Triumph Group Inc (TGI)

Short-term

Turnover ratios

Inventory turnover measures how efficiently a company manages its inventory by showing how many times its inventory is sold and replaced over a period. In the case of Triumph Group Inc, the inventory turnover has been fluctuating over the past five years, ranging from 2.74 in 2024 to 5.09 in 2020. A decreasing trend in inventory turnover could indicate inefficiencies in inventory management or a build-up of excess inventory that needs to be addressed.

Receivables turnover reflects how effectively a company collects cash from its credit sales. Triumph Group has shown a general increasing trend in receivables turnover over the past five years, with values ranging from 7.24 in 2023 to 9.63 in 2021. This suggests that the company has been improving its collection process and is converting its accounts receivable into cash at a faster rate.

Payables turnover measures how quickly a company pays its suppliers. Triumph Group Inc's payables turnover has varied over the years, with values ranging from 4.67 in 2023 to 8.23 in 2021. A higher payables turnover ratio indicates that the company is taking longer to pay its suppliers, which could potentially strain supplier relationships but also free up cash for other uses.

Working capital turnover indicates how efficiently a company utilizes its working capital to generate sales. Triumph Group Inc has seen fluctuations in its working capital turnover, with values ranging from 2.04 in 2024 to 5.05 in 2020. A decreasing trend in working capital turnover could suggest inefficiencies in working capital management or underutilization of available resources.

Overall, analyzing these activity ratios provides insights into Triumph Group Inc's operational efficiency and effectiveness in managing its inventory, receivables, payables, and working capital. Identifying trends and fluctuations in these ratios can help identify areas for improvement and optimize the company's working capital management.

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Average number of days

To analyze Triumph Group Inc's activity ratios, we will look at its Days of Inventory on Hand (DOH), Days of Sales Outstanding (DSO), and Number of Days of Payables for the five most recent fiscal years.

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.
- Triumph Group Inc's DOH has been fluctuating over the past five years, ranging from 71.66 days in 2020 to 139.30 days in 2023.
- A higher DOH could suggest slow inventory turnover or overstocking, while a lower DOH may indicate efficient inventory management.

2. Days of Sales Outstanding (DSO):
- DSO represents the average number of days it takes for the company to collect payment from its customers.
- Triumph Group Inc's DSO has varied from 37.88 days in 2021 to 50.40 days in 2023.
- A decreasing DSO indicates better receivables management, while an increasing DSO could signal potential collection issues or credit policy concerns.

3. Number of Days of Payables:
- This ratio reflects how long the company takes to pay its suppliers.
- Triumph Group Inc's number of days of payables has ranged from 44.37 days in 2021 to 78.23 days in 2023.
- A longer payment period may benefit cash flow but could strain supplier relationships, while a shorter period may imply prompt payment practices.

Overall, analyzing these activity ratios provides insights into Triumph Group Inc's efficiency in managing its inventory, receivables, and payables. Monitoring these ratios over time can help evaluate the company's operational performance and liquidity position.

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Long-term

The fixed asset turnover ratio for Triumph Group Inc has been relatively stable over the past five years, ranging from 6.94 to 8.85, indicating that the company is efficiently utilizing its fixed assets to generate sales revenue. This consistency suggests that the company has been able to maintain a consistent level of production and sales efficiency over time.

On the other hand, the total asset turnover ratio has shown more variability, fluctuating between 0.66 and 0.97. This suggests that Triumph Group Inc's ability to generate sales revenue from its total assets has been less stable compared to its fixed assets. However, despite the fluctuations, the company's total asset turnover ratios are within a reasonable range for a manufacturing company.

Overall, the analysis of Triumph Group Inc's long-term activity ratios indicates that the company has been effectively utilizing its fixed assets to drive sales revenue, while also demonstrating a reasonable level of efficiency in generating sales relative to its total assets.