Gibraltar Industries Inc (ROCK)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Inventory turnover | 8.43 | 6.29 | 5.96 | 7.90 | 10.95 |
| Receivables turnover | 6.14 | 6.40 | 5.67 | 5.22 | 6.09 |
| Payables turnover | 11.03 | 10.05 | 6.09 | 5.76 | 9.34 |
| Working capital turnover | 5.82 | 6.66 | 8.37 | 8.38 | 4.32 |
Activity ratios provide insight into how effectively a company manages its assets and liabilities to generate sales. Let's analyze the activity ratios of Gibraltar Industries Inc. based on the data provided:
1. Inventory Turnover:
- The inventory turnover ratio has shown fluctuations over the past five years, ranging from 5.96 to 10.23 times.
- The upward trend since 2021 indicates that the company is selling its inventory more efficiently.
- A higher inventory turnover ratio suggests that Gibraltar is effectively managing its inventory levels and converting inventory into sales at a faster rate.
2. Receivables Turnover:
- The receivables turnover ratio has varied over the past five years, ranging from 5.22 to 7.10 times.
- The consistency in this ratio suggests that Gibraltar has been efficient in collecting payments from customers.
- A higher receivables turnover ratio indicates that the company is collecting outstanding receivables quickly.
3. Payables Turnover:
- The payables turnover ratio has shown an increasing trend over the period, reaching 11.03 in 2023.
- The increasing trend in payables turnover may signify that Gibraltar is taking longer to pay its suppliers, which could be beneficial for managing cash flow.
- A higher payables turnover ratio suggests that the company is efficiently managing its trade payables.
4. Working Capital Turnover:
- The working capital turnover ratio has fluctuated over the past five years, with values ranging from 5.04 to 8.37 times.
- The ratio measures how efficiently Gibraltar is utilizing its working capital to generate sales.
- A higher working capital turnover ratio indicates that the company is effectively using its capital resources to drive revenue.
In conclusion, the analysis of activity ratios for Gibraltar Industries Inc. shows that the company has generally been improving its efficiency in managing inventory, accounts receivable, accounts payable, and working capital to drive sales growth over the years.
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 | 43.30 | 58.04 | 61.27 | 46.23 | 33.34 |
| Days of sales outstanding (DSO) | days | 59.49 | 57.02 | 64.42 | 69.99 | 59.94 |
| Number of days of payables | days | 33.10 | 36.31 | 59.90 | 63.36 | 39.08 |
The activity ratios of Gibraltar Industries Inc. provide insights into the efficiency of its operations in managing inventory, collecting receivables, and paying suppliers.
1. Days of Inventory on Hand (DOH): The trend in DOH shows a fluctuation over the past five years, ranging from 35.69 days in 2019 to 61.27 days in 2021. In 2023, the DOH improved to 43.30 days, indicating that the company is managing its inventory more efficiently compared to the previous year.
2. Days of Sales Outstanding (DSO): The DSO metric reflects the average number of days it takes for the company to collect payment from its customers. The trend in DSO has been relatively stable, with a peak of 69.99 days in 2020 and a low of 51.40 days in 2019. In 2023, the DSO increased to 59.49 days, suggesting a minor slowdown in collecting receivables.
3. Number of Days of Payables: This ratio indicates how long it takes for the company to pay its suppliers. The trend in the number of days of payables shows variations, with the lowest value of 33.10 days in 2023 and the highest of 63.36 days in 2020. A decreasing trend in this ratio may imply that the company is paying its suppliers more quickly.
Overall, the analysis of these activity ratios suggests that Gibraltar Industries Inc. has made improvements in managing its inventory and payables. However, there may be room for further optimization in the collection of receivables to enhance the overall efficiency of the company's working capital management.
Long-term
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Fixed asset turnover | 12.80 | 12.68 | 13.83 | 11.53 | 11.49 |
| Total asset turnover | 1.10 | 1.15 | 1.10 | 0.85 | 0.91 |
The fixed asset turnover ratio measures how efficiently a company is utilizing its fixed assets to generate sales. Gibraltar Industries Inc. has shown consistent improvement in this ratio over the past five years, with an increasing trend from 10.98 in 2019 to 12.80 in 2023. This indicates that the company is effectively using its fixed assets to generate revenue.
On the other hand, the total asset turnover ratio reflects how efficiently the company is using all of its assets to generate sales. Gibraltar Industries Inc. has fluctuated in this ratio over the same period, with the highest value of 1.15 in 2022 and the lowest value of 0.85 in 2020. The recent value of 1.10 in 2023 suggests a moderate level of efficiency in utilizing all assets to generate revenue.
Overall, the trend in the fixed asset turnover ratio for Gibraltar Industries Inc. shows a consistent improvement, while the total asset turnover ratio has been relatively stable with some fluctuations. These ratios indicate the company's ability to efficiently generate sales relative to its fixed and total assets.