Smurfit WestRock plc (SW)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|
| Inventory turnover | 7.22 | 7.05 | 6.64 | 7.21 |
| Receivables turnover | — | — | — | — |
| Payables turnover | — | — | — | — |
| Working capital turnover | 8.13 | 8.65 | 8.04 | 8.30 |
Inventory turnover for Smurfit WestRock plc has shown a consistent trend of improvement over the past four years, increasing from 6.64 in 2021 to 7.22 in 2023. This indicates that the company is managing its inventory efficiently, as it takes fewer days to sell its inventory.
As data for receivables turnover and payables turnover are not available, a comprehensive analysis of the efficiency of the company's accounts receivable and accounts payable management cannot be provided.
The working capital turnover ratio for Smurfit WestRock plc has been relatively stable over the past four years, with a slight decline from 8.65 in 2022 to 8.13 in 2023. This ratio measures how effectively the company is utilizing its working capital to generate revenue. A higher working capital turnover ratio suggests better efficiency in using its resources to generate sales. Therefore, the company has been efficient in utilizing its working capital to generate revenue, despite a slight decrease in the turnover ratio in 2023.
Overall, based on the available data, Smurfit WestRock plc appears to be managing its inventory efficiently and utilizing its working capital effectively to generate revenue. However, a more comprehensive analysis would require additional data on receivables and payables turnover ratios.
Average number of days
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 50.52 | 51.76 | 54.95 | 50.59 |
| Days of sales outstanding (DSO) | days | — | — | — | — |
| Number of days of payables | days | — | — | — | — |
In reviewing the activity ratios of Smurfit WestRock plc over the past four years, we can observe the following trends:
1. Days of Inventory on Hand (DOH):
- The days of inventory on hand have shown a fluctuating trend over the four-year period. In 2023, the DOH decreased to 50.52 days from 51.76 days in the previous year. This indicates that the company is managing its inventory more efficiently in the most recent year.
- Comparing the results to 2020, the DOH has remained relatively stable, with a slight decrease, suggesting that Smurfit WestRock plc has been able to maintain a consistent level of inventory management efficiency.
2. Days of Sales Outstanding (DSO):
- Unfortunately, the data for Days of Sales Outstanding (DSO) is not provided, which makes it challenging to assess the efficiency of the company in collecting its accounts receivable.
- Without the DSO figures, it is unclear how long it takes for the company to collect revenue from its credit sales.
3. Number of Days of Payables:
- Similar to the DSO, information on the Number of Days of Payables is also missing from the table, leading to a lack of visibility into the company's payment practices and relationships with suppliers.
- The absence of data on payables turnover makes it difficult to gauge how effectively Smurfit WestRock plc manages its accounts payable and cash flow through payment terms with suppliers.
In conclusion, while the days of inventory on hand provide some insight into Smurfit WestRock plc's inventory management efficiency, the absence of data on days of sales outstanding and number of days of payables limits a comprehensive analysis of the company's overall activity ratios. It is recommended that additional information be provided to gain a more thorough understanding of the company's working capital management and operational performance.
Long-term
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|
| Fixed asset turnover | — | — | — | — |
| Total asset turnover | 0.89 | 1.03 | 0.86 | 0.83 |
The fixed asset turnover ratio for Smurfit WestRock plc is not available in the provided data.
The total asset turnover ratio, on the other hand, shows how efficiently the company is utilizing its total assets to generate sales. A higher ratio indicates better asset utilization efficiency.
Smurfit WestRock's total asset turnover ratio has fluctuated over the past four years, decreasing from 1.03 in 2022 to 0.89 in 2023. This decline suggests that the company generated less revenue relative to its total assets in 2023 compared to the previous year. However, it is still above 1, indicating that the company is generating more than a dollar of sales for each dollar of assets owned.
The comparison of the total asset turnover ratio with industry averages or competitors would provide more context to evaluate Smurfit WestRock's efficiency in asset utilization and how it fares in comparison to its peers. Further analysis and additional information would be needed to fully assess the company's long-term activity efficiency.