Gibraltar Industries Inc (ROCK)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Inventory turnover | 6.93 | 8.43 | 6.29 | 5.96 | 7.90 |
| Receivables turnover | 7.73 | 6.14 | 6.40 | 5.67 | 5.22 |
| Payables turnover | 8.15 | 11.03 | 10.05 | 6.09 | 5.76 |
| Working capital turnover | 3.30 | 5.82 | 6.66 | 8.37 | 8.38 |
Gibraltar Industries Inc's activity ratios show trends in how effectively the company manages its assets and liabilities to generate sales.
1. Inventory Turnover:
- The inventory turnover ratio declined from 7.90 in 2020 to 5.96 in 2021 but improved to 8.43 in 2023 only to decrease to 6.93 in 2024. Overall, the company's inventory turnover varies, suggesting some inconsistency in managing inventory levels.
2. Receivables Turnover:
- The receivables turnover ratio increased steadily from 5.22 in 2020 to 7.73 in 2024. This indicates that Gibraltar Industries Inc is collecting its accounts receivable more efficiently over time.
3. Payables Turnover:
- The payables turnover ratio showed fluctuations, with a peak at 11.03 in 2023 after starting at 5.76 in 2020. This may indicate changes in payment terms with suppliers or adjustments in the company's working capital management.
4. Working Capital Turnover:
- The working capital turnover ratio decreased from 8.38 in 2020 to 3.30 in 2024, suggesting that the company may be utilizing its working capital less efficiently over the years, as it generates fewer sales per unit of working capital.
In summary, while Gibraltar Industries Inc has shown improvements in receivables turnover, indicating efficient collection of receivables, there are fluctuations in inventory turnover, payables turnover, and a decline in working capital turnover, signaling possible challenges in managing inventory, payables, and working capital effectively to support sales generation.
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 | 52.69 | 43.30 | 58.04 | 61.27 | 46.23 |
| Days of sales outstanding (DSO) | days | 47.23 | 59.49 | 57.02 | 64.42 | 69.99 |
| Number of days of payables | days | 44.78 | 33.10 | 36.31 | 59.90 | 63.36 |
Based on the provided data for Gibraltar Industries Inc, let's analyze the activity ratios:
1. Days of Inventory on Hand (DOH):
- The company's DOH has shown fluctuations over the years. It increased from 46.23 days in 2020 to 61.27 days in 2021 before slightly decreasing to 58.04 days in 2022. Subsequently, it reduced significantly to 43.30 days in 2023 and then increased again to 52.69 days in 2024.
- A lower DOH indicates that the company is managing its inventory efficiently by selling products faster, while a higher DOH may suggest overstocking or slow-moving inventory.
2. Days of Sales Outstanding (DSO):
- The DSO for Gibraltar Industries Inc decreased consistently from 69.99 days in 2020 to 47.23 days in 2024 with minor fluctuations in between.
- A lower DSO signifies that the company is collecting receivables faster, indicating strong credit management and efficient collections processes.
3. Number of Days of Payables:
- The number of days of payables for the company has shown a decreasing trend over the years. It decreased from 63.36 days in 2020 to 44.78 days in 2024.
- A lower number of days of payables could suggest that the company is paying its suppliers quicker, which may sometimes signal strong relationships with suppliers or potential cash flow challenges.
In summary, Gibraltar Industries Inc has shown varying levels of efficiency in managing its inventory, receivables, and payables over the years. The company should continue to monitor and adjust these activity ratios to optimize its working capital management and overall operational efficiency.
Long-term
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Fixed asset turnover | 11.92 | 12.80 | 12.68 | 13.83 | 11.53 |
| Total asset turnover | 0.92 | 1.10 | 1.15 | 1.10 | 0.85 |
The Fixed asset turnover ratio measures the efficiency of a company in generating sales revenue from its investments in fixed assets. In the case of Gibraltar Industries Inc, the ratio has shown fluctuations over the five-year period, starting at 11.53 in 2020, peaking at 13.83 in 2021, and gradually stabilizing around 12.68 to 12.80 in 2022 and 2023, before decreasing to 11.92 in 2024. This indicates that the company has been effectively utilizing its fixed assets to generate sales, with a slight decline in efficiency in the most recent year.
On the other hand, the Total asset turnover ratio reflects how well a company is able to generate revenue from its total assets. Gibraltar Industries Inc has shown a consistent increase in this ratio from 0.85 in 2020 to 1.10 in 2021 and further to 1.15 in 2022, indicating an improvement in the company's overall asset utilization efficiency. However, the ratio dipped slightly to 1.10 in 2023 and then decreased notably to 0.92 in 2024, signaling a potential decline in revenue generation from its total assets in the most recent period.
Overall, while Gibraltar Industries Inc has demonstrated efficient utilization of its fixed assets to generate sales, there may be a need to further analyze the decrease in total asset turnover in 2024 to ensure sustained efficiency in asset utilization and revenue generation.