World Kinect Corporation (WKC)

Short-term

Turnover ratios

World Kinect Corporation's inventory turnover ratio has shown a gradual decline over the past few years, indicating that the company is taking longer to sell its inventory. The ratio decreased from a high of 105.28 in March 2020 to 80.12 in December 2024. This trend suggests that the company may be holding excess inventory or facing challenges in managing its inventory effectively.

On the other hand, the receivables turnover ratio has fluctuated over the years but generally shows a downward trend. The ratio dropped from 18.21 in March 2020 to 17.33 in December 2024. This could imply that World Kinect Corporation is taking longer to collect payments from its customers, which may potentially impact the company's cash flow and liquidity.

In terms of payables turnover, there has been a similar fluctuating pattern, with a slight decrease over the years. The ratio decreased from 22.73 in March 2020 to 15.09 in December 2024. This may suggest that the company is taking longer to pay its suppliers, which could impact its relationships with suppliers and potentially lead to challenges in sourcing materials or services in the future.

Lastly, the working capital turnover ratio has shown significant fluctuations, reaching a peak of 128.49 in March 2023 before declining to 80.87 in December 2024. This ratio indicates how efficiently the company is using its working capital to generate sales revenue. The decreasing trend in this ratio may suggest that World Kinect Corporation is becoming less efficient in utilizing its working capital to drive sales growth.

Overall, based on these activity ratios, World Kinect Corporation may need to focus on improving its inventory management, accounts receivable collection, and payables management to enhance its operational efficiency and maintain healthy relationships with both customers and suppliers.

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Average number of days

Based on the provided data, World Kinect Corporation's activity ratios show fluctuations over time.

1. Days of Inventory on Hand (DOH): The company's DOH varied throughout the years, with a general upward trend from March 2020 to September 2022, peaking in June 2022, before slightly decreasing by December 2024. This suggests that the company held inventory for an increasing number of days before selling it, which may indicate slower inventory turnover or potential issues with inventory management.

2. Days of Sales Outstanding (DSO): The DSO ratio also experienced fluctuations, with peaks in March 2021 and March 2022. Higher DSO values indicate a longer time taken by customers to pay for purchases, impacting the company's cash flow. The DSO decreased by December 2024 compared to previous years, implying improved efficiency in collecting receivables.

3. Number of Days of Payables: The days of payables show a similar pattern to the DSO, with peaks in March 2021 and March 2022. A higher number of days of payables suggests the company takes longer to pay its suppliers, potentially indicating strained supplier relationships or liquidity issues. The payables days decreased slightly by December 2024, which could indicate more timely payments to suppliers.

Overall, the analysis of World Kinect Corporation's activity ratios suggests a need for the company to focus on improving inventory management, reducing days of sales outstanding, and managing payables more effectively to enhance operational efficiency and strengthen its financial position.

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Long-term

The Fixed Asset Turnover ratio of World Kinect Corporation has shown a gradual decline from 100.43 in March 2020 to 82.15 in December 2024. This indicates that the company's ability to generate sales from its fixed assets has decreased over the years, reflecting either lower sales or an increase in the value of fixed assets without a proportional increase in revenue generation.

On the other hand, the Total Asset Turnover ratio of the company has also exhibited a decreasing trend, albeit less steep than the Fixed Asset Turnover ratio. It declined from 6.58 in March 2020 to 6.26 in December 2024. This suggests that the efficiency with which the company is utilizing its total assets to generate sales has decreased slightly over the period.

Overall, the declining trend in both the Fixed Asset Turnover and Total Asset Turnover ratios indicates a potential decrease in operational efficiency and effectiveness in utilizing assets for revenue generation. This may warrant further investigation into the company's operational processes and asset management strategies to improve long-term activity performance.