Simpson Manufacturing Company Inc (SSD)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Inventory turnover | 2.91 | 2.94 | 3.17 | 3.03 | 3.02 | 3.24 | 3.12 | 2.85 | 2.85 | 2.81 | 2.56 | 2.78 | 2.60 | 2.83 | 3.45 | 3.43 | 3.43 | 3.65 | 3.48 | 3.61 |
| Receivables turnover | 7.85 | 6.13 | 5.84 | 6.42 | 7.77 | 6.20 | 5.54 | 6.32 | 7.83 | 6.14 | 5.06 | 5.35 | 6.78 | 6.11 | 5.65 | 5.85 | 7.66 | 5.49 | 5.08 | 6.92 |
| Payables turnover | 17.12 | 15.55 | 16.17 | 16.32 | 15.48 | 17.17 | 16.69 | 17.21 | 16.24 | 15.36 | 12.22 | 16.16 | 20.14 | 17.46 | 17.74 | 15.34 | 20.14 | 22.45 | 18.82 | 20.74 |
| Working capital turnover | 2.75 | 2.31 | 2.27 | 2.26 | 2.32 | 2.07 | 2.20 | 2.41 | 2.54 | 2.32 | 2.25 | 1.16 | 2.08 | 2.05 | 2.11 | 2.24 | 2.26 | 1.97 | 1.85 | 1.98 |
Simpson Manufacturing Company Inc's inventory turnover ratio shows a gradual decline over the latest four quarters, from 3.61 in March 2020 to 2.91 in December 2024. This indicates that inventory is being turned over less frequently, possibly pointing to issues with managing stock levels efficiently.
On the other hand, the receivables turnover ratio fluctuates throughout the period, with a general trend of increase from 6.92 in March 2020 to 7.85 in December 2024. This suggests that the company has been collecting receivables more effectively over time, which is a positive indication of its ability to convert credit sales into cash.
The payables turnover ratio also displays variation, with a downward trend from 20.74 in March 2020 to 17.12 in December 2024. A lower payables turnover ratio could imply that the company is taking longer to pay its suppliers, potentially signaling liquidity challenges or strained relationships with vendors.
Lastly, the working capital turnover ratio demonstrates volatility but shows an overall increase from 1.98 in March 2020 to 2.75 in December 2024. This improvement suggests that the company is efficiently utilizing its working capital to generate sales, highlighting better operational efficiency.
In summary, Simpson Manufacturing Company Inc should focus on addressing the declining trend in inventory turnover and payables turnover while maintaining the positive momentum in receivables turnover and working capital turnover to enhance its overall liquidity and operational performance.
Average number of days
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 125.24 | 124.09 | 115.09 | 120.65 | 120.95 | 112.54 | 117.01 | 128.25 | 127.87 | 130.10 | 142.71 | 131.14 | 140.55 | 129.17 | 105.94 | 106.54 | 106.51 | 100.04 | 104.73 | 101.10 |
| Days of sales outstanding (DSO) | days | 46.52 | 59.50 | 62.54 | 56.87 | 46.95 | 58.87 | 65.83 | 57.76 | 46.62 | 59.43 | 72.17 | 68.23 | 53.82 | 59.73 | 64.56 | 62.41 | 47.64 | 66.52 | 71.84 | 52.75 |
| Number of days of payables | days | 21.32 | 23.47 | 22.57 | 22.36 | 23.58 | 21.25 | 21.87 | 21.20 | 22.47 | 23.77 | 29.86 | 22.59 | 18.12 | 20.91 | 20.58 | 23.79 | 18.12 | 16.26 | 19.40 | 17.59 |
The activity ratios of Simpson Manufacturing Company Inc provide insights into the efficiency of the company's inventory management, accounts receivable collection, and accounts payable turnover.
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. Simpson Manufacturing Company Inc experienced fluctuations in its inventory turnover over the analyzed period. There was a gradual increase in DOH from March 31, 2020, to December 31, 2021, indicating slower inventory turnover. However, from March 31, 2022, to December 31, 2024, DOH decreased, showing an improvement in inventory turnover efficiency.
2. Days of Sales Outstanding (DSO): DSO represents the average number of days it takes for the company to collect its accounts receivable. Simpson Manufacturing Company Inc witnessed fluctuations in DSO throughout the timeframe. Initially, there was a fluctuating pattern, but from December 31, 2021, to December 31, 2024, there was a consistent decrease in DSO, indicating improvement in accounts receivable collection efficiency.
3. Number of Days of Payables: This ratio reflects the average number of days it takes for the company to pay its suppliers. Simpson Manufacturing Company Inc's payables turnover remained relatively stable over the period, with slight variations. The company managed its payables efficiently, maintaining a balance between timely payments and optimizing cash flow.
In conclusion, Simpson Manufacturing Company Inc demonstrated improvements in inventory turnover and accounts receivable collection efficiency over the analyzed period. The stability in payables turnover indicates effective management of supplier payments while ensuring optimal cash flow management.
Long-term
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Fixed asset turnover | 4.20 | 5.95 | 4.80 | 5.04 | 5.27 | 6.62 | 5.73 | 5.82 | 5.83 | 6.02 | 5.48 | 6.45 | 6.03 | 5.66 | 5.53 | 5.20 | 4.96 | 5.04 | 4.81 | 4.73 |
| Total asset turnover | 0.82 | 0.76 | 0.79 | 0.81 | 0.82 | 0.77 | 0.79 | 0.84 | 0.84 | 0.82 | 0.76 | 0.75 | 1.06 | 1.02 | 1.03 | 1.03 | 1.03 | 0.97 | 0.92 | 0.97 |
Simpson Manufacturing Company Inc's long-term activity ratios indicate how efficiently the company is utilizing its assets to generate revenue.
1. Fixed Asset Turnover:
- Simpson's fixed asset turnover ratio has shown fluctuations over the years, ranging from a low of 4.73 in March 2020 to a peak of 6.62 in September 2023.
- The company's fixed asset turnover improved overall, with a notable increase from 5.48 in June 2022 to 6.02 in September 2022.
- However, there was a slight decline in the ratio in the following periods, reaching 4.20 in December 2024.
- The upward trend between March 2020 and September 2023 indicates a more efficient use of fixed assets to generate sales, but the recent decrease in the ratio may suggest a potential inefficiency in asset utilization.
2. Total Asset Turnover:
- Simpson's total asset turnover ratio has also fluctuated, with values ranging from 0.75 in March 2022 to 1.06 in December 2021.
- There was a significant drop in the ratio from 1.03 in March 2021 to 0.75 in March 2022, indicating a decrease in asset utilization efficiency.
- The ratio slightly recovered by December 2022 but remained below the levels seen in 2020 and 2021.
- From March 2023 onwards, the total asset turnover ratio fluctuated around 0.79 to 0.82, suggesting relatively stable asset utilization levels during this period.
In conclusion, while Simpson Manufacturing Company Inc's fixed asset turnover ratio generally improved over the years, the total asset turnover ratio showed more variability and some signs of inefficiency. The company may need to focus on optimizing its asset utilization to enhance overall operational efficiency and financial performance.