Sturm Ruger & Company Inc (RGR)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Inventory turnover | 5.51 | 5.14 | 6.40 | 10.29 | 12.98 |
| Receivables turnover | 7.98 | 9.08 | 9.10 | 12.81 | 9.83 |
| Payables turnover | 31.98 | 36.95 | 31.30 | 36.95 | 29.50 |
| Working capital turnover | 2.71 | 2.61 | 3.00 | 2.90 | 3.73 |
Sturm Ruger & Company Inc's inventory turnover decreased from 12.98 in 2020 to 5.51 in 2024. This indicates that the company is taking longer to sell its inventory over the years, which could potentially tie up more capital in unsold inventory.
On the other hand, the receivables turnover ratio fluctuated over the years, ranging from 7.98 in 2024 to 12.81 in 2021. This ratio measures how efficiently the company collects payments from customers. The decrease over time may suggest a slower collection of accounts receivable, which could impact the company's cash flow.
The payables turnover ratio shows how quickly the company is paying its suppliers. Sturm Ruger & Company Inc's payables turnover ratio ranged from 29.50 in 2020 to 31.98 in 2024. A higher ratio indicates that the company is efficiently managing its payables, possibly taking advantage of favorable credit terms.
Lastly, the working capital turnover ratio decreased over the years, from 3.73 in 2020 to 2.71 in 2024. This ratio measures how effectively the company generates revenue from its working capital. The decreasing trend may imply that the company is becoming less efficient in utilizing its working capital to drive sales.
Overall, the trends in these activity ratios for Sturm Ruger & Company Inc suggest changes in its operational efficiency and cash flow management over the years, which could impact its financial performance.
Average number of days
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 66.28 | 71.02 | 57.06 | 35.47 | 28.12 |
| Days of sales outstanding (DSO) | days | 45.75 | 40.18 | 40.09 | 28.49 | 37.13 |
| Number of days of payables | days | 11.41 | 9.88 | 11.66 | 9.88 | 12.37 |
To analyze Sturm Ruger & Company Inc's activity ratios, we will focus on three key ratios:
1. Days of Inventory on Hand (DOH):
- In 2020, Sturm Ruger held inventory for an average of 28.12 days, indicating the company's ability to efficiently manage its inventory levels.
- The DOH increased in subsequent years, reaching 66.28 days by the end of 2024. This upward trend suggests a potential increase in inventory carrying costs or inefficiencies in managing inventory turnover.
2. Days of Sales Outstanding (DSO):
- Sturm Ruger collected receivables in an average of 37.13 days in 2020, reflecting the company's effectiveness in converting sales to cash.
- The DSO improved over the years, reaching a low of 28.49 days in 2021 before increasing to 45.75 days by the end of 2024. This increase may indicate a slower collection of accounts receivable, potentially impacting cash flow.
3. Number of Days of Payables:
- Sturm Ruger took an average of 12.37 days to pay its suppliers in 2020, indicating good payment terms or strategic management of payables.
- The number of days of payables fluctuated over the years but generally remained relatively stable, ranging from 9.88 days to 11.66 days. This consistency suggests a maintained relationship with suppliers.
Overall, while Sturm Ruger's ability to manage inventory and payables was relatively stable, the company experienced fluctuations in its inventory turnover and accounts receivable collection efficiency over the years, which could impact its liquidity and operational effectiveness.
Long-term
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Fixed asset turnover | 7.52 | 7.60 | 7.75 | 9.92 | 8.04 |
| Total asset turnover | 1.39 | 1.36 | 1.23 | 1.65 | 1.63 |
Sturm Ruger & Company Inc's fixed asset turnover indicates that the company generated $9.92 in revenue for every dollar invested in fixed assets at the end of 2021, showcasing efficiency in utilizing its fixed assets to generate sales. However, there was a slight decline in this ratio in the following years, with values dropping to 7.75, 7.60, and 7.52 by the end of 2022, 2023, and 2024 respectively. Despite the decrease, the company is still effectively generating revenue from its fixed assets.
Regarding total asset turnover, the company had a consistent performance from 2020 to 2023, maintaining values around 1.63 to 1.36, reflecting that for every dollar of total assets, the company generated revenue within this range. In 2024, the total asset turnover slightly increased to 1.39, indicating improvement in the utilization of the company's total assets to generate revenue. Overall, the fixed asset turnover shows the effectiveness of utilizing fixed assets, while the total asset turnover reveals the overall efficiency in generating revenue across all assets.