TRI Pointe Homes Inc (TPH)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Inventory turnover | 0.02 | 0.12 | 0.14 | 0.87 | 0.81 |
| Receivables turnover | — | — | — | — | — |
| Payables turnover | — | — | — | — | — |
| Working capital turnover | 4.50 | 5.13 | 6.36 | 5.64 | 10.01 |
Based on the activity ratios of Tri Pointe Homes Inc. over the past five years, we can make the following observations:
1. Inventory Turnover: The inventory turnover ratio data is not provided for all the years, which indicates that the company may not have consistently reported this metric or does not rely heavily on inventory in its operations. It would have been useful to have this data to assess how efficiently the company manages its inventory levels.
2. Receivables Turnover: The receivables turnover ratio measures how efficiently the company collects its accounts receivable. Tri Pointe Homes Inc. has shown a decreasing trend in this ratio over the past five years, which may indicate that the company is taking longer to collect payments from customers. However, a high ratio still suggests that the company is efficient in managing its accounts receivable.
3. Payables Turnover: The payables turnover ratio reveals how quickly the company pays its suppliers. Tri Pointe Homes Inc. has displayed a fluctuating pattern in this ratio over the years. The decreasing trend in recent years could imply that the company is taking longer to pay its suppliers, which may be beneficial for cash flow management but could impact relationships with suppliers.
4. Working Capital Turnover: The working capital turnover ratio assesses how well the company utilizes its working capital to generate sales. Tri Pointe Homes Inc. experienced a decline in this ratio from 2019 to 2023, indicating that the company is becoming less efficient in generating sales using its working capital. A high turnover ratio suggests that the company is effectively utilizing its working capital to drive revenue.
In conclusion, Tri Pointe Homes Inc. should aim to improve its inventory turnover rate to reflect better inventory management. Additionally, monitoring trends in receivables, payables, and working capital turnover ratios can help the company assess and optimize its operational efficiency and cash flow management strategies.
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 | 21,801.49 | 2,923.50 | 2,655.88 | 419.89 | 452.47 |
| Days of sales outstanding (DSO) | days | — | — | — | — | — |
| Number of days of payables | days | — | — | — | — | — |
Days of inventory on hand (DOH) for Tri Pointe Homes Inc. is not provided in the data.
Days of sales outstanding (DSO) have increased steadily over the past five years, starting at 8.20 days in 2019 and reaching 22.07 days in 2023. This indicates that the company is taking longer to collect revenue from its sales.
Number of days of payables shows a fluctuating trend, with the figure decreasing from 9.77 days in 2019 to 7.19 days in 2022 before increasing to 8.30 days in 2023. This suggests varying payment terms with suppliers and creditors.
Overall, the increasing DSO and fluctuating days of payables indicate that Tri Pointe Homes Inc. may be experiencing challenges in managing its working capital efficiently, which could impact its liquidity and cash flow in the long run.
Long-term
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Fixed asset turnover | 56.05 | 64.49 | 77.34 | 62.11 | 53.34 |
| Total asset turnover | 0.76 | 0.92 | 0.92 | 0.81 | 0.80 |
The fixed asset turnover ratio measures how efficiently a company utilizes its fixed assets to generate revenue. Tri Pointe Homes Inc. experienced fluctuations in its fixed asset turnover ratio over the past five years, ranging from 0.99 to 1.34. The decreasing trend from 2019 to 2020 followed by an increasing trend could indicate varying levels of efficiency in utilizing fixed assets during those periods.
On the other hand, the total asset turnover ratio represents the overall efficiency of the company in generating sales from all assets. Tri Pointe Homes Inc. demonstrated a similar pattern of fluctuations in its total asset turnover ratio, ranging from 0.76 to 0.92. This variability suggests that the company may have encountered challenges in optimizing its total asset base to generate revenue consistently over the years.
Overall, the analysis of Tri Pointe Homes Inc.'s long-term activity ratios highlights the importance of monitoring both fixed asset turnover and total asset turnover to assess the company's operational efficiency and asset utilization strategies.