Rush Enterprises A Inc (RUSHA)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Inventory turnover | 3.51 | 3.51 | 3.93 | 3.95 | 4.50 |
| Receivables turnover | 21.48 | 28.00 | 28.36 | 30.85 | 24.10 |
| Payables turnover | 25.71 | 39.05 | 32.70 | 32.99 | 34.86 |
| Working capital turnover | 10.55 | 13.50 | 16.17 | 15.97 | 14.31 |
Rush Enterprises A Inc's activity ratios provide insights into how efficiently the company manages its assets and operations.
1. Inventory Turnover: The trend in inventory turnover ratio indicates a slight decline from 4.50 in 2020 to 3.51 in 2024. A decreasing trend in inventory turnover may suggest that the company is holding onto its inventory for a longer time, which could tie up capital and impact profitability.
2. Receivables Turnover: The receivables turnover ratio increased from 24.10 in 2020 to a peak of 30.85 in 2021 before declining to 21.48 in 2024. This indicates that the company is collecting receivables more efficiently in the early years but faced challenges in collecting receivables in a timely manner in later years.
3. Payables Turnover: The payables turnover ratio fluctuated over the years, with a peak of 39.05 in 2023 and a low of 25.71 in 2024. A higher payables turnover ratio suggests that the company is paying its suppliers more frequently, which could positively impact cash flow management.
4. Working Capital Turnover: The working capital turnover ratio declined from 14.31 in 2020 to 10.55 in 2024. This decline may indicate that the company's efficiency in utilizing working capital to generate revenue has decreased over the years.
Overall, the analysis of Rush Enterprises A Inc's activity ratios suggests that there are areas where the company can improve efficiency in managing inventory, receivables, payables, and working capital to enhance operational performance and financial health.
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 | 104.02 | 103.84 | 92.93 | 92.31 | 81.15 |
| Days of sales outstanding (DSO) | days | 17.00 | 13.03 | 12.87 | 11.83 | 15.14 |
| Number of days of payables | days | 14.20 | 9.35 | 11.16 | 11.07 | 10.47 |
Based on the provided data, we can analyze the activity ratios of Rush Enterprises A Inc as follows:
1. Days of Inventory on Hand (DOH): The DOH ratio measures how many days on average it takes the company to sell its inventory. The trend shows an increase in the number of days from 81.15 days in 2020 to 104.02 days in 2024. This indicates that the company is holding inventory for a longer period, which may lead to higher carrying costs and potential obsolescence risks.
2. Days of Sales Outstanding (DSO): The DSO ratio indicates how long it takes for the company to collect its accounts receivable. The trend in DSO fluctuates over the years, with a decrease from 15.14 days in 2020 to 11.83 days in 2021 followed by an increase to 17.00 days in 2024. A lower DSO is generally favorable as it indicates quicker collection of receivables, while a higher DSO may point to potential issues with collecting payments promptly.
3. Number of Days of Payables: This ratio shows the number of days it takes for the company to pay its suppliers. The trend reveals a varying pattern, with a slight increase in the number of days from 10.47 days in 2020 to 14.20 days in 2024. A higher number of days of payables may suggest that the company is taking longer to settle its payables, which could impact supplier relationships or indicate cash flow challenges.
In summary, Rush Enterprises A Inc's activity ratios highlight different aspects of its management of inventory, receivables, and payables. The increasing trend in Days of Inventory on Hand and Days of Sales Outstanding, along with the fluctuating trend in Number of Days of Payables, suggest the need for closer monitoring and potential improvements in managing working capital effectively.
Long-term
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Fixed asset turnover | 4.83 | 5.33 | 5.19 | 4.01 | 3.93 |
| Total asset turnover | 1.69 | 1.82 | 1.86 | 1.64 | 1.59 |
Rush Enterprises A Inc has shown a positive trend in its fixed asset turnover ratio over the years. The fixed asset turnover ratio measures how efficiently the company is utilizing its fixed assets to generate sales. From 2020 to 2024, the ratio has increased from 3.93 to 4.83, indicating that the company is generating more revenue per dollar of fixed assets invested.
On the other hand, the total asset turnover ratio, which reflects the company's ability to generate revenue from its total assets, has shown some fluctuation. While the ratio increased from 1.59 in 2020 to 1.86 in 2022, it decreased slightly to 1.69 in 2024. This may suggest that the company's operational efficiency in utilizing all assets to generate sales has been mixed over the years.
Overall, the increasing trend in fixed asset turnover ratio indicates that Rush Enterprises A Inc has been able to effectively utilize its fixed assets to drive sales growth. However, the fluctuation in total asset turnover ratio may require further analysis to understand the company's overall efficiency in generating sales from all assets.