Cactus Inc (WHD)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Inventory turnover | 0.89 | 0.54 | 0.54 | 0.73 | 0.60 |
| Receivables turnover | 4.70 | 4.00 | 3.87 | 6.63 | 5.64 |
| Payables turnover | 2.24 | 1.60 | 1.28 | 2.63 | 1.51 |
| Working capital turnover | 2.87 | 1.29 | 1.03 | 0.93 | 1.95 |
Analyzing Cactus Inc's activity ratios over the last five years reveals some interesting trends.
1. Inventory turnover: This ratio indicates how efficiently the company manages its inventory levels. Cactus Inc's inventory turnover has fluctuated, with a significant improvement from 2022 to 2023. However, the ratio remains below 1, indicating that the company's inventory is turning over less than once a year on average.
2. Receivables turnover: This ratio measures how effectively the company is collecting on its credit sales. Cactus Inc has maintained a relatively stable receivables turnover ratio, showing a consistent ability to collect payments from customers promptly.
3. Payables turnover: The payables turnover ratio gives insight into how quickly the company pays its suppliers. Cactus Inc's payables turnover has also varied over the years, with a notable uptick in 2020 and 2023. This may imply changes in the company's payment policies or supplier relationships.
4. Working capital turnover: This ratio assesses how efficiently the company is utilizing its working capital to generate sales revenue. Cactus Inc's working capital turnover has generally improved over the years, indicating increasing efficiency in converting working capital into sales.
Overall, while Cactus Inc has seen fluctuations in its activity ratios, the company has demonstrated some improvements in managing its inventory, receivables, payables, and working capital efficiency over the past five years.
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 | 408.07 | 672.52 | 677.25 | 501.59 | 611.77 |
| Days of sales outstanding (DSO) | days | 77.69 | 91.28 | 94.40 | 55.07 | 64.72 |
| Number of days of payables | days | 162.84 | 228.23 | 284.81 | 138.77 | 241.86 |
The activity ratios of Cactus Inc provide insight into how efficiently the company manages its inventory, receivables, and payables over the past five years.
1. Days of inventory on hand (DOH):
- The days of inventory on hand have shown a decreasing trend from 672.52 days in 2022 to 408.07 days in 2023. This indicates that the company is managing its inventory more efficiently and is able to sell its products faster.
2. Days of sales outstanding (DSO):
- The days of sales outstanding have also decreased from 91.28 days in 2022 to 77.69 days in 2023. This implies that the company is collecting its accounts receivable more quickly, which is a positive sign for cash flow management.
3. Number of days of payables:
- The number of days of payables has fluctuated over the years, with a significant decrease from 284.81 days in 2021 to 162.84 days in 2023. A lower number of days of payables indicates that the company is paying its suppliers more quickly.
Overall, the trend in these activity ratios suggests that Cactus Inc has been improving its efficiency in managing inventory, receivables, and payables, leading to better working capital management and potentially improved profitability. However, further analysis and comparison with industry benchmarks would provide a more comprehensive evaluation of the company's performance.
Long-term
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Fixed asset turnover | 3.16 | 5.33 | 3.39 | 2.45 | 3.89 |
| Total asset turnover | 0.72 | 0.62 | 0.45 | 0.43 | 0.75 |
The fixed asset turnover ratio for Cactus Inc has shown fluctuations over the past five years. In 2023, the ratio decreased to 3.16 from 5.33 in 2022, indicating that the company generated $3.16 in sales for every $1 of fixed assets. This decrease may suggest potential inefficiencies in utilizing fixed assets to generate revenue. However, the ratio remains relatively high compared to the earlier years, indicating improved asset utilization efficiency.
On the other hand, the total asset turnover ratio has also varied significantly over the same period. In 2023, the ratio increased to 0.72 from 0.62 in 2022, showing that the company generated $0.72 in sales for every $1 of total assets. This increase suggests an improvement in the efficiency of utilizing total assets to generate revenue.
Overall, the company's performance in terms of asset turnover indicates a mix of fluctuations and improvements in asset utilization efficiency over the past five years. Monitoring these ratios closely will be crucial to assess the company's ability to effectively generate revenue from its assets in the long term.