Simpson Manufacturing Company Inc (SSD)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Inventory turnover | 2.91 | 3.02 | 2.86 | 2.60 | 3.43 |
| Receivables turnover | 7.84 | 7.77 | 7.83 | 6.77 | 7.66 |
| Payables turnover | 17.12 | 15.49 | 16.25 | 20.15 | 20.14 |
| Working capital turnover | 2.75 | 2.32 | 2.54 | 2.07 | 2.26 |
Simpson Manufacturing Company Inc's inventory turnover ratio has fluctuated over the years, with a decrease from 3.43 in 2020 to 2.60 in 2021, followed by an increase to 3.02 in 2023 and then a slight decrease to 2.91 in 2024. This indicates that the company is managing its inventory less efficiently in recent years.
In terms of receivables turnover, the company has maintained a relatively stable performance, with ratios ranging from 6.77 to 7.84 over the five-year period. This suggests that Simpson Manufacturing is collecting its accounts receivable at a consistent pace.
On the other hand, the payables turnover ratio has shown some variability, decreasing from 20.14 in 2020 to 15.49 in 2023, before increasing to 17.12 in 2024. This indicates changes in the company's payment practices with its suppliers.
The working capital turnover ratio has also been inconsistent, with fluctuations from 2.07 in 2021 to 2.75 in 2024. This metric reflects how effectively the company is utilizing its working capital to generate sales.
Overall, Simpson Manufacturing Company Inc's activity ratios show mixed performance, with some areas of stability and others showing fluctuations that may warrant further investigation into the company's operational efficiency and management of its resources.
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 | 125.24 | 120.87 | 127.82 | 140.47 | 106.54 |
| Days of sales outstanding (DSO) | days | 46.54 | 46.95 | 46.62 | 53.89 | 47.64 |
| Number of days of payables | days | 21.32 | 23.56 | 22.46 | 18.11 | 18.13 |
The activity ratios of Simpson Manufacturing Company Inc over the period of December 31, 2020 to December 31, 2024 show some interesting trends.
1. Days of Inventory on Hand (DOH):
- The DOH increased from 106.54 days in 2020 to 140.47 days in 2021, indicating that the company held inventory for a longer period in 2021. However, there was a slight decrease in this ratio in the following years, with 127.82 days in 2022, 120.87 days in 2023, and 125.24 days in 2024. Overall, the trend suggests fluctuations in the management of inventory levels.
2. Days of Sales Outstanding (DSO):
- The DSO increased from 47.64 days in 2020 to 53.89 days in 2021, but then improved in the subsequent years with 46.62 days in 2022, 46.95 days in 2023, and 46.54 days in 2024. This trend indicates that the company improved its efficiency in collecting receivables over time.
3. Number of Days of Payables:
- The number of days of payables remained relatively stable over the period, ranging from 18.11 days in 2021 to 23.56 days in 2023. In 2024, it decreased to 21.32 days. The stability in this ratio suggests that the company maintained consistent payment terms with its suppliers.
Overall, the trends in the activity ratios of Simpson Manufacturing Company Inc reflect fluctuations in inventory management, improvements in receivables collection efficiency, and stable payment terms with suppliers over the analyzed period.
Long-term
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Fixed asset turnover | 4.20 | 5.27 | 5.83 | 6.02 | 4.96 |
| Total asset turnover | 0.82 | 0.82 | 0.84 | 1.05 | 1.03 |
Simpson Manufacturing Company Inc's long-term activity ratios indicate its efficiency in utilizing fixed assets and total assets to generate sales over the years.
1. Fixed Asset Turnover:
- The fixed asset turnover ratio demonstrates how efficiently the company generates sales revenue from its fixed assets.
- From 2020 to 2024, the company's fixed asset turnover ratio has shown some fluctuations.
- The ratio increased from 4.96 in 2020 to a peak of 6.02 in 2021, indicating improved efficiency in utilizing fixed assets to generate sales.
- However, the ratio then slightly decreased to 5.83 in 2022, followed by a more significant drop to 5.27 in 2023, and a further decline to 4.20 in 2024.
- The decreasing trend in the fixed asset turnover ratio may suggest that the company is not effectively leveraging its fixed assets to drive sales growth in recent years.
2. Total Asset Turnover:
- The total asset turnover ratio reflects the company's ability to generate revenue from its total assets.
- Over the same period, Simpson Manufacturing Company Inc's total asset turnover ratio has remained relatively steady.
- The ratio was 1.03 in 2020, gradually increasing to 1.05 in 2021, and then slightly declining to 0.84 in 2022 and maintaining at 0.82 in 2023 and 2024.
- The consistent total asset turnover ratio implies that the company has been able to maintain a stable level of revenue generation relative to its total asset base.
In conclusion, while the company's fixed asset turnover has shown some fluctuations and a decreasing trend, the total asset turnover has remained relatively stable. Management should further analyze the efficiency of utilizing fixed assets to enhance overall operational performance and financial results in the long term.