Williams Companies Inc (WMB)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Inventory turnover | 2.89 | 2.76 | 1.66 | 15.38 | 11.24 |
| Receivables turnover | 6.59 | 4.03 | 5.37 | 7.73 | 8.23 |
| Payables turnover | 0.57 | 0.38 | 0.36 | 4.34 | 2.55 |
| Working capital turnover | — | — | — | — | — |
Inventory turnover for Williams Cos Inc has gradually decreased from 15.69 in 2019 to 6.88 in 2023. This indicates a decline in the frequency with which the company is able to sell and replace its inventory over the years.
Receivables turnover has shown inconsistencies, with a significant decrease in 2022 followed by an increase in 2023. This suggests that the company may have faced challenges in collecting payments from customers in 2022 but managed to improve its collection efficiency in 2023.
Payables turnover has also experienced a downward trend, indicating that the company is taking longer to pay its suppliers over the years. This may have implications for cash flow management and relationships with suppliers.
The absence of data for working capital turnover limits the ability to assess the efficiency of the company's working capital management over the years. It is important for Williams Cos Inc to provide this data in order to evaluate the effectiveness of its short-term asset and liability management.
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 | 126.28 | 132.43 | 219.23 | 23.73 | 32.47 |
| Days of sales outstanding (DSO) | days | 55.38 | 90.64 | 67.94 | 47.24 | 44.33 |
| Number of days of payables | days | 635.52 | 962.99 | 1,009.97 | 84.10 | 143.40 |
Days of Inventory on Hand (DOH) measures how efficiently Williams Cos Inc manages its inventory. The DOH has been increasing over the past five years, from 23.27 days in 2019 to 53.08 days in 2023. This indicates it now takes longer for the company to sell its inventory, possibly due to slower sales or inefficient inventory management.
Days of Sales Outstanding (DSO) reflects Williams Cos Inc's ability to collect its accounts receivable. The DSO has fluctuated over the years, peaking at 90.64 days in 2022 and decreasing to 55.38 days in 2023. The decreasing trend suggests the company improved its receivables collection process, resulting in faster conversions of sales into cash.
Number of Days of Payables measures how long Williams Cos Inc takes to pay its suppliers. The number of days of payables has been increasing steadily over the period, from 102.74 days in 2019 to 267.16 days in 2023. This indicates the company is taking longer to pay its suppliers, which could imply cash flow constraints or negotiation tactics to delay payments.
Overall, the trend in these activity ratios suggests that Williams Cos Inc may be facing challenges in managing its inventory efficiently and maintaining optimal relationships with both customers and suppliers. Further analysis and comparison with industry benchmarks would provide a more comprehensive evaluation of the company's performance in these areas.
Long-term
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Fixed asset turnover | 0.32 | 0.35 | 0.36 | 0.27 | 0.28 |
| Total asset turnover | 0.21 | 0.23 | 0.22 | 0.17 | 0.18 |
Williams Cos Inc's long-term activity ratios reveal how effectively the company is utilizing its assets to generate revenue. The fixed asset turnover ratio has been relatively stable over the past five years, ranging from 0.27 to 0.36. This indicates that the company is generating $0.27 to $0.36 in sales for every dollar invested in fixed assets.
On the other hand, the total asset turnover ratio shows a similar trend, fluctuating between 0.17 and 0.23 during the same period. This ratio signifies that Williams Cos Inc is generating sales of $0.17 to $0.23 for each dollar of total assets owned.
Overall, both ratios indicate that the company's efficiency in generating revenue from its assets has been relatively consistent over the past five years. However, there might be potential for improvement in optimizing asset utilization to increase revenue generation.