World Kinect Corporation (WKC)

Short-term

Turnover ratios

Based on the data provided for World Kinect Corporation, we can analyze the activity ratios as follows:

1. Inventory Turnover:
- The inventory turnover ratio measures how efficiently the company is managing its inventory by indicating the number of times a company sells and replaces its inventory within a specific period.
- We observe a consistent improvement in World Kinect Corporation's inventory turnover over the years, increasing from 56.66 in 2020 to 80.12 in 2024. This indicates that the company is selling its inventory at a faster rate, which is a positive sign of efficient inventory management.

2. Receivables Turnover:
- The receivables turnover ratio reflects how effectively a company is collecting its accounts receivable from customers.
- World Kinect Corporation's receivables turnover ratio fluctuated initially but remained relatively stable over the years, ranging from 13.30 in 2021 to 17.33 in 2024. This suggests that the company has been successful in collecting its outstanding receivables within a reasonable time frame.

3. Payables Turnover:
- The payables turnover ratio shows how quickly a company is paying off its suppliers or trade payables.
- World Kinect Corporation's payables turnover ratio declined slightly from 16.06 in 2020 to 15.09 in 2024. This decrease indicates that the company is taking a bit longer to pay its suppliers, which could be due to negotiated payment terms or other strategic reasons.

4. Working Capital Turnover:
- The working capital turnover ratio measures how effectively a company is utilizing its working capital to generate sales.
- World Kinect Corporation's working capital turnover ratio experienced significant growth over the years, from 21.31 in 2020 to 80.87 in 2024. This substantial increase indicates that the company is generating higher sales revenue relative to its working capital, showcasing efficient use of resources to drive revenue growth.

In conclusion, World Kinect Corporation has demonstrated positive trends in its activity ratios, particularly in inventory turnover and working capital turnover, reflecting efficient management of inventory, receivables, payables, and working capital to support its business operations and revenue generation.

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Average number of days

World Kinect Corporation's activity ratios provide insight into how efficiently the company manages its inventory, collects receivables, and pays its suppliers.

1. Days of Inventory on Hand (DOH):
- The company's DOH has shown a consistent downward trend from 6.44 days in 2020 to 4.56 days in 2024. This indicates that the company is managing its inventory more efficiently over time, reducing the number of days it takes to sell its inventory. A lower DOH is generally favorable as it implies faster inventory turnover.

2. Days of Sales Outstanding (DSO):
- The DSO has fluctuated over the years but has generally remained within a reasonable range. The DSO was 22.20 days in 2020 and increased to 27.43 days in 2021 before declining to 21.06 days in 2024. This metric reflects the average number of days it takes for the company to collect payments from its customers. A lower DSO indicates that the company is collecting receivables more quickly, which is favorable for cash flow management.

3. Number of Days of Payables:
- The number of days of payables has also fluctuated but has not shown a clear trend over the years. The number of days of payables was 22.73 days in 2020 and ranged between 22.23 days and 28.67 days in subsequent years. This metric represents the average number of days the company takes to pay its suppliers. A longer period of payables could indicate that the company is effectively using trade credit to manage its cash flow.

Overall, World Kinect Corporation has shown improvements in managing its inventory and collecting receivables efficiently over the years, while its payment practices to suppliers have been relatively stable. These activity ratios suggest that the company is effectively managing its working capital and operating cycle.

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Long-term

World Kinect Corporation has shown a strong performance in terms of its long-term activity ratios. The fixed asset turnover ratio has exhibited a significant increase over the years, indicating the efficiency with which the company generates sales from its investment in fixed assets. The ratio has improved from 59.42 in 2020 to 82.15 in 2024, with a peak observed in 2022 at 121.94. This trend suggests that the company has been able to utilize its fixed assets more effectively to generate revenue.

Similarly, the total asset turnover ratio, which measures how efficiently the company generates sales from all its assets, has also shown a positive trend. It has increased from 4.52 in 2020 to 6.26 in 2024, with the highest point at 7.23 in 2022. This indicates that World Kinect Corporation has been successful in optimizing the use of both fixed and current assets to generate revenue.

Overall, the improving trend in both fixed asset turnover and total asset turnover ratios reflects World Kinect Corporation's strong operational efficiency and effective management of its assets in driving sales growth over the years.