T-Mobile US Inc (TMUS)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Inventory turnover | 15.06 | 14.60 | 14.06 | 9.05 | 9.18 |
| Receivables turnover | 9.27 | 8.47 | 8.20 | 8.48 | 8.17 |
| Payables turnover | 5.71 | 4.40 | 3.67 | 3.57 | 4.17 |
| Working capital turnover | — | — | — | — | 29.41 |
T-Mobile US Inc's activity ratios reflect the efficiency of the company in managing its operations related to inventory, receivables, payables, and working capital.
1. Inventory turnover: The inventory turnover ratio indicates how many times the company's inventory is sold and replaced over a period. T-Mobile's inventory turnover has shown a positive trend from 2020 to 2024, increasing from 9.18 to 15.06. This suggests that T-Mobile is efficiently managing its inventory, selling products quickly, and replenishing stock at a faster rate, which is a positive indicator of operational efficiency.
2. Receivables turnover: The receivables turnover ratio measures how effectively the company is collecting money owed by customers on credit sales. T-Mobile's receivables turnover has also increased over the period from 2020 to 2024, indicating an improvement in the collection of receivables. The ratio has shown a steady increase from 8.17 in 2020 to 9.27 in 2024, suggesting that T-Mobile is efficiently managing its credit sales and collecting payments in a timely manner.
3. Payables turnover: The payables turnover ratio reflects how quickly the company is paying its suppliers. T-Mobile's payables turnover has varied over the years, with fluctuations seen in the ratio. The ratio decreased from 4.17 in 2020 to 3.57 in 2021 but then increased steadily to 5.71 in 2024. This indicates that T-Mobile has been managing its payables effectively, with a higher turnover ratio in 2024 suggesting a quicker payment cycle to suppliers.
4. Working capital turnover: The working capital turnover ratio measures how effectively the company is utilizing its working capital to generate sales. The data provided show that working capital turnover was not available for the years 2021 to 2024. However, in 2020, T-Mobile had a working capital turnover of 29.41, indicating that the company generated $29.41 in sales for every dollar of working capital.
In conclusion, T-Mobile US Inc's activity ratios demonstrate positive trends in inventory turnover, receivables turnover, and payables turnover over the years, indicating efficiency in managing its operations related to inventory, sales collection, and payments to suppliers.
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 | 24.23 | 24.99 | 25.96 | 40.35 | 39.74 |
| Days of sales outstanding (DSO) | days | 39.39 | 43.10 | 44.54 | 43.04 | 44.67 |
| Number of days of payables | days | 63.97 | 83.01 | 99.39 | 102.15 | 87.50 |
T-Mobile US Inc's activity ratios provide insights into its efficiency in managing inventories, collecting receivables, and paying off its liabilities.
1. Days of Inventory on Hand (DOH):
- The trend in DOH shows a slight increase from 39.74 days in 2020 to 40.35 days in 2021, followed by a significant decrease to 24.23 days in 2024.
- A lower DOH indicates that T-Mobile is managing its inventory more efficiently, minimizing holding costs and potential obsolescence.
2. Days of Sales Outstanding (DSO):
- DSO remained relatively stable ranging from 43.04 to 44.54 days over the years.
- A stable or decreasing trend in DSO suggests that T-Mobile is effectively managing its accounts receivable, optimizing cash flow by promptly collecting payments from customers.
3. Number of Days of Payables:
- T-Mobile's payables periods fluctuated significantly, with a high of 102.15 days in 2021 and a low of 63.97 days in 2024.
- A shorter payables period can indicate strong bargaining power with suppliers, but it may also suggest potential cash flow challenges as the company is paying its obligations more quickly.
Overall, T-Mobile US Inc's activity ratios indicate improvements in inventory management efficiency and stable receivables turnover, with fluctuations in the payables period potentially affecting its cash flow position. Monitoring these ratios over time can help identify areas for operational improvement and financial health.
See also:
Long-term
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Fixed asset turnover | 2.08 | 1.92 | 1.86 | 1.91 | 1.56 |
| Total asset turnover | 0.39 | 0.37 | 0.37 | 0.37 | 0.32 |
T-Mobile US Inc's fixed asset turnover has shown a consistent improvement from 1.56 in 2020 to 2.08 in 2024. This ratio measures how effectively the company is generating revenue from its fixed assets over time. The increasing trend indicates that the company is utilizing its fixed assets more efficiently to generate sales.
In terms of total asset turnover, T-Mobile's performance has remained relatively stable, hovering around 0.37 to 0.39 from 2020 to 2024. This ratio reflects the company's ability to generate revenue based on its total assets. While the ratio is not fluctuating significantly, it suggests that T-Mobile is maintaining a consistent level of revenue generation in relation to its total asset base.
Overall, the improvement in fixed asset turnover coupled with the stable total asset turnover indicates that T-Mobile is effectively utilizing both its fixed assets and total assets to generate revenue, which is a positive sign of operational efficiency and effectiveness in the long term.