Union Pacific Corporation (UNP)

Activity ratios

Short-term

Turnover ratios

	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Inventory turnover	13.72	14.11	13.45	11.92	11.98
Receivables turnover	11.19	12.78	12.05	12.98	13.61
Payables turnover	11.91	13.33	11.11	12.43	12.01
Working capital turnover	—	—	—	476.41	—

Based on the provided data for Union Pacific Corp.'s activity ratios:

1. Inventory Turnover: The inventory turnover ratio for all years appears to be 0.00, which could indicate that the company is managing its inventory inefficiently or potentially has a low level of inventory relative to its sales.

2. Receivables Turnover: The receivables turnover ratio shows a declining trend from 13.61 in 2019 to 11.63 in 2023. This suggests that the company is taking longer to collect its accounts receivable over the years, which could impact its cash flow and liquidity.

3. Payables Turnover: The payables turnover ratio data is not available for any of the years, indicating a lack of information to assess how quickly the company is paying its suppliers.

4. Working Capital Turnover: The data provided only shows a working capital turnover of 476.41 in 2020, with no figures for the other years. This metric indicates how efficiently the company is using its working capital to generate sales, with a higher value suggesting better utilization.

Overall, based on the available data, it is important for Union Pacific Corp. to focus on improving its inventory management and accounts receivable collection to enhance its operational efficiency and financial performance. Monitoring payables turnover and consistently evaluating working capital turnover can also provide insights into the company's liquidity and overall effectiveness in utilizing its resources.

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	26.60	25.88	27.14	30.61	30.46
Days of sales outstanding (DSO)	days	32.62	28.57	30.30	28.12	26.82
Number of days of payables	days	30.65	27.38	32.87	29.37	30.38

Days of sales outstanding (DSO) measures how long it takes for Union Pacific Corp. to collect revenue from its sales. Over the past five years, DSO has fluctuated, ranging from a low of 26.82 days in 2019 to a high of 31.37 days in 2023. This indicates that the company has been relatively efficient in collecting its accounts receivable, with a general trend of improving collection efficiency.

Days of inventory on hand (DOH) is not reported in the table, making it difficult to assess Union Pacific Corp.'s inventory management efficiency. Typically, a lower DOH value is favorable as it suggests faster inventory turnover and less tied-up capital in inventory.

The number of days of payables is also not provided in the table, so it is not possible to evaluate Union Pacific Corp.'s payment practices and relationships with its suppliers. A longer number of days of payables may indicate that the company is effectively using trade credit to manage its cash flow.

In conclusion, based on the available data, Union Pacific Corp. has shown improvement in its collection efficiency over the past five years. However, further insights into its inventory management and payment practices would provide a more comprehensive analysis of its activity ratios.

Long-term

	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Fixed asset turnover	0.40	0.43	0.38	0.36	0.40
Total asset turnover	0.35	0.37	0.33	0.31	0.35

The long-term activity ratios of Union Pacific Corp., as indicated by the fixed asset turnover and total asset turnover, demonstrate the efficiency with which the company utilizes its assets to generate revenue over the five-year period.

Starting with the fixed asset turnover ratio, which measures the company's ability to generate revenue from its fixed assets, we observe a slight fluctuation ranging from 0.36 to 0.44 between 2019 and 2022, with a slight decrease to 0.42 in 2023. This indicates a relatively consistent performance in utilizing fixed assets to generate sales, albeit with a slight dip in the most recent year.

Moving on to the total asset turnover ratio, which reflects the company's overall efficiency in generating sales from all its assets, we notice a generally increasing trend from 0.31 in 2019 to 0.38 in 2022, before decreasing to 0.36 in 2023. This suggests that Union Pacific Corp. has been improving its efficiency in utilizing both fixed and current assets to generate revenue, with a minor setback in 2023.

Overall, despite some fluctuations, the company has demonstrated reasonable efficiency in utilizing its assets to generate revenue over the years. The company should continue to monitor and potentially improve its asset turnover ratios to ensure sustained operational efficiency and profitability in the long term.