Werner Enterprises Inc (WERN)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Inventory turnover | 124.11 | 155.45 | 163.86 | 111.83 | 155.48 |
| Receivables turnover | 7.34 | 6.31 | 5.89 | 6.88 | 7.50 |
| Payables turnover | 16.50 | 18.14 | 19.42 | 16.20 | 15.19 |
| Working capital turnover | 10.80 | 7.26 | 7.54 | 12.97 | 15.64 |
Based on the activity ratios provided for Werner Enterprises, Inc., we can analyze the company's efficiency in managing its resources and operations.
1. Inventory Turnover: The inventory turnover ratio for each year is reported as 0.00. This suggests that Werner Enterprises may operate with a lean inventory management strategy, with little to no inventory turnover during the specified periods.
2. Receivables Turnover: The receivables turnover ratio for Werner Enterprises shows a consistent trend of improvement over the five-year period. The ratio indicates how efficiently the company collects outstanding receivables from customers. An increase in this ratio implies that the company is collecting its receivables more rapidly each year.
3. Payables Turnover: The payables turnover ratio data is not provided, indicating that we are missing information on how quickly Werner Enterprises pays its suppliers. Further analysis including payables turnover could provide insights into the company's relationships with its vendors and liquidity management.
4. Working Capital Turnover: The working capital turnover ratio measures how effectively a company utilizes its working capital to generate revenue. Werner Enterprises has shown fluctuations in this ratio over the period, with a general decreasing trend. A higher turnover ratio signifies that the company is efficient in using its working capital to generate sales.
Overall, while the company demonstrates efficiency in collecting receivables and utilizing working capital, the lack of information on inventory and payables turnover limits a comprehensive assessment of Werner Enterprises' activity ratios. Analysis of additional ratios and comparison with industry benchmarks would provide further insight into the company's operational 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 | 2.94 | 2.35 | 2.23 | 3.26 | 2.35 |
| Days of sales outstanding (DSO) | days | 49.71 | 57.86 | 61.92 | 53.07 | 48.67 |
| Number of days of payables | days | 22.12 | 20.12 | 18.79 | 22.53 | 24.04 |
To analyze Werner Enterprises, Inc.'s activity ratios, we will focus on the Days of Sales Outstanding (DSO) metric over the five-year period provided. DSO indicates the average number of days it takes for a company to collect its accounts receivable.
1. DSO Trend: The trend in Werner Enterprises' DSO over the five years shows some fluctuations. In 2023, the DSO decreased to 52.29 days from 60.87 days in 2022. This could indicate an improvement in the company's accounts receivable collection efficiency.
2. Comparison to Industry or Sector: Without industry or sector benchmarks, it is challenging to assess Werner Enterprises' DSO performance relative to its peers. However, generally lower DSO values are considered favorable as they signify quicker collection of receivables, leading to improved cash flow.
3. Impact on Working Capital: A decreasing DSO, as observed in Werner Enterprises' case from 2022 to 2023, can positively impact the company's working capital management. Quicker collection of receivables can free up cash for other operational needs or investments.
4. Seasonal Variations: Any seasonality in Werner Enterprises' business could influence DSO fluctuations. For instance, if collections are faster in certain quarters due to high demand periods, it may result in lower DSO values during those periods.
5. Changes in Credit Policies: A decrease in DSO could also be attributed to changes in credit policies, such as offering discounts for early payment or tightening credit terms for customers, which encourage timely payments.
Overall, the improvement in Werner Enterprises' DSO from 2022 to 2023 suggests enhanced efficiency in collecting accounts receivable, potentially benefiting the company's liquidity and working capital position. Monitoring this trend over time can provide insights into the effectiveness of the company's credit and collection policies.
Long-term
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Fixed asset turnover | 1.66 | 1.80 | 1.69 | 1.54 | 1.61 |
| Total asset turnover | 1.04 | 1.06 | 1.05 | 1.10 | 1.15 |
The fixed asset turnover ratio for Werner Enterprises, Inc. has demonstrated a slight fluctuation over the past five years, with values ranging from 1.54 to 1.80. This ratio indicates that the company generated $1.54 to $1.80 in revenue for every dollar invested in fixed assets. A higher fixed asset turnover ratio is generally preferred as it signifies better efficiency in utilizing fixed assets to generate sales.
On the other hand, the total asset turnover ratio for Werner Enterprises, Inc. has shown a declining trend over the same period, decreasing from 1.15 in 2019 to 1.04 in 2023. This ratio reflects the company's ability to generate revenue in relation to its total assets. A decreasing total asset turnover ratio could imply that the company is becoming less efficient in utilizing its total assets to generate sales.
When comparing the fixed asset turnover ratio to the total asset turnover ratio, it is evident that the company is more efficient in utilizing its fixed assets to generate revenue than its total assets. This could indicate that the company may have excess or underutilized total assets that are not contributing proportionally to revenue generation.
In conclusion, Werner Enterprises, Inc. should focus on improving the efficiency of its total asset utilization to generate revenue in order to enhance overall performance and profitability.