Whirlpool Corporation (WHR)

Short-term

Turnover ratios

Based on the provided data for Whirlpool Corporation, let's analyze the activity ratios:

1. Inventory Turnover:
- The inventory turnover ratio indicates how many times in a year the company sells its inventory.
- Over the five-year period:
- In 2020, the ratio was 7.97, which decreased slightly to 7.43 in 2021 before increasing to 9.26 in 2022.
- It then decreased to 8.30 in 2023 and slightly more to 8.11 in 2024.
- Overall, the company effectively manages its inventory turnover, maintaining it at a relatively stable level compared to fluctuations in sales or production.

2. Receivables Turnover:
- The receivables turnover ratio measures how efficiently a company collects payments from its customers.
- From 2020 to 2024, Whirlpool Corporation has shown a consistent improvement in this ratio, increasing from 6.20 in 2020 to 12.41 in 2024.
- This indicates that the company is collecting receivables more quickly, which is a positive sign of effective credit management and liquidity.

3. Payables Turnover:
- The payables turnover ratio demonstrates how quickly a company pays its suppliers.
- Whirlpool Corporation's payables turnover ratio has shown some fluctuation over the five-year period, from 3.80 in 2020 to 4.68 in 2024.
- While there was an increase from 2020 to 2022, the ratio decreased slightly in the subsequent years, indicating changes in the company's payment policies or supplier relationships.

4. Working Capital Turnover:
- The working capital turnover ratio reflects how efficiently a company utilizes its working capital to generate sales revenue.
- From the data provided, the ratio was 24.12 in 2020, declined to 18.49 in 2021, then significantly increased to 38.27 in 2022. However, data for 2023 and 2024 is not available.
- The significant increase in 2022 suggests that the company efficiently utilized its working capital to generate revenue.

In conclusion, Whirlpool Corporation has demonstrated varying levels of efficiency in managing its activity ratios over the five-year period, with improvements in receivables turnover and working capital turnover, while experiencing some fluctuations in inventory turnover and payables turnover. Monitoring and managing these ratios can provide insights into the company's operational efficiency and financial performance.

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Average number of days

Whirlpool Corporation's activity ratios provide insight into the efficiency of its operations in managing inventory, collecting receivables, and paying its suppliers.

1. Days of Inventory on Hand (DOH) measures how many days it takes for Whirlpool to sell its inventory. The trend shows a slight increase in 2021 and then a decrease in subsequent years, reaching the lowest at 39.40 days in 2022. This indicates that Whirlpool's inventory turnover improved, allowing the company to sell its goods faster.

2. Days of Sales Outstanding (DSO) indicates how quickly Whirlpool collects its accounts receivable. The DSO decreased significantly from 2020 to 2022, indicating that the company has been more efficient in collecting payments from customers, with only 29.38 days in 2023 and 29.41 days in 2024.

3. Number of Days of Payables signifies how long it takes Whirlpool to pay its suppliers. The trend indicates a decrease in 2022, followed by a slight increase. The decrease in 2022, to 63.68 days, suggests that Whirlpool is paying its suppliers more quickly, potentially improving its relationships with them.

Overall, the improving trends in inventory turnover, accounts receivable collection, and payables management suggest that Whirlpool's operational efficiency has been enhancing over the years, potentially leading to better cash flow management and overall financial performance.

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Long-term

The fixed asset turnover ratio for Whirlpool Corporation indicates the company's efficiency in generating sales revenue from its fixed assets. Over the period from December 31, 2020, to December 31, 2024, Whirlpool's fixed asset turnover ratio has shown a generally increasing trend, starting at 6.03 in 2020 and reaching a peak of 8.50 in 2023 before slightly dropping to 7.18 in 2024.

This upward trend suggests that Whirlpool has been utilizing its fixed assets more effectively to generate sales over the years. The higher fixed asset turnover ratio indicates that the company is generating more sales revenue per dollar invested in fixed assets, which signifies operational efficiency and effective asset utilization.

On the other hand, the total asset turnover ratio for Whirlpool Corporation indicates how efficiently the company is utilizing all its assets to generate sales. The total asset turnover ratio also demonstrates an increasing trend from 0.94 in 2020 to 1.00 in 2024, with fluctuations in between.

The increasing total asset turnover ratio suggests that Whirlpool is becoming more efficient in generating sales revenue relative to its total asset base. This trend indicates that the company is utilizing its total assets more effectively to generate sales, which is a positive sign for management efficiency and overall operational performance.

In conclusion, the analysis of Whirlpool Corporation's long-term activity ratios, specifically the fixed asset turnover and total asset turnover ratios, suggests an improvement in asset utilization efficiency and operational performance over the years, as evidenced by the increasing trends in both ratios.