World Kinect Corporation (WKC)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Inventory turnover | 70.20 | 74.31 | 63.92 | 56.66 | 60.18 |
| Receivables turnover | 17.67 | 17.92 | 13.30 | 16.44 | 12.73 |
| Payables turnover | 15.06 | 16.42 | 12.73 | 16.06 | 13.72 |
| Working capital turnover | 105.07 | 93.79 | 33.95 | 21.31 | 36.54 |
Inventory turnover measures how efficiently a company manages its inventory by indicating how many times during a period the company sells and replaces its inventory. World Kinect Corp's inventory turnover has been consistently high over the last five years, indicating that the company efficiently manages its inventory levels and quickly sells its products.
Receivables turnover measures how efficiently a company collects cash from its credit sales during a period. World Kinect Corp's receivables turnover has been relatively stable over the years, reflecting the company's consistent ability to collect cash from its customers in a timely manner.
Payables turnover measures how effectively a company pays its suppliers. World Kinect Corp's payables turnover has also remained consistent, showing that the company manages its payables efficiently and pays its suppliers in a timely manner.
Working capital turnover indicates how effectively a company utilizes its working capital to generate sales. World Kinect Corp's working capital turnover has significantly improved over the years, suggesting that the company has been able to generate more sales with the same amount of working capital, reflecting improved efficiency in managing its working capital.
Overall, based on the activity ratios analysis, World Kinect Corp appears to be managing its inventory, receivables, payables, and working capital effectively, which is a positive indication of its operational efficiency and financial health.
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 | 5.20 | 4.91 | 5.71 | 6.44 | 6.06 |
| Days of sales outstanding (DSO) | days | 20.66 | 20.36 | 27.43 | 22.20 | 28.67 |
| Number of days of payables | days | 24.24 | 22.23 | 28.67 | 22.73 | 26.61 |
Activity ratios like Days of Inventory on Hand (DOH), Days of Sales Outstanding (DSO), and Number of Days of Payables provide insights into how efficiently a company manages its inventory, collects its receivables, and pays its payables, respectively.
1. Days of Inventory on Hand (DOH): This ratio indicates the number of days it takes for the company to sell its inventory. A lower DOH is generally favorable as it suggests that the company is managing its inventory efficiently. The trend for World Kinect Corp shows a slight increase in DOH from 4.91 days in 2022 to 5.20 days in 2023, which may indicate a slightly slower rate of inventory turnover.
2. Days of Sales Outstanding (DSO): DSO measures how long it takes for a company to collect its receivables. A lower DSO is preferable as it indicates faster collections. World Kinect Corp's DSO decreased from 20.36 days in 2022 to 20.93 days in 2023, suggesting a slightly slower collection of receivables compared to the previous year.
3. Number of Days of Payables: This ratio shows how long it takes for a company to pay its suppliers. A higher number of days indicates that the company is taking longer to pay its suppliers. World Kinect Corp's number of days of payables increased from 22.23 days in 2022 to 24.24 days in 2023, indicating a longer payment period to suppliers.
Overall, World Kinect Corp's activity ratios demonstrate a mixed performance. While the company's inventory management has slowed slightly, its collection period for receivables has also increased slightly. Additionally, the company is taking longer to pay its suppliers. It is important for the company to continuously monitor and manage these activity ratios to ensure optimal efficiency in its operations.
Long-term
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Fixed asset turnover | 92.59 | 121.94 | 89.82 | 59.42 | 102.02 |
| Total asset turnover | 6.47 | 7.23 | 5.27 | 4.52 | 6.14 |
World Kinect Corp's fixed asset turnover has fluctuated over the past five years, with values ranging from 59.42 to 121.94. The company's fixed asset turnover measures how efficiently it generates sales from its fixed assets, and a higher ratio typically indicates better asset utilization. In this case, the company's fixed asset turnover in 2022 was particularly high compared to the other years, suggesting improved efficiency in utilizing its fixed assets to generate revenue.
The total asset turnover of World Kinect Corp has also shown variability, ranging from 4.52 to 7.23 over the same period. This ratio evaluates the company's overall ability to generate revenue from its total assets, including both fixed and current assets. The increasing trend in total asset turnover indicates that the company has been more successful in generating sales relative to its total asset base. This trend suggests that World Kinect Corp has been utilizing its assets more effectively to drive revenue growth over the past five years.