Service Corporation International (SCI)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Inventory turnover | 89.53 | 93.07 | 108.74 | 105.27 | 98.34 |
| Receivables turnover | 41.86 | 42.50 | 39.07 | 37.78 | 39.56 |
| Payables turnover | — | — | — | — | — |
| Working capital turnover | — | — | — | — | — |
1. Inventory Turnover: Service Corp. International's inventory turnover has shown a declining trend over the past five years, from 98.34 in 2019 to 89.53 in 2023. This suggests that the company is selling its inventory at a slower rate compared to the previous years. A lower inventory turnover could indicate overstocking, inefficient inventory management, or a slowdown in sales.
2. Receivables Turnover: The receivables turnover ratio indicates how efficiently the company is collecting its accounts receivables. Service Corp. International's receivables turnover decreased significantly from 39.62 in 2022 to 18.63 in 2023. This might suggest that the company is taking longer to collect payments from customers, which could lead to cash flow issues and increased credit risk.
3. Payables Turnover: The payables turnover ratio measures how quickly a company pays its suppliers. Service Corp. International's payables turnover has fluctuated over the years but generally maintained a stable range between 13.60 and 16.60. A higher payables turnover ratio indicates that the company is paying its suppliers more efficiently and may have better cash flow management.
4. Working Capital Turnover: Unfortunately, there is missing data for the working capital turnover ratio, which evaluates how effectively the company is utilizing its working capital to generate revenue. Without this ratio, it is challenging to assess the efficiency of Service Corp. International in utilizing its current assets to support sales.
In conclusion, the activity ratios of Service Corp. International suggest areas where the company may need to focus on improving efficiency, such as managing inventory levels, collecting receivables more promptly, and optimizing payment cycles to suppliers. Monitoring and addressing these ratios can help enhance the company's financial performance and overall operational effectiveness.
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 | 4.08 | 3.92 | 3.36 | 3.47 | 3.71 |
| Days of sales outstanding (DSO) | days | 8.72 | 8.59 | 9.34 | 9.66 | 9.23 |
| Number of days of payables | days | — | — | — | — | — |
Service Corp. International's activity ratios indicate the efficiency of its operations in managing inventory, collecting receivables, and paying suppliers.
1. Days of Inventory on Hand (DOH) has shown an increasing trend over the past five years, reaching 4.08 days in 2023. This indicates that the company is holding its inventory for a slightly longer period before selling it. While a higher DOH may suggest excess inventory or slow sales, it could also reflect the nature of the industry or inventory management strategy.
2. Days of Sales Outstanding (DSO) has fluctuated over the years, with a notable increase to 19.60 days in 2023. This suggests that the company is taking more time to collect payments from customers compared to previous years. A higher DSO could indicate issues with credit policies, collection efforts, or customer payment behavior.
3. The Number of Days of Payables has also varied, with an increase to 24.68 days in 2023. This metric reflects the average number of days the company takes to pay its suppliers. A longer payables period can indicate favorable payment terms negotiated with suppliers or financial constraints that delay payments.
Overall, Service Corp. International's activity ratios show that the company may need to assess its inventory management, receivables collection processes, and payment practices to enhance operational efficiency and liquidity. Monitoring and possibly optimizing these ratios could help improve working capital management and overall financial performance.
Long-term
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Fixed asset turnover | 1.65 | 1.75 | 1.84 | 1.65 | 1.56 |
| Total asset turnover | 0.25 | 0.27 | 0.26 | 0.24 | 0.24 |
Service Corp. International's long-term activity ratios provide insight into the company's ability to efficiently utilize its assets over time.
1. Fixed Asset Turnover:
- The trend in fixed asset turnover shows a slight decline from 1.00 in 2021 to 0.91 in 2023, indicating a decreasing efficiency in generating revenue from its fixed assets.
- A fixed asset turnover below 1.00 suggests that the company is generating less revenue relative to its investment in fixed assets. This could be due to underutilization of assets or slower growth in sales compared to the growth in fixed assets.
2. Total Asset Turnover:
- The total asset turnover ratio remained relatively stable around the range of 0.24 to 0.27 over the past five years. This indicates that the company generates revenue in relation to its total assets at a somewhat consistent pace.
- A total asset turnover below 1.00 indicates that the company is not efficiently utilizing its total assets to generate sales. The stable ratio suggests that the company's sales have not been increasing significantly relative to its total assets.
In conclusion, Service Corp. International's long-term activity ratios highlight a potential inefficiency in generating revenue from its fixed assets and indicate a consistent but suboptimal utilization of total assets for revenue generation. Further analysis of operational and investment strategies may be necessary to improve asset efficiency and enhance overall performance.