T-Mobile US Inc (TMUS)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Inventory turnover | 14.60 | 14.06 | 9.05 | 9.18 | 15.74 |
| Receivables turnover | 8.47 | 8.20 | 8.48 | 8.17 | 9.53 |
| Payables turnover | 4.40 | 3.67 | 3.57 | 4.17 | 3.51 |
| Working capital turnover | — | — | — | 29.41 | — |
Inventory turnover measures how efficiently a company manages its inventory by showing how many times inventory is sold and replaced within a period. T-Mobile US Inc's inventory turnover has fluctuated over the past five years, with a high of 19.22 in 2022 and a low of 11.19 in 2020. The decreasing trend from 2019 to 2021 followed by an increase in 2022 suggests varying levels of inventory management efficiency.
Receivables turnover indicates how effectively a company collects its accounts receivable. T-Mobile US Inc's receivables turnover has remained relatively stable around 8 to 9 times per year over the past five years, indicating a consistent collection cycle. This suggests the company maintains a healthy balance between credit sales and collection efforts.
Payables turnover measures how quickly a company pays its suppliers. T-Mobile's payables turnover has shown a general increasing trend over the years, indicating that the company is taking longer to pay its suppliers. A higher payables turnover can suggest either better negotiation terms with suppliers or potential liquidity challenges.
Working capital turnover, not available for all years, assesses how efficiently a company utilizes its working capital to generate revenue. The data suggests a significant shift in 2020 with a working capital turnover of 31.35, emphasizing a substantial increase in revenue generated per dollar of working capital. This metric reflects the operational efficiency and productivity of the company in that specific year.
Overall, T-Mobile US Inc demonstrates varying levels of efficiency in managing its inventory, collecting receivables, and paying suppliers, with each ratio providing insights into different aspects of the company's operational performance.
Average number of days
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 24.99 | 25.96 | 40.35 | 39.74 | 23.19 |
| Days of sales outstanding (DSO) | days | 43.10 | 44.54 | 43.04 | 44.67 | 38.28 |
| Number of days of payables | days | 83.01 | 99.39 | 102.15 | 87.50 | 103.95 |
The activity ratios of T-Mobile US Inc indicate how efficiently the company is managing its operations related to inventory, receivables, and payables.
1. Days of Inventory on Hand (DOH):
- The trend in DOH shows that T-Mobile has been able to reduce the number of days it holds inventory from 32.63 days in 2020 to 20.29 days in 2023.
- This decrease suggests that T-Mobile has been more efficient in managing its inventory levels, possibly through better inventory control and demand forecasting.
2. Days of Sales Outstanding (DSO):
- The DSO indicates the average number of days it takes for T-Mobile to collect payments from its customers.
- The trend in DSO has fluctuated over the years, with a slight increase from 36.57 days in 2019 to 42.50 days in 2023.
- This increase may signal a potential slowdown in collecting receivables, which could impact the company's cash flow.
3. Number of Days of Payables:
- The trend in the number of days of payables reflects the average number of days T-Mobile takes to pay its suppliers.
- T-Mobile has been effectively managing its payables, as the number of days has decreased from 85.18 days in 2019 to 67.38 days in 2023.
- A lower number of days of payables suggests that T-Mobile is settling its obligations to suppliers more quickly, which can strengthen its relationships with vendors.
Overall, T-Mobile US Inc has made improvements in managing its inventory and payables, but there may be a need to closely monitor the collection of receivables to ensure a healthy cash flow position in the future.
See also:
T-Mobile US Inc Short-term (Operating) Activity Ratios
Long-term
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Fixed asset turnover | 1.92 | 1.86 | 1.91 | 1.56 | 1.96 |
| Total asset turnover | 0.37 | 0.37 | 0.37 | 0.32 | 0.49 |
The long-term activity ratios for T-Mobile US Inc indicate the efficiency of the company in utilizing its fixed assets and total assets to generate revenue over the past five years.
Fixed asset turnover has ranged from 1.66 to 2.05 during this period, with a peak in 2019. This ratio signifies that for every dollar invested in fixed assets, T-Mobile US Inc is generating approximately $1.66 to $2.05 in revenue. The consistent values above 1 suggest that the company is effectively utilizing its fixed assets to generate sales.
Total asset turnover, on the other hand, has remained relatively stable, ranging from 0.34 to 0.52. This ratio indicates the company's ability to generate revenue in relation to its total assets. A total asset turnover below 1 suggests that T-Mobile US Inc has a lower level of asset utilization efficiency compared to fixed assets. The fluctuation in this ratio may indicate changes in the company's asset base or sales volume over the years.
Overall, while the fixed asset turnover indicates a strong performance in asset utilization, the total asset turnover reflects varying levels of efficiency in utilizing all assets to generate revenue. Monitoring these ratios over time can provide insights into the company's operational efficiency and performance in leveraging its asset base for revenue generation.