SM Energy Co (SM)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Inventory turnover | — | 22.22 | 25.16 | 53.11 | 37.70 |
| Receivables turnover | — | — | — | — | — |
| Payables turnover | — | — | — | — | — |
| Working capital turnover | — | 8.40 | 24.14 | — | — |
Based on the provided data for SM Energy Co, let's analyze the activity ratios:
1. Inventory Turnover:
- SM Energy Co's inventory turnover has shown variation over the years. It increased from 37.70 in 2020 to 53.11 in 2021, indicating a more efficient management of inventory. However, there was a significant decline in 2022 to 25.16 and further to 22.22 in 2023. This decrease may signal potential issues such as slow inventory turnover or excess inventory levels that need to be addressed. The lack of data for 2024 prevents further analysis for that year.
2. Receivables Turnover:
- The data provided does not include information on SM Energy Co's receivables turnover for any of the years specified. This lack of data prevents any analysis or insights into the efficiency of the company in collecting payments from its customers.
3. Payables Turnover:
- Similarly, there is no data available for SM Energy Co's payables turnover for the specified years. Therefore, it is not possible to evaluate the company's efficiency in managing its payables turnover and vendor payment practices.
4. Working Capital Turnover:
- The working capital turnover ratio provides insight into how effectively a company is utilizing its working capital to generate sales revenue. The data shows that in 2022, the ratio was 24.14, indicating that for every dollar of working capital invested, the company generated $24.14 in revenue. However, there was a notable decrease in 2023 to 8.40, suggesting a potential decline in efficiency in utilizing working capital. The lack of data for 2020, 2021, and 2024 limits a comprehensive analysis across all years.
In conclusion, while the inventory turnover ratio fluctuated, indicating changes in inventory management efficiency, the lack of data for receivables turnover, payables turnover, and limited data for working capital turnover hinders a complete analysis of SM Energy Co's activity ratios over the specified years.
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 | — | 16.43 | 14.51 | 6.87 | 9.68 |
| Days of sales outstanding (DSO) | days | — | — | — | — | — |
| Number of days of payables | days | — | — | — | — | — |
The activity ratios of SM Energy Co provide insight into its efficiency in managing inventory, collecting receivables, and paying its creditors.
1. Days of Inventory on Hand (DOH): The trend in DOH indicates the number of days it takes for the company to sell its inventory. A decreasing trend in DOH from 2020 to 2021 suggests that SM Energy Co is managing its inventory more efficiently. However, the significant increase in DOH in 2022 and 2023 may indicate potential issues with inventory management or changes in sales patterns. The absence of data for 2024 makes it difficult to evaluate the current inventory turnover efficiency.
2. Days of Sales Outstanding (DSO): The absence of data for DSO indicates that there is no information available to analyze the company's efficiency in collecting receivables. Without this data, it is challenging to assess the effectiveness of SM Energy Co's credit and collection policies.
3. Number of Days of Payables: Similarly, the lack of information on the number of days of payables hinders the analysis of how quickly SM Energy Co pays its suppliers. Understanding this metric is crucial for evaluating the company's relationship with its creditors and managing its working capital effectively.
In conclusion, while the trend in Days of Inventory on Hand provides some insights into SM Energy Co's inventory management efficiency, the limited data on Days of Sales Outstanding and Days of Payables restrict a more comprehensive analysis of the company's overall activity ratios.
Long-term
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Fixed asset turnover | — | — | 0.69 | 0.57 | 0.24 |
| Total asset turnover | 0.31 | 0.37 | 0.59 | 0.50 | 0.23 |
The fixed asset turnover ratio for SM Energy Co has shown an improving trend over the period from 2020 to 2022, increasing from 0.24 to 0.69, indicating that the company is generating more revenue relative to its fixed assets. However, the ratio was not provided for 2023 and 2024.
In terms of total asset turnover, SM Energy Co's performance has been somewhat volatile. The ratio increased from 0.23 in 2020 to 0.59 in 2022, suggesting more efficient use of total assets to generate sales. However, there was a decrease in 2023 to 0.37 and a further decline to 0.31 in 2024, which may indicate a potential decrease in sales generated per dollar of total assets invested.
Overall, the long-term activity ratios for SM Energy Co suggest improvements in fixed asset turnover and total asset turnover up to 2022, but a subsequent decline in total asset turnover from 2023 to 2024. It would be important to further examine the reasons behind these fluctuations to assess the company's operational efficiency and asset utilization.