Titan International Inc (TWI)

Short-term

Turnover ratios

The activity ratios of Titan International, Inc. indicate how efficiently the company is managing its assets and liabilities to generate sales.

1. Inventory Turnover:
The inventory turnover ratio shows how many times a company's inventory is sold and replaced over a period. Titan International's inventory turnover has been relatively stable, ranging between 4.13 and 4.61 over the past eight quarters. This consistency suggests that the company is effectively managing its inventory levels and is able to sell and replenish its inventory at a consistent rate.

2. Receivables Turnover:
The receivables turnover ratio reflects how efficiently a company is collecting its accounts receivable. Titan International's receivables turnover has shown some fluctuation, with values varying between 6.25 and 8.27 over the same period. Higher turnover values indicate that the company is collecting receivables more quickly, which is a positive sign of efficient cash flow management.

3. Payables Turnover:
The payables turnover ratio evaluates how efficiently a company is managing its accounts payable. Titan International's payables turnover has shown variability, ranging from 5.50 to 8.31 over the past eight quarters. A higher payables turnover ratio suggests that the company is paying its suppliers more quickly, which can be beneficial for maintaining good supplier relationships.

4. Working Capital Turnover:
The working capital turnover ratio measures how efficiently a company is utilizing its working capital to generate sales. Titan International's working capital turnover has been declining gradually from 5.00 to 3.61 over the last two years. A decreasing trend in this ratio may suggest potential inefficiencies in utilizing working capital to generate revenue, and further analysis may be needed to understand the reasons behind this decline.

Overall, the analysis of activity ratios indicates that Titan International, Inc. is effectively managing its inventory, receivables, and payables in different ways. The company demonstrates varying levels of efficiency in converting its assets and liabilities into sales, and trends in these ratios can provide insights into its operational effectiveness and financial health.

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Average number of days

The activity ratios of Titan International, Inc. provide insights into how efficiently the company manages its inventory, accounts receivable, and accounts payable.

1. Days of Inventory on Hand (DOH): Titan International's average days of inventory on hand have ranged from a low of 79.21 days in Q1 2023 to a high of 88.29 days in Q3 2022. This indicates that the company generally holds inventory for approximately 80 to 90 days before it is sold. The decreasing trend in recent quarters suggests that Titan International has been able to manage its inventory more efficiently.

2. Days of Sales Outstanding (DSO): The company's days of sales outstanding have fluctuated between 44.15 days in Q4 2023 and 58.43 days in Q1 2022. This metric reflects the average number of days it takes for Titan International to collect payment from its customers. The decreasing trend from Q1 2022 to Q4 2023 indicates an improvement in the company's collection process, resulting in quicker cash inflows from sales.

3. Number of Days of Payables: Titan International's number of days of payables range from 43.90 days in Q3 2023 to 66.42 days in Q1 2022. This ratio reflects how long the company takes to pay its suppliers and vendors. A longer days of payables period suggests that Titan International is holding onto its cash longer before paying its obligations. The decreasing trend since Q1 2022 indicates that the company has been paying its payables more promptly in recent quarters.

Overall, Titan International has shown improvements in managing its inventory, collecting receivables, and paying its payables efficiently over the quarters, which may positively impact its cash flow and overall financial health.

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Long-term

Titan International, Inc.'s long-term activity ratios, specifically the fixed asset turnover and total asset turnover, provide insights into the company's efficiency in generating sales relative to its long-term assets.

- Fixed asset turnover has shown a declining trend from Q1 2022 to Q4 2023, indicating that the company is generating fewer sales for each dollar invested in fixed assets. This could be a concern as it suggests that the company may not be utilizing its fixed assets efficiently to generate revenues.

- Total asset turnover has also experienced a decrease over the period, albeit less pronounced than fixed asset turnover. This ratio reflects the company's ability to generate sales in relation to its total assets. The declining trend indicates that Titan International, Inc. is becoming less effective in utilizing its total assets to generate revenue.

Overall, the declining trends in both fixed asset turnover and total asset turnover ratios may signal inefficiencies in the company's asset utilization or possible issues with sales generation. Further analysis and comparison with industry benchmarks would provide a clearer picture of Titan International, Inc.'s performance in this aspect.