SM Energy Co (SM)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Inventory turnover | 12.24 | 15.37 | 27.26 | 48.49 | 12.17 |
| Receivables turnover | 10.27 | 14.40 | 10.61 | 6.94 | 8.61 |
| Payables turnover | 6.44 | 17.05 | 26.20 | 24.01 | 12.89 |
| Working capital turnover | 8.40 | 24.23 | — | — | — |
Inventory turnover is not provided in the table, which indicates that the company's inventory turnover ratio is not available for analysis.
Receivables turnover has shown a fluctuating trend over the past five years, with a peak of 14.40 in 2022 and a low of 6.93 in 2020. This ratio indicates how efficiently the company is collecting its accounts receivables. A higher ratio suggests that the company is collecting its receivables quickly, which is favorable.
Payables turnover data is missing for all years, making it impossible to evaluate how quickly the company is paying its suppliers.
Working capital turnover has been provided for the years 2023 and 2022. The ratio has decreased significantly from 24.23 in 2022 to 8.40 in 2023. This ratio shows how efficiently the company is using its working capital to generate sales. A higher ratio indicates that the company is efficiently utilizing its resources to generate revenue.
Overall, while the receivables turnover ratio has been fluctuating, the decrease in working capital turnover from 2022 to 2023 warrants further investigation into the company's operational efficiency and working capital management. Moreover, the absence of payables turnover data limits a comprehensive analysis of the company's ability to manage its payables effectively.
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 | 29.82 | 23.74 | 13.39 | 7.53 | 30.00 |
| Days of sales outstanding (DSO) | days | 35.54 | 25.35 | 34.40 | 52.63 | 42.40 |
| Number of days of payables | days | 56.69 | 21.41 | 13.93 | 15.20 | 28.32 |
Analyzing SM Energy Co's activity ratios reveals fluctuations in efficiency over the past five years.
Days of Sales Outstanding (DSO) measures the average number of days it takes for the company to collect revenue after making a sale. In 2023, DSO stands at 35.54 days, showing an increase from the prior year, indicating a slower collection of receivables compared to 2022. This could imply potential challenges in managing accounts receivable efficiently.
On the other hand, Days of Inventory on Hand (DOH) data is unavailable for all years, making it challenging to assess SM Energy Co's inventory management efficiency. Without this information, it is difficult to evaluate the company's ability to efficiently manage its inventory levels and turnover.
Lastly, the Number of Days of Payables is not provided in the data, making it impossible to assess the company's ability to pay its outstanding obligations to suppliers within a given time frame.
In summary, SM Energy Co's performance in managing sales outstanding indicates a recent deterioration in collection efficiency, while the lack of data on inventory and payables hinders a comprehensive analysis of its overall working capital management. Further information on inventory and payables would be necessary to derive more meaningful insights into the company's operational efficiency.
Long-term
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Fixed asset turnover | 0.44 | 0.69 | 0.57 | 0.24 | 0.27 |
| Total asset turnover | 0.37 | 0.59 | 0.50 | 0.23 | 0.25 |
The fixed asset turnover ratio for SM Energy Co has fluctuated over the past five years, from a low of 0.24 in 2020 to a high of 0.69 in 2022. This ratio measures how efficiently the company is using its fixed assets to generate revenue, with a higher ratio indicating better utilization of these assets.
Similarly, the total asset turnover ratio has also varied, ranging from 0.23 in 2020 to 0.59 in 2022. This ratio reflects the company's ability to generate sales from its total assets, including both fixed and current assets.
Overall, both ratios show an increasing trend over the years, indicating improved efficiency in utilizing assets to generate revenue. However, the ratios still remain relatively low, suggesting there is room for further improvement in asset utilization to boost the company's financial performance. Investors and stakeholders may want to monitor these ratios closely to assess the company's operational efficiency and asset management strategies.