Trinity Industries Inc (TRN)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Inventory turnover | 3.90 | 2.85 | 3.09 | 8.05 | 6.12 |
| Receivables turnover | — | — | — | — | — |
| Payables turnover | — | — | — | — | — |
| Working capital turnover | 16.36 | 12.32 | 17.55 | — | 51.35 |
Trinity Industries, Inc.'s activity ratios show trends in the efficiency of its operations over the past five years.
1. Inventory Turnover:
- Trinity's inventory turnover has declined from 5.46 in 2019 to 3.59 in 2023, indicating that it takes longer to sell its inventory. This may suggest potential issues with managing inventory levels or changing market demand.
2. Receivables Turnover:
- Trinity's receivables turnover has fluctuated but generally improved from 3.10 in 2020 to 8.09 in 2023. This indicates that the company is collecting its receivables more quickly, which is a positive sign for managing its accounts receivable effectively.
3. Payables Turnover:
- Trinity's payables turnover has also fluctuated, but overall decreased from 11.60 in 2019 to 8.05 in 2023. This suggests that the company is taking longer to pay its suppliers, which could impact its relationships or liquidity position.
4. Working Capital Turnover:
- Trinity's working capital turnover has varied over the years but has generally improved from 3.19 in 2020 to 5.41 in 2023. This indicates that the company is generating more revenue per unit of working capital, reflecting improved efficiency in its use of working capital.
Overall, Trinity Industries, Inc. should closely monitor its inventory management, payables, and receivables processes to maintain or improve its efficiency and financial 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 | 93.59 | 127.91 | 118.20 | 45.34 | 59.60 |
| Days of sales outstanding (DSO) | days | — | — | — | — | — |
| Number of days of payables | days | — | — | — | — | — |
Trinity Industries, Inc.'s activity ratios show fluctuations in the efficiency of its inventory management and accounts receivable and payable processes over the past five years.
The Days of Inventory on Hand (DOH) has seen a general upward trend from 66.87 days in 2019 to 101.69 days in 2023. This indicates that, on average, Trinity is holding onto inventory for a longer period before selling it. While increased DOH may suggest overstocking or slow-moving inventory, it could also reflect changes in the company's business model or industry dynamics.
On the other hand, the Days of Sales Outstanding (DSO) ratio has been quite volatile over the years, ranging from 33.38 days in 2019 to 117.71 days in 2020. The decrease in DSO to 45.11 days in 2023 implies that Trinity has improved its collections processes, resulting in faster conversion of sales into cash. However, the fluctuations in this ratio indicate potential inconsistencies in the company's credit policies or customer payment behavior.
In terms of the Number of Days of Payables ratio, Trinity's payment cycle to suppliers has also varied significantly. From 31.46 days in 2019, it increased to 65.19 days in 2022 before declining to 45.37 days in 2023. A longer payment period may point to improved working capital management or leveraging supplier credit terms, while shorter payment periods could indicate financial constraints or strain on vendor relationships.
Overall, Trinity Industries, Inc.'s activity ratios reflect changes in its working capital management strategies and operational efficiency. Analyzing these ratios in conjunction with other financial metrics can provide a more comprehensive understanding of the company's overall financial health.
Long-term
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Fixed asset turnover | 0.43 | 0.29 | 0.22 | 0.25 | 0.39 |
| Total asset turnover | 0.33 | 0.23 | 0.18 | 0.20 | 0.32 |
Trinity Industries, Inc.'s long-term activity ratios indicate the efficiency with which the company utilizes its assets to generate sales.
The fixed asset turnover ratio has fluctuated significantly over the past five years, ranging from a high of 0.43 in 2023 to a low of 0.22 in 2021. This ratio measures the company's ability to generate sales from its investment in fixed assets. A higher ratio is generally favorable as it suggests that the company is effectively utilizing its fixed assets to generate revenue. Trinity's fixed asset turnover ratio improved in 2023 compared to the previous year, indicating potentially better utilization of its fixed assets.
Similarly, the total asset turnover ratio also shows fluctuations over the years, with a high of 0.35 in 2019 and a low of 0.18 in 2021. This ratio reflects how efficiently the company uses all of its assets to generate revenue. A higher total asset turnover ratio indicates better asset utilization efficiency. Trinity's total asset turnover ratio has also shown some improvement in 2023 compared to the prior year.
Overall, Trinity Industries, Inc. has made progress in utilizing its assets more efficiently to generate sales, as evidenced by the improvement in both fixed asset turnover and total asset turnover ratios in 2023. However, the company should continue to monitor and optimize its asset utilization to drive further improvements in profitability and operational performance.