Sturm Ruger & Company Inc (RGR)

Short-term

Turnover ratios

Sturm, Ruger & Co., Inc.'s activity ratios provide insights into the efficiency of the company in managing its inventory, receivables, payables, and working capital.

1. Inventory Turnover:
- Sturm, Ruger & Co., Inc. exhibited a steady decrease in inventory turnover throughout the year in 2023, with the ratio declining from 6.75 in Q1 to 5.14 in Q4.
- The company's inventory turnover ratio indicates that it took approximately 5 to 6 times during the year to sell its average inventory level.
- A declining trend in inventory turnover may suggest that the company is holding excess inventory, which could tie up capital and indicate inefficiencies in inventory management.

2. Receivables Turnover:
- The company's receivables turnover ratio fluctuated throughout the year but generally remained above 9 times, indicating that it collects receivables relatively efficiently.
- Higher receivables turnover ratios suggest that the company efficiently collects cash from credit sales, contributing positively to its liquidity position.

3. Payables Turnover:
- Limited data is available for payables turnover, with only Q4 2022 and Q4 2023 values provided. The Q4 2023 ratio of 36.95 is notably higher than the Q4 2022 ratio of 31.30, suggesting a faster turnover of payables in the latest period.
- A higher payables turnover ratio may indicate that the company is settling its payables more quickly, potentially improving its relationships with suppliers or managing working capital more effectively.

4. Working Capital Turnover:
- Sturm, Ruger & Co., Inc.'s working capital turnover experienced fluctuations throughout the year, with a downward trend from 3.00 in Q1 2023 to 2.61 in Q4 2023.
- The working capital turnover ratio indicates how efficiently the company is using its working capital to generate sales. A higher ratio implies better efficiency in utilizing working capital to generate revenue.

In conclusion, the analysis of Sturm, Ruger & Co., Inc.'s activity ratios suggests areas of strength, such as efficient collection of receivables, alongside areas that may require attention, such as inventory management and working capital utilization. Further analysis and comparison with industry averages would provide a more comprehensive understanding of the company's operational efficiency.

---

Average number of days

Sturm, Ruger & Co., Inc.'s activity ratios exhibit fluctuations over the quarters in 2022 and 2023.

- Days of Inventory on Hand (DOH): This ratio shows the number of days a company holds its inventory before selling it. The DOH increased from 38.24 days in Q1 2022 to 71.02 days in Q4 2023, indicating a significant increase in the holding period of inventory. This rise could imply slower inventory turnover or accumulation of excess inventory, which might tie up working capital and be less efficient.

- Days of Sales Outstanding (DSO): DSO measures the average number of days a company takes to collect revenue after a sale is made. Sturm, Ruger & Co., Inc.'s DSO varied between 31.41 days in Q2 2022 to 41.14 days in Q1 2023. The increase indicates a longer collection period for receivables, which could impact cash flow and liquidity.

- Number of Days of Payables: This metric reflects how long a company takes to pay its suppliers. The data shows that the company extended their payment period from 11.66 days in Q4 2022 to 9.88 days in Q4 2023. However, incomplete data prevents a full comparison across all quarters.

In conclusion, Sturm, Ruger & Co., Inc.'s activity ratios suggest a need for closer monitoring of inventory management, receivables collection, and payables strategy to optimize working capital efficiency and cash flow.

---

Long-term

The fixed asset turnover ratio for Sturm, Ruger & Co., Inc. has been consistently high over the past eight quarters, ranging from 7.60 to 9.13. This indicates that the company is generating significant sales relative to its investment in fixed assets, such as property, plant, and equipment. A higher fixed asset turnover ratio suggests that the company is efficiently utilizing its fixed assets to generate revenue.

On the other hand, the total asset turnover ratio has shown a decreasing trend over the same period, dropping from 1.60 to 1.36. This ratio measures how well the company is utilizing all its assets to generate sales. A declining total asset turnover ratio could indicate that the company's sales are not keeping pace with its total asset base.

Overall, while Sturm, Ruger & Co., Inc. appears to be effectively utilizing its fixed assets to generate sales, there may be opportunities for the company to improve its overall asset utilization efficiency to boost revenue generation. It would be beneficial for the company to assess its operational efficiency and strategic asset allocation to enhance its total asset turnover in the long term.