Whirlpool Corporation (WHR)

Short-term

Turnover ratios

Inventory Turnover:

Whirlpool's inventory turnover has been fluctuating over the periods analyzed, showing a general decreasing trend from June 2022 to June 2024, followed by an increase in the last quarter of 2024. The company's ability to manage its inventory effectively is crucial for its operations, and a higher turnover ratio generally indicates that inventory is selling quickly, which is favorable for liquidity.

Receivables Turnover:

The receivables turnover of Whirlpool has displayed variability throughout the periods examined. There was a significant increase in the turnover rate from December 2022 to December 2024, indicating that the company is collecting its receivables at a faster pace during these periods. A higher turnover ratio in receivables suggests that Whirlpool is efficient in collecting payments from its customers.

Payables Turnover:

The payables turnover for Whirlpool has also shown fluctuations over the time frame studied. The trend indicates a general increase in payables turnover from December 2022 to June 2024, suggesting that the company is taking longer to pay its suppliers and vendors during these periods. A higher payables turnover ratio could indicate either a deliberate strategy to manage cash flow or potentially strained relationships with suppliers.

Working Capital Turnover:

The working capital turnover for Whirlpool demonstrates a varied pattern, with gaps in data for several periods. Notably, there was a substantial increase in working capital turnover from March 2023, indicating that Whirlpool became more efficient in generating revenue from its working capital during that period. A higher working capital turnover ratio indicates that the company is effectively utilizing its working capital to drive sales and revenue.

In essence, analyzing these activity ratios provides insights into Whirlpool's operational efficiency in managing its inventory, receivables, payables, and working capital over the specified periods.

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Average number of days

Whirlpool Corporation's activity ratios indicate how efficiently the company manages its inventory, collects its receivables, and pays its suppliers.

1. Days of Inventory on Hand (DOH): Whirlpool's DOH fluctuated over the past reporting periods. Generally, it ranged from around 40 to 60 days. A decreasing trend from December 2022 to June 2023 suggests efficient inventory management. However, an increase in DOH from June 2024 to September 2024 may indicate potential issues with inventory control.

2. Days of Sales Outstanding (DSO): Whirlpool's DSO also saw fluctuations, varying between 30 to 60 days over the analyzed periods. A decrease in DSO from December 2023 to March 2024 suggests improved receivables management. Generally, a lower DSO indicates faster collection of receivables, potentially improving cash flow.

3. Number of Days of Payables: The days of payables ranged from approximately 60 to 100 days across the periods. A decreasing trend in payables days from December 2022 to September 2023 implies the company was paying its suppliers more quickly. However, an increase from March 2024 to December 2024 suggests a reversal in this trend.

In summary, while Whirlpool's activity ratios show some fluctuations, the company should focus on maintaining efficient inventory levels, improving receivables collection, and managing payment terms with suppliers effectively to enhance its overall operational efficiency.

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Long-term

Whirlpool Corporation's fixed asset turnover ratio has shown a generally increasing trend over the past few years, indicating that the company is generating more sales revenue per dollar of fixed assets invested. The ratio increased from 6.43 in March 2020 to 8.43 in December 2022, before slightly decreasing to 7.14 by December 2024. This suggests that Whirlpool has been effectively utilizing its fixed assets to generate sales.

In contrast, the total asset turnover ratio has fluctuated over the same period, showing both increases and decreases. The ratio ranged from 0.93 in September 2020 to a peak of 1.15 in September 2022 before declining to 1.00 by December 2024. This indicates that Whirlpool's overall efficiency in generating revenue from all its assets has been mixed, with periods of improvement and regression.

Overall, the analysis of Whirlpool's long-term activity ratios suggests that the company has been effectively utilizing its fixed assets to drive sales growth, although the efficiency of generating revenue from all assets has shown some variability. Monitoring these ratios over time can provide valuable insights into Whirlpool's asset management efficiency and overall operational performance.