Rush Enterprises A Inc (RUSHA)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Inventory turnover | 3.51 | 3.93 | 3.95 | 4.50 | 3.61 |
| Receivables turnover | 28.00 | 28.36 | 30.85 | 24.10 | 28.96 |
| Payables turnover | 39.05 | 32.70 | 32.99 | 34.86 | 35.78 |
| Working capital turnover | 13.50 | 16.17 | 15.97 | 14.31 | 28.32 |
Activity ratios provide insights into how efficiently a company manages its assets and liabilities to generate sales.
1. Inventory Turnover: The inventory turnover ratio measures how many times a company sells its inventory during a specific period. Rush Enterprises A Inc's inventory turnover has shown a slight decline over the past five years, from 4.50 in 2020 to 3.51 in 2023. This suggests that the company has been holding onto its inventory for longer periods, which may indicate inefficiencies in managing and selling its inventory.
2. Receivables Turnover: The receivables turnover ratio indicates how quickly a company collects payment from its customers. Rush Enterprises A Inc's receivables turnover has been relatively stable over the years, ranging from 24.10 in 2020 to 30.85 in 2021. This indicates that the company has been efficient in collecting payments from customers, with a slight improvement in 2021.
3. Payables Turnover: The payables turnover ratio shows how quickly a company pays its suppliers. Rush Enterprises A Inc's payables turnover has been increasing over the past five years, from 34.86 in 2020 to 39.05 in 2023. This implies that the company is taking longer to pay its suppliers, which may indicate improved cash flow management or renegotiated payment terms.
4. Working Capital Turnover: The working capital turnover ratio measures how efficiently a company utilizes its working capital to generate sales. Rush Enterprises A Inc's working capital turnover has been fluctuating over the years, from 14.31 in 2020 to 16.17 in 2022. The decrease in 2023 to 13.50 indicates a lower efficiency in utilizing working capital to generate revenue compared to the previous year.
In conclusion, while the company has shown efficiency in collecting payments from customers and paying suppliers, there are indications of challenges in managing inventory and working capital effectively. Further analysis is recommended to understand the underlying factors driving these trends and to identify areas for improvement in operational efficiency.
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 | 103.84 | 92.93 | 92.31 | 81.15 | 101.17 |
| Days of sales outstanding (DSO) | days | 13.03 | 12.87 | 11.83 | 15.14 | 12.61 |
| Number of days of payables | days | 9.35 | 11.16 | 11.07 | 10.47 | 10.20 |
Based on the provided data for Rush Enterprises A Inc, we can analyze the activity ratios as follows:
1. Days of Inventory on Hand (DOH):
- The average number of days it takes for Rush Enterprises A Inc to sell its inventory has increased steadily over the past five years, from 92.31 days in 2021 to 103.84 days in 2023.
- This indicates that the company is holding onto its inventory for a longer period before selling it, possibly due to factors such as changing consumer demand or production issues.
2. Days of Sales Outstanding (DSO):
- The days of sales outstanding have fluctuated over the past five years, with a slight increase from 11.83 days in 2021 to 13.03 days in 2023.
- A higher DSO suggests that Rush Enterprises A Inc is taking longer to collect payments from its customers, which could indicate potential issues with accounts receivable management or customer creditworthiness.
3. Number of Days of Payables:
- The number of days of payables has shown some variability but has remained relatively stable over the five-year period, ranging from 9.35 days in 2023 to 11.16 days in 2022.
- This ratio indicates the average number of days Rush Enterprises A Inc takes to pay its suppliers. A lower number of days of payables may imply that the company is paying its suppliers more quickly, potentially to take advantage of early payment discounts or maintain good relationships with suppliers.
In summary, the analysis of Rush Enterprises A Inc's activity ratios reveals trends and fluctuations in inventory management, accounts receivable collection, and accounts payable practices over the past five years. Further investigation into the underlying reasons for these changes would be essential to assess the company's overall efficiency and effectiveness in managing its working capital and operational activities.
Long-term
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Fixed asset turnover | 5.33 | 5.19 | 4.01 | 3.93 | 4.54 |
| Total asset turnover | 1.82 | 1.86 | 1.64 | 1.59 | 1.71 |
The long-term activity ratios of Rush Enterprises A Inc, as indicated by the fixed asset turnover and total asset turnover ratios, demonstrate the company's efficiency in generating sales relative to its fixed and total assets over the past five years.
The fixed asset turnover ratio has shown an overall increasing trend from 2019 to 2023, reaching a value of 5.33 in 2023, indicating that the company generated $5.33 in sales for every dollar invested in fixed assets. This implies that Rush Enterprises A Inc has been effectively utilizing its fixed assets to drive revenue growth.
Similarly, the total asset turnover ratio has fluctuated slightly but has generally remained within a relatively stable range over the same period, with a value of 1.82 in 2023. This implies that the company generated $1.82 in sales for every dollar invested in total assets.
Overall, the trend in both the fixed asset turnover and total asset turnover ratios suggests that Rush Enterprises A Inc has been successful in managing its assets efficiently to generate sales, indicating effective asset utilization and a solid operational performance.