RPM International Inc (RPM)
Activity ratios
Short-term
Turnover ratios
| May 31, 2024 | May 31, 2023 | May 31, 2022 | May 31, 2021 | May 31, 2020 | |
|---|---|---|---|---|---|
| Inventory turnover | 6.93 | 5.88 | 5.13 | 5.90 | 6.36 |
| Receivables turnover | 5.08 | 4.74 | 4.62 | 4.70 | 4.75 |
| Payables turnover | 10.20 | 9.80 | 7.77 | 7.71 | 9.63 |
| Working capital turnover | 5.04 | 4.21 | 5.83 | 4.15 | 4.07 |
Inventory turnover measures how efficiently the company is managing its inventory levels. RPM International Inc's inventory turnover has been increasing steadily from 5.13 in 2022 to 6.93 in 2024, indicating that the company is selling its inventory more quickly.
Receivables turnover reflects how effectively the company is collecting its accounts receivables. RPM International Inc's receivables turnover has also been improving over the years, increasing from 4.62 in 2022 to 5.08 in 2024. This suggests that the company is collecting its receivables at a faster rate.
Payables turnover evaluates how well the company is managing its accounts payables. RPM International Inc's payables turnover has shown some fluctuation over the years but has generally been on an upward trend, reaching 10.20 in 2024. A higher payables turnover ratio indicates that the company is paying its suppliers more quickly.
Working capital turnover assesses how efficiently the company is utilizing its working capital to generate sales. RPM International Inc's working capital turnover has varied over the years but has generally shown improvement, with a notable increase from 4.21 in 2023 to 5.04 in 2024. A higher working capital turnover ratio signifies that the company is generating higher sales relative to its working capital.
Overall, RPM International Inc has demonstrated strong performance in managing its activity ratios, as evidenced by improving inventory turnover, receivables turnover, payables turnover, and working capital turnover ratios over the years.
Average number of days
| May 31, 2024 | May 31, 2023 | May 31, 2022 | May 31, 2021 | May 31, 2020 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 52.70 | 62.10 | 71.13 | 61.92 | 57.41 |
| Days of sales outstanding (DSO) | days | 71.85 | 76.96 | 79.04 | 77.68 | 76.83 |
| Number of days of payables | days | 35.80 | 37.24 | 46.95 | 47.34 | 37.92 |
Days of inventory on hand (DOH) measures how many days, on average, inventory is held before being sold. A lower DOH ratio indicates efficient inventory management. RPM International Inc experienced a decreasing trend in DOH from 2019 to 2021, suggesting improved inventory turnover. However, in 2023 and 2024, the DOH increased, indicating a slower turnover of inventory.
Days of sales outstanding (DSO) reflects the average number of days it takes for the company to collect revenue after a sale is made. Lower DSO indicates better accounts receivable management. RPM International Inc saw a decreasing trend in DSO from 2021 to 2024, showing improved efficiency in collecting receivables over the years.
Number of days of payables shows the average number of days the company takes to pay its suppliers. A higher number indicates that the company takes longer to pay its bills, which may be beneficial for cash flow management. RPM International Inc had a fluctuating trend in payables days, with a steep increase in 2022 followed by decreases in 2023 and 2024.
Overall, RPM International Inc has shown improvements in inventory turnover and accounts receivable collection efficiency but exhibited fluctuations in the management of payables over the years. Further analysis of the company's working capital management practices and industry benchmarks could provide more insight into its operational efficiency.
Long-term
| May 31, 2024 | May 31, 2023 | May 31, 2022 | May 31, 2021 | May 31, 2020 | |
|---|---|---|---|---|---|
| Fixed asset turnover | 5.42 | 5.75 | 5.99 | 6.24 | 6.36 |
| Total asset turnover | 1.09 | 1.05 | 0.99 | 0.96 | 0.96 |
RPM International Inc has displayed a steady decline in its total asset turnover ratio over the past five years, dropping from 0.96 in 2020 to 1.09 in 2024. This suggests that the company's ability to generate sales relative to its total assets has improved over the years.
In terms of fixed asset turnover, the company has experienced a consistent downward trend from 6.36 in 2020 to 5.42 in 2024. This indicates that RPM International Inc is generating less revenue for every dollar of fixed assets it owns.
Overall, while the total asset turnover has shown improvement, the fixed asset turnover has decreased, highlighting potential inefficiencies in utilizing the company's fixed assets to generate sales. Further analysis would be required to understand the underlying reasons for these trends and assess their impact on the company's long-term profitability and operational efficiency.