Smurfit WestRock plc (SW)

Short-term

Turnover ratios

The analysis of Smurfit WestRock plc's activity ratios reveals the following insights:

1. Inventory Turnover:
- The inventory turnover ratio measures how efficiently a company is managing its inventory. Smurfit WestRock's inventory turnover has been somewhat consistent over the years, ranging from 6.64 to 7.22. This indicates that the company is able to sell and replenish its inventory at a steady pace, with a slight decrease in 2021 followed by a gradual increase.

2. Receivables Turnover:
- The receivables turnover ratio assesses how quickly a company collects its accounts receivable. In this case, the data provided shows that the company's receivables turnover is not available for any of the years, indicating that there is no information on how efficiently Smurfit WestRock is collecting payments from its customers.

3. Payables Turnover:
- The payables turnover ratio helps to evaluate how rapidly a company pays its suppliers. Similar to receivables turnover, there is no data available for Smurfit WestRock's payables turnover for the years provided. This makes it difficult to assess the company's efficiency in managing its payables.

4. Working Capital Turnover:
- The working capital turnover ratio measures how effectively a company is utilizing its working capital to generate sales. Smurfit WestRock's working capital turnover ratios have ranged from 8.04 to 8.65, indicating that the company is able to generate sales relative to its working capital base. The slight fluctuations in this ratio suggest some variability in the company's working capital efficiency over the years.

Overall, while the data indicates a consistent inventory turnover and working capital turnover for Smurfit WestRock plc, the lack of information on receivables and payables turnover ratios limits a comprehensive assessment of the company's efficiency in managing its receivables and payables.

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Average number of days

Days of Inventory on Hand (DOH) Analysis:

- Smurfit WestRock plc's days of inventory on hand have seen fluctuations over the years. It increased from 50.59 days in 2020 to 54.95 days in 2021, then decreased to 51.76 days in 2022, followed by a slight decrease to 50.52 days in 2023. However, there is no data available for 2024.

- A higher DOH indicates that the company is holding more inventory, which may tie up working capital and increase storage costs. Therefore, the decreasing trend from 2021 to 2023 could indicate efficient inventory management.

Days of Sales Outstanding (DSO) Analysis:

- Data for Smurfit WestRock's days of sales outstanding is unavailable for the years provided, implying that detailed analysis of the company's accounts receivable turnover is not possible.

- DSO measures how long it takes for a company to collect its accounts receivable. A lower DSO is generally preferred as it indicates quicker cash conversion from sales.

Number of Days of Payables Analysis:

- Similar to DSO, there is no data available for Smurfit WestRock's number of days of payables for the years provided.

- The number of days of payables measures how long a company takes to pay its suppliers. A higher number of days could indicate that the company is able to leverage its payables effectively to manage cash flow.

Overall, based on the information provided, it seems that Smurfit WestRock plc has managed its inventory efficiently, but more data is needed to assess its accounts receivable and accounts payable processes effectively.

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Long-term

Smurfit WestRock plc's fixed asset turnover ratio, which indicates how efficiently the company utilizes its fixed assets to generate revenue, remained constant at an indeterminable level from 2020 to 2024. This may suggest that the company's fixed assets were not actively contributing to revenue generation during this period.

On the other hand, the total asset turnover ratio, a measure of how efficiently the company utilizes its total assets to generate revenue, showed fluctuation over the years. The ratio increased from 0.83 in 2020 to 1.03 in 2022, indicating an improvement in asset utilization efficiency. However, it then decreased to 0.89 in 2023, suggesting a potential decrease in the company's ability to generate revenue from its total assets.

Overall, the analysis of the long-term activity ratios implies that Smurfit WestRock plc may need to reassess its utilization of both fixed and total assets to enhance efficiency in revenue generation and maximize shareholder value in the future.