Valmont Industries Inc (VMI)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Inventory turnover | 6.04 | 6.13 | 4.42 | 4.50 | 6.01 |
| Receivables turnover | 6.22 | 6.26 | 7.19 | 6.05 | 5.58 |
| Payables turnover | 9.58 | 11.27 | 8.93 | 9.43 | 10.06 |
| Working capital turnover | 4.66 | 3.87 | 4.45 | 3.65 | 3.24 |
Valmont Industries Inc's inventory turnover ratio has shown some fluctuations over the past five years, ranging from 4.42 to 6.13. A higher inventory turnover ratio indicates that the company is selling its inventory more efficiently. While the ratio decreased slightly from 2020 to 2021, it remained relatively stable in the subsequent years.
The receivables turnover ratio of Valmont Industries Inc has generally been on an upward trend, increasing from 5.58 in 2020 to 6.22 in 2024. This indicates that the company is collecting its accounts receivables at a faster pace. A higher receivables turnover ratio is positive as it shows efficient management of credit sales.
The payables turnover ratio for Valmont Industries Inc has seen some variability, with a peak in 2023 at 11.27 and a low in 2022 at 8.93. This ratio measures how quickly the company pays its suppliers. A higher payables turnover ratio suggests that the company is paying its suppliers more quickly.
The working capital turnover ratio for Valmont Industries Inc has increased steadily over the five-year period, indicating that the company is generating revenue more efficiently relative to its working capital. A higher working capital turnover ratio implies better utilization of resources to generate sales.
Overall, these activity ratios provide insights into how efficiently Valmont Industries Inc is managing its inventory, receivables, payables, and working capital to generate sales and maintain liquidity.
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 | 60.44 | 59.50 | 82.63 | 81.09 | 60.77 |
| Days of sales outstanding (DSO) | days | 58.72 | 58.34 | 50.75 | 60.30 | 65.44 |
| Number of days of payables | days | 38.11 | 32.38 | 40.86 | 38.70 | 36.29 |
Valmont Industries Inc's Days of Inventory on Hand (DOH) has shown a fluctuating trend over the years, starting at 60.77 days in December 2020, increasing to 82.63 days in December 2022, and then dropping to 60.44 days by December 2024. This indicates that the company may have had some challenges managing its inventory efficiently.
The Days of Sales Outstanding (DSO) decreased from 65.44 days in December 2020 to 50.75 days in December 2022, suggesting an improvement in the company's ability to collect receivables efficiently. However, the DSO slightly increased to 58.72 days by December 2024, indicating a slowdown in the collection of sales.
The Number of Days of Payables increased from 36.29 days in December 2020 to 40.86 days in December 2022, before dropping to 38.11 days by December 2024. This indicates that the company took longer to pay its suppliers in 2022 but managed to reduce this duration by 2024.
Overall, the company's activity ratios suggest some challenges in managing inventory efficiently, improvements in collecting receivables, and fluctuations in the payment period to suppliers over the years.
Long-term
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Fixed asset turnover | 6.91 | 6.67 | 7.30 | 5.78 | 4.78 |
| Total asset turnover | 1.22 | 1.18 | 1.22 | 1.00 | 0.97 |
Based on the data provided for Valmont Industries Inc, let's analyze the long-term activity ratios:
1. Fixed Asset Turnover:
- The Fixed Asset Turnover ratio measures how effectively the company is generating sales from its investment in fixed assets.
- The trend of this ratio shows an increasing pattern over the years, from 4.78 in 2020 to 6.91 in 2024, indicating that Valmont Industries Inc is becoming more efficient in utilizing its fixed assets to generate revenue.
- The peak value of 7.30 in 2022 suggests that the company achieved significant growth in sales relative to its investment in fixed assets that year.
- A high Fixed Asset Turnover ratio generally indicates efficient utilization of fixed assets to drive sales.
2. Total Asset Turnover:
- The Total Asset Turnover ratio reflects how efficiently the company is utilizing all its assets to generate revenue.
- The ratio has shown an increasing trend from 0.97 in 2020 to 1.22 in 2024, indicating an improvement in the company's overall asset utilization efficiency.
- The values above 1 suggest that Valmont Industries Inc is generating more revenue relative to its total asset base in recent years.
- A higher Total Asset Turnover ratio implies that the company is effectively leveraging its assets to generate sales.
In summary, both the Fixed Asset Turnover and Total Asset Turnover ratios for Valmont Industries Inc have shown positive trends, indicating an improvement in asset utilization efficiency and revenue generation over the years. This suggests that the company is effectively managing its assets to drive sales growth and maximize returns.