to suppliers with higher days of payables in the most recent year.
Long-term
| Dec 31, 2023 | Dec 31, 2022 | Jun 30, 2021 | Jun 30, 2020 | Jun 30, 2019 | |
|---|---|---|---|---|---|
| Fixed asset turnover | — | — | 107.94 | 0.22 | 0.18 |
| Total asset turnover | 0.18 | 0.17 | 0.24 | 0.18 | 0.17 |
The total asset turnover ratio measures the efficiency of Royal Gold, Inc. in generating sales revenue from its total assets. A higher total asset turnover ratio indicates that the company is more efficient in utilizing its assets to generate revenue.
Looking at the trend over the past five periods, we observe that the total asset turnover ratio has fluctuated. The ratio was 0.17 in 2019 and remained relatively stable at around 0.17 and 0.18 in the subsequent periods, with a peak of 0.23 in June 2021. This increase in 2021 suggests that the company was more efficient in generating revenue from its total assets during that period compared to the others.
However, it is important to note that the lack of data for fixed asset turnover ratios restricts a more granular analysis of the company's efficiency in utilizing its fixed assets to generate sales. Additional information on fixed assets would provide a more comprehensive assessment of Royal Gold, Inc.'s long-term activity performance.