Sherwin-Williams Co (SHW)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Inventory turnover | 5.20 | 5.28 | 4.88 | 5.92 | 5.37 |
| Receivables turnover | — | — | — | — | — |
| Payables turnover | — | — | — | — | — |
| Working capital turnover | — | — | — | — | — |
Based on the provided data, Sherwin-Williams Co's activity ratios can be analyzed as follows:
1. Inventory Turnover:
- The inventory turnover ratio indicates how many times a company's inventory is sold and replaced during a specific period.
- Sherwin-Williams Co's inventory turnover has fluctuated over the years, ranging from 4.88 to 5.92.
- A higher inventory turnover ratio generally indicates efficient inventory management, as products are sold quickly.
2. Receivables Turnover:
- The receivables turnover ratio measures how effectively a company is collecting payments from its customers.
- The data shows that receivables turnover information is not available for any of the years provided.
- Without this information, it is not possible to assess Sherwin-Williams Co's effectiveness in collecting receivables.
3. Payables Turnover:
- The payables turnover ratio reveals how quickly a company pays its suppliers.
- Similar to receivables turnover, payables turnover information is not provided for Sherwin-Williams Co.
- This ratio is crucial for understanding the company's payment practices and managing cash flow effectively.
4. Working Capital Turnover:
- The working capital turnover ratio measures how efficiently a company utilizes its working capital to generate sales.
- The data indicates that working capital turnover information is not available for any of the years specified.
- This ratio is important in evaluating how well a company is utilizing its current assets to support operations.
Overall, while the inventory turnover ratio provides some insights into Sherwin-Williams Co's inventory management efficiency, the lack of information on receivables turnover, payables turnover, and working capital turnover limits a comprehensive analysis of the company's overall activity ratios.
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 | 70.16 | 69.17 | 74.76 | 61.69 | 68.03 |
| Days of sales outstanding (DSO) | days | — | — | — | — | — |
| Number of days of payables | days | — | — | — | — | — |
Based on the provided data for Sherwin-Williams Co, let's analyze the activity ratios:
1. Days of Inventory on Hand (DOH):
- The DOH for Sherwin-Williams Co has shown a slight increase from 61.69 days on December 31, 2021, to 74.76 days on December 31, 2022, and then a decrease to 70.16 days on December 31, 2024.
- A decrease in DOH is generally favorable as it indicates that the company is holding less inventory, possibly due to efficient inventory management or higher sales turnover.
- However, the increase in DOH from 2021 to 2022 followed by a slight decrease by 2024 may suggest fluctuations in the company's inventory management efficiency that should be further investigated.
2. Days of Sales Outstanding (DSO):
- The data provided does not include information on Days of Sales Outstanding (DSO) for Sherwin-Williams Co, which is typically used to measure how quickly the company collects payments from its customers.
- Without DSO data, it is not possible to assess the efficiency of the company in collecting accounts receivable.
3. Number of Days of Payables:
- Similar to DSO, the data does not provide information on the Number of Days of Payables for Sherwin-Williams Co, which is essential in understanding how long the company takes to pay its suppliers.
- The analysis of payables turnover could provide insights into the company's liquidity position and relationship with its suppliers.
In conclusion, the analysis of Sherwin-Williams Co's activity ratios based on the provided data is limited to Days of Inventory on Hand (DOH), showing some fluctuations over the years. Further information on DSO and payables turnover is necessary to comprehensively evaluate the company's overall efficiency in managing its working capital.
See also:
Long-term
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Fixed asset turnover | — | — | 10.04 | 5.41 | 10.01 |
| Total asset turnover | 0.98 | 1.00 | 0.98 | 0.97 | 0.90 |
Sherwin-Williams Co's fixed asset turnover ratio has exhibited a significant decline from 10.01 in 2020 to 5.41 in 2021, then a subsequent increase to 10.04 in 2022. The figures for 2023 and 2024 are not available.
The fixed asset turnover ratio measures how efficiently the company is generating sales using its fixed assets. A higher ratio indicates better utilization of fixed assets to generate revenue.
In contrast, the total asset turnover ratio has shown a slight increase from 0.90 in 2020 to 0.97 in 2021 and further to 0.98 in 2022 and 2024, with a peak of 1.00 in 2023.
Total asset turnover indicates how efficiently the company is generating sales using all its assets. An increasing trend in this ratio suggests that the company is becoming more efficient in generating sales relative to its total assets.
Overall, the fixed asset turnover ratio's fluctuation indicates varying levels of efficiency in utilizing fixed assets for revenue generation, while the total asset turnover ratio's increase suggests improved efficiency in generating sales relative to all assets over the years analyzed. More information and analysis would be required for a deeper understanding of the company's long-term activity ratios.