United Rentals Inc (URI)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Inventory turnover | 45.98 | 41.56 | 28.65 | 35.75 | 42.78 |
| Receivables turnover | 6.51 | 6.43 | 5.81 | 5.79 | 6.49 |
| Payables turnover | 12.29 | 9.41 | 5.83 | 7.19 | 11.47 |
| Working capital turnover | — | — | 41.88 | — | 67.17 |
United Rentals Inc's inventory turnover has shown a declining trend over the past few years, decreasing from 42.78 in 2020 to 28.65 in 2022 before increasing to 45.98 in 2024. This suggests that the company is taking longer to sell its inventory, which may indicate inefficiencies in managing inventory levels or potential issues with demand for their products.
The receivables turnover ratio has also experienced a slight decline from 6.49 in 2020 to 5.79 in 2021, before stabilizing around 6.43 to 6.51 from 2023 to 2024. This indicates that the company is collecting its receivables slightly slower over the years, which could potentially impact its cash flow and liquidity position.
On the other hand, the payables turnover ratio has shown some volatility but generally improved from 11.47 in 2020 to 12.29 in 2024. This suggests that United Rentals Inc has been paying its suppliers more efficiently, which can positively impact its working capital management and cash flow.
The working capital turnover ratio, however, lacks data for 2021, 2023, and 2024, making it difficult to draw a conclusive trend. In 2020, the ratio was 67.17, which indicates that the company generated $67.17 in revenue for every dollar of working capital employed. The subsequent data gaps for this ratio make it challenging to assess the company's efficiency in utilizing its working capital.
Overall, United Rentals Inc should focus on improving its inventory turnover and receivables turnover ratios to enhance operational efficiency and cash flow management, while maintaining its positive trend in payables turnover for continued improvement in working capital management.
Average number of days
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 7.94 | 8.78 | 12.74 | 10.21 | 8.53 |
| Days of sales outstanding (DSO) | days | 56.06 | 56.79 | 62.83 | 63.00 | 56.27 |
| Number of days of payables | days | 29.69 | 38.78 | 62.55 | 50.80 | 31.81 |
United Rentals Inc's Days of Inventory on Hand (DOH) has shown a fluctuating trend over the past five years, ranging from a low of 7.94 days on December 31, 2024, to a high of 12.74 days on December 31, 2022. This indicates that the company has varied in its efficiency in managing its inventory levels during this period.
In terms of Days of Sales Outstanding (DSO), United Rentals Inc has experienced relatively stable figures, with the metric hovering around the 56 to 63-day range over the five-year period. This suggests that the company has maintained a consistent collection process for its accounts receivable, with little significant deviation in the average time taken to collect payments from customers.
Regarding the Number of Days of Payables, there has been a noticeable increase in the time it takes for United Rentals Inc to pay its suppliers since December 31, 2020. The metric rose from 31.81 days in 2020 to a peak of 62.55 days on December 31, 2022, before declining slightly to 29.69 days by the end of 2024. This indicates that the company may have shifted towards a strategy of extending payment terms with its creditors during the period under review.
Overall, the analysis of United Rentals Inc's activity ratios reveals varied performance in inventory management, consistent collection practices, and a changing approach to managing payables over the five-year period.
See also:
Long-term
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Fixed asset turnover | — | — | 0.78 | 6.96 | 6.60 |
| Total asset turnover | 0.54 | 0.56 | 0.48 | 0.48 | 0.48 |
Based on the provided data for United Rentals Inc, let's analyze the long-term activity ratios of the company:
1. Fixed Asset Turnover:
- In 2020, the fixed asset turnover ratio was 6.60, indicating that United Rentals generated $6.60 in sales for every dollar invested in fixed assets.
- The ratio improved to 6.96 in 2021, suggesting more efficient utilization of fixed assets to generate revenue.
- However, there was a significant decrease in the fixed asset turnover ratio to 0.78 in 2022, which may raise concerns about the company's efficiency in utilizing its fixed assets to generate sales.
- No data is available for 2023 and 2024, making it difficult to assess the trend in fixed asset turnover for those years.
2. Total Asset Turnover:
- The total asset turnover ratio remained consistent at 0.48 in 2020, 2021, and 2022, indicating that United Rentals generated $0.48 in sales for every dollar invested in total assets during those years.
- There was a slight improvement in the total asset turnover ratio to 0.56 in 2023, which suggests a more effective utilization of total assets to drive revenue.
- In 2024, the total asset turnover ratio decreased to 0.54, indicating a slight dip in the company's efficiency in generating sales relative to its total assets compared to the previous year.
Overall, the fixed asset turnover ratio for United Rentals exhibited fluctuations over the years, with a notable decrease in 2022. On the other hand, the total asset turnover ratio showed more stability, with slight improvements or dips in different years. It is important for the company to closely monitor these ratios to ensure efficient utilization of assets in generating revenue and sustaining long-term profitability.