Reliance Steel & Aluminum Co (RS)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Inventory turnover | 4.80 | 5.14 | 5.90 | 4.65 | 4.25 |
| Receivables turnover | — | — | — | — | — |
| Payables turnover | — | — | — | — | — |
| Working capital turnover | 5.16 | 3.77 | 4.85 | 4.55 | 3.53 |
Reliance Steel & Aluminum Co's inventory turnover has shown an overall increasing trend, from 4.25 in 2020 to 4.80 in 2024. This indicates that the company is managing its inventory more efficiently over the years, as higher turnover ratios suggest faster movement of inventory. In 2022, the inventory turnover reached its peak at 5.90, highlighting a significant improvement in inventory management.
On the other hand, the receivables turnover, payables turnover, and working capital turnover ratios are not provided for the years in focus. Without this data, it is challenging to assess the efficiency of the company's collection of receivables, management of payables, and utilization of working capital.
Overall, the increasing trend in inventory turnover for Reliance Steel & Aluminum Co is a positive indicator of its operational efficiency and effectiveness in managing its inventory levels. However, a complete analysis of the company's activity ratios would require additional data on receivables turnover, payables turnover, and working capital turnover for a more comprehensive assessment of its overall operational 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 | 76.04 | 71.00 | 61.86 | 78.49 | 85.88 |
| Days of sales outstanding (DSO) | days | — | — | — | — | — |
| Number of days of payables | days | — | — | — | — | — |
Based on the provided data for Reliance Steel & Aluminum Co, we can analyze the activity ratios as follows:
1. Days of Inventory on Hand (DOH):
- December 31, 2020: 85.88 days
- December 31, 2021: 78.49 days
- December 31, 2022: 61.86 days
- December 31, 2023: 71.00 days
- December 31, 2024: 76.04 days
The trend shows a decrease in the number of days of inventory on hand over the years, indicating an improvement in inventory management efficiency. Lower DOH values suggest that the company is more effective in managing its inventory levels and turning over its inventory faster.
2. Days of Sales Outstanding (DSO):
- All years show "— days"
Unfortunately, the data provided does not include information on Days of Sales Outstanding (DSO), which measures how quickly a company collects its accounts receivable. Without this data, we are unable to analyze the efficiency of the company in collecting payments from its customers.
3. Number of Days of Payables:
- All years show "— days"
Similar to DSO, the data for the Number of Days of Payables is not available. This ratio measures how long a company takes to pay its suppliers. Without this information, it is challenging to assess the efficiency of the company in managing its payables.
In conclusion, based on the available DOH data, Reliance Steel & Aluminum Co seems to have improved its inventory management efficiency over the years. However, the lack of information on DSO and the number of days of payables limits a comprehensive analysis of the company's overall activity and working capital management.
Long-term
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Fixed asset turnover | — | — | 7.77 | 6.84 | 4.92 |
| Total asset turnover | 1.38 | 1.41 | 1.65 | 1.48 | 1.09 |
The analysis of Reliance Steel & Aluminum Co's long-term activity ratios reveals a positive trend in the company's efficiency in utilizing its fixed assets and total assets to generate revenue.
- The fixed asset turnover ratio, which measures how efficiently the company is using its fixed assets to generate sales, has shown a consistent increase over the years. The ratio improved from 4.92 in 2020 to 7.77 in 2022, indicating that the company is generating more revenue per dollar invested in fixed assets.
- This improvement suggests that Reliance Steel & Aluminum Co has been successful in optimizing the utilization of its fixed assets, potentially through better management of equipment and infrastructure.
- In terms of total asset turnover, which reflects the company's ability to generate sales from its total assets, there has been a general upward trend from 1.09 in 2020 to 1.38 in 2024. Although there was a slight dip in 2023, the overall trend indicates an increasing efficiency in generating revenue relative to the total assets employed.
- The rising total asset turnover ratio signifies that Reliance Steel & Aluminum Co has been achieving higher sales with the resources available, demonstrating effective asset management.
Overall, the improving trend in both fixed asset turnover and total asset turnover ratios suggests that Reliance Steel & Aluminum Co has been successful in enhancing its operational efficiency and maximizing the utilization of its assets for revenue generation.