SkyWest Inc (SKYW)

Short-term

Turnover ratios

Based on the provided data for Skywest Inc.'s activity ratios:

1. Inventory turnover: The inventory turnover ratio for all quarters is reported as 0.00, indicating that Skywest Inc. did not generate any sales from its inventory during those periods. This may suggest either excessive inventory levels or insufficient demand for the company's products.

2. Receivables turnover: The receivables turnover ratio fluctuated over the quarters, ranging from 24.11 to 42.83. A higher turnover ratio signifies that Skywest Inc. is efficiently collecting cash from its credit sales. The significant variations in this ratio may indicate changes in the company's credit policies or the creditworthiness of its customers.

3. Payables turnover: The payables turnover ratio is reported as 0.00 for all quarters, indicating that Skywest Inc. did not settle its accounts payable during those periods. This could suggest that the company may be taking advantage of trade credit terms or facing challenges in managing its payables effectively.

4. Working capital turnover: The working capital turnover ratio varied substantially between quarters, with values ranging from 15.12 to 168.50. A higher turnover ratio typically indicates that Skywest Inc. is efficiently utilizing its working capital to generate sales. The significant fluctuations in this ratio could be attributed to changes in the company's operating efficiency or seasonal trends in its business operations.

In summary, the analysis of Skywest Inc.'s activity ratios suggests that the company may need to address issues related to inventory management, accounts receivable collection, and payables management to improve its overall operational efficiency and financial performance.

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Average number of days

Based on the activity ratios provided for Skywest Inc., the following analysis can be made:

1. Days of Inventory on Hand (DOH): Unfortunately, data for the Days of Inventory on Hand is missing across all quarters in the table. This ratio typically measures how many days a company takes to turn its inventory into sales. Without this information, it is challenging to assess Skywest Inc.'s efficiency in managing its inventory levels.

2. Days of Sales Outstanding (DSO): The Days of Sales Outstanding ratio shows an increasing trend from the third quarter of 2022 to the fourth quarter of 2023. This indicates that, on average, it is taking Skywest Inc. longer to collect payments from its customers over time. An increasing DSO could indicate possible issues with credit policies, collection practices, or the financial health of customers.

3. Number of Days of Payables: Similar to the Days of Inventory on Hand, data for the Number of Days of Payables is not available in the table. This ratio would typically reflect how many days a company takes to pay its suppliers, providing insight into its liquidity and relationships with vendors.

In conclusion, with limited information on inventory management and accounts payable turnover, the increasing trend in Days of Sales Outstanding raises some concerns about Skywest Inc.'s collection efficiency and potential impacts on cash flow. Further analysis incorporating additional financial metrics would be necessary to gain a comprehensive understanding of the company's operational performance and financial health.

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Long-term

Skywest Inc.'s long-term activity ratios, specifically the fixed asset turnover and total asset turnover, provide insights into the company's efficiency in generating sales relative to its long-term assets. The fixed asset turnover ratio measures the company's ability to utilize its fixed assets to generate sales, while the total asset turnover ratio assesses the efficiency of using all assets to generate sales.

Over the past eight quarters, Skywest Inc.'s fixed asset turnover has remained relatively stable, fluctuating between 0.52 and 0.55. This indicates that the company is generating sales at a consistent rate relative to its investment in fixed assets, such as property, plant, and equipment.

Similarly, the total asset turnover ratio for Skywest Inc. has also shown consistency, ranging from 0.41 to 0.42 over the same period. This suggests that the company is effectively utilizing its total assets, including both current and long-term assets, to generate revenue.

Overall, the stable trends in both fixed asset turnover and total asset turnover ratios for Skywest Inc. indicate a consistent level of efficiency in capital utilization over the long term. However, further analysis in conjunction with other financial indicators would provide a more comprehensive evaluation of the company's operational performance and asset management strategies.