Waste Management Inc (WM)

Activity ratios

Short-term

Turnover ratios

	Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019
Inventory turnover	86.74	83.98	86.28	86.14	88.22	90.00	88.40	91.36	97.74	96.81	96.49	93.49	91.66	70.00	70.03	73.08	79.54	77.08	79.74	77.50
Receivables turnover	6.92	6.77	6.89	7.49	7.01	7.12	7.00	7.21	6.81	6.23	5.97	6.21	5.60	6.74	7.17	5.79	7.89	7.65	7.55	8.25
Payables turnover	8.78	8.46	9.02	9.70	8.19	9.61	10.17	9.84	9.60	8.72	8.73	9.57	10.14	9.26	9.14	8.22	7.92	9.30	9.13	9.05
Working capital turnover	—	—	—	—	—	—	70.40	—	—	—	—	359.12	—	27.13	—	6.01	5.02	5.98	7.65	—

Waste Management, Inc.'s inventory turnover ratios have been relatively consistent over the past eight quarters, ranging from 71.73 to 76.45, indicating that the company efficiently manages its inventory levels and quickly converts inventory into sales. This suggests effective inventory management practices in place.

The receivables turnover for Waste Management, Inc. has also been relatively stable, fluctuating between 6.91 and 7.64 over the same period. This demonstrates that the company efficiently collects outstanding receivables and effectively manages its accounts receivable.

In terms of payables turnover, Waste Management, Inc. has maintained a consistent trend, with ratios ranging from 6.96 to 8.62. This indicates the company's ability to efficiently pay off its suppliers and manage its accounts payable effectively.

The working capital turnover for Waste Management, Inc. is not available for the first four quarters of 2022 but shows a high turnover ratio of 71.82 for Q2 2022. This indicates that the company may have efficiently utilized its working capital to generate sales during that quarter.

Overall, Waste Management, Inc.'s activity ratios suggest effective management of its inventory, receivables, payables, and working capital, which are essential indicators of operational efficiency and financial health.

Average number of days

		Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019
Days of inventory on hand (DOH)	days	4.21	4.35	4.23	4.24	4.14	4.06	4.13	4.00	3.73	3.77	3.78	3.90	3.98	5.21	5.21	4.99	4.59	4.74	4.58	4.71
Days of sales outstanding (DSO)	days	52.76	53.92	52.94	48.74	52.06	51.23	52.14	50.59	53.59	58.57	61.19	58.73	65.18	54.13	50.91	63.07	46.28	47.74	48.36	44.23
Number of days of payables	days	41.57	43.17	40.46	37.64	44.55	37.98	35.89	37.11	38.04	41.87	41.82	38.16	36.00	39.40	39.93	44.39	46.11	39.23	39.96	40.32

Activity ratios provide insights into how efficiently a company manages its assets and liabilities. Let's analyze the activity ratios of Waste Management, Inc. based on the given data.

1. Days of Inventory on Hand (DOH): Waste Management, Inc. has generally maintained a stable level of inventory over the quarters, ranging from 4.73 to 5.09 days. This indicates that the company is efficiently managing its inventory levels and turning over its inventory within a short time frame.

2. Days of Sales Outstanding (DSO): The DSO reflects how quickly the company is collecting payments from customers. Waste Management, Inc. has seen fluctuations in DSO, with values ranging from 47.77 to 52.85 days. A lower DSO is generally favorable as it signifies prompt collection of receivables, but the company should strive to bring this number down to improve cash flow efficiency.

3. Number of Days of Payables: Waste Management, Inc. has been effectively managing its payables, with the number of days ranging from 42.37 to 52.43 days. A longer payable period allows the company to hold onto cash longer before paying its obligations, which can help with cash flow management.

In summary, Waste Management, Inc. is efficiently managing its inventory levels and payables while efforts could be made to reduce the days of sales outstanding to enhance cash flow efficiency.

Long-term

	Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019
Fixed asset turnover	0.50	0.51	0.51	0.52	0.52	0.53	0.53	0.51	0.50	0.48	0.46	0.45	0.44	0.47	1.17	1.19	1.19	1.20	1.20	1.22
Total asset turnover	0.60	0.62	0.62	0.62	0.62	0.64	0.62	0.61	0.60	0.58	0.54	0.52	0.50	0.60	0.57	0.57	0.55	0.57	0.59	0.65

The fixed asset turnover ratio for Waste Management, Inc. has shown a declining trend over the past eight quarters, from 1.32 in Q1 2022 to 1.20 in Q4 2023. This indicates that the company's efficiency in generating revenue from its fixed assets has decreased slightly over this period. However, the ratio has remained relatively stable around the range of 1.20 to 1.27.

On the other hand, the total asset turnover ratio has also exhibited a slight decline from 0.65 in Q1 2022 to 0.62 in Q4 2023. This ratio reflects the company's overall efficiency in utilizing all assets to generate revenue. The decreasing trend suggests that Waste Management, Inc. may be experiencing challenges in effectively leveraging its total assets to generate sales.

Overall, the long-term activity ratios for Waste Management, Inc. indicate a minor decline in asset turnover efficiency over the past two years. Investors and stakeholders should continue monitoring these ratios to assess the company's operational performance and asset utilization in the coming quarters.