Advanced Drainage Systems Inc (WMS)
Activity ratios
Short-term
Turnover ratios
| Mar 31, 2025 | Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | 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 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Inventory turnover | 3.71 | 3.85 | 3.67 | 3.64 | 3.72 | 4.25 | 4.55 | 4.23 | 4.21 | 4.46 | 4.43 | 4.21 | 3.98 | 3.86 | 3.78 | 4.36 | 4.30 | 5.18 | 5.33 | 5.02 |
| Receivables turnover | 9.25 | 11.87 | 8.15 | 7.89 | 8.88 | 11.79 | 8.03 | 8.57 | 10.01 | 12.92 | 8.23 | 7.05 | 8.10 | 8.36 | 6.38 | 7.06 | 8.39 | 10.12 | 6.98 | 7.31 |
| Payables turnover | 8.30 | 9.97 | 6.54 | 6.71 | 6.79 | 8.28 | 7.83 | 8.94 | 9.29 | 11.75 | 8.96 | 7.51 | 8.75 | 9.20 | 6.25 | 6.28 | 7.56 | 11.43 | 10.44 | 12.43 |
| Working capital turnover | 3.14 | 3.43 | 2.84 | 3.13 | 3.34 | 3.42 | 3.52 | 3.92 | 4.81 | 3.98 | 3.51 | 3.36 | 5.76 | 5.72 | 5.71 | 5.52 | 4.67 | 4.95 | 4.35 | 3.76 |
Advanced Drainage Systems Inc's activity ratios show varying trends over the past few years.
1. Inventory Turnover: The inventory turnover ratio has been relatively stable around the range of 3.5 to 5.5 times over the reporting periods. A slight decrease in the ratio is observed in the latest period, indicating that the company is taking slightly longer to sell its inventory.
2. Receivables Turnover: The receivables turnover ratio has fluctuated significantly over the years, ranging from approximately 6 to 12 times. The ratio shows some volatility, with periods of both improvement and deterioration in the collection of receivables.
3. Payables Turnover: The payables turnover ratio has shown a decreasing trend from around 12.4 to 6.5 times. This suggests the company is taking longer to pay its suppliers, which could indicate potential cash flow management strategies.
4. Working Capital Turnover: The working capital turnover ratio has also displayed fluctuations, moving between 2.8 to 5.8 times. The ratio reveals how effectively the company is utilizing its working capital to generate sales revenue, with some periods showing better efficiency than others.
Overall, these activity ratios provide insights into Advanced Drainage Systems Inc's efficiency in managing its inventory, receivables, payables, and working capital to generate sales and optimize operational performance.
Average number of days
| Mar 31, 2025 | Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 98.46 | 94.79 | 99.47 | 100.22 | 98.02 | 85.94 | 80.30 | 86.35 | 86.73 | 81.91 | 82.47 | 86.61 | 91.64 | 94.52 | 96.48 | 83.78 | 84.98 | 70.42 | 68.45 | 72.67 |
| Days of sales outstanding (DSO) | days | 39.46 | 30.76 | 44.79 | 46.29 | 41.09 | 30.97 | 45.46 | 42.57 | 36.48 | 28.26 | 44.36 | 51.78 | 45.04 | 43.65 | 57.22 | 51.72 | 43.48 | 36.07 | 52.26 | 49.90 |
| Number of days of payables | days | 43.97 | 36.60 | 55.79 | 54.41 | 53.72 | 44.07 | 46.61 | 40.84 | 39.27 | 31.07 | 40.72 | 48.59 | 41.71 | 39.69 | 58.44 | 58.09 | 48.31 | 31.95 | 34.96 | 29.36 |
Based on the provided data for Advanced Drainage Systems Inc's activity ratios, we can analyze the following:
1. Days of Inventory on Hand (DOH):
The trend in DOH shows fluctuations over the quarters, ranging from a low of 68.45 days in September 2020 to a high of 100.22 days in June 2024, with some variability in between. Generally, a higher DOH indicates a longer time it takes for the company to sell its inventory, which can potentially lead to higher carrying costs and inventory obsolescence risk. It is worth noting that the DOH increased towards the end of the period, suggesting a buildup of inventory levels.
2. Days of Sales Outstanding (DSO):
The DSO ratio fluctuated over the quarters, ranging from a low of 28.26 days in December 2022 to a high of 57.22 days in September 2021. A lower DSO indicates faster collections from customers, which can lead to better cash flow management. The decreasing trend towards the end of the period suggests improvements in the company's ability to collect receivables efficiently.
3. Number of Days of Payables:
The trend in the number of days of payables shows fluctuations, ranging from 29.36 days in June 2020 to 55.79 days in September 2024. A higher number of days of payables indicates that the company takes longer to pay its suppliers, which can be advantageous for improving cash flow. The increasing trend towards the end of the period suggests a potential delay in settling payables.
Overall, while the activity ratios of Advanced Drainage Systems Inc show variability over the quarters, it is essential for the company to maintain a balance between inventory management, receivables collection, and payables settlement to ensure efficient working capital management and sustainable business operations.
Long-term
| Mar 31, 2025 | Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | 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 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Fixed asset turnover | — | — | — | — | — | — | 3.66 | 3.93 | 4.19 | 4.57 | 4.88 | 4.74 | 4.47 | 4.29 | 4.24 | 4.14 | 3.93 | 3.85 | 3.77 | 3.71 |
| Total asset turnover | 0.79 | 0.82 | 0.82 | 0.84 | 0.87 | 0.90 | 0.90 | 0.96 | 1.06 | 1.04 | 1.00 | 0.93 | 1.05 | 0.99 | 0.92 | 0.87 | 0.82 | 0.82 | 0.77 | 0.73 |
The fixed asset turnover ratio for Advanced Drainage Systems Inc has shown an increasing trend over the analyzed period, starting at 3.71 in June 2020 and reaching 4.19 in March 2024, before dropping slightly to 3.93 in June 2024. This ratio indicates that the company generated $X in sales for every dollar invested in fixed assets.
On the other hand, the total asset turnover ratio demonstrated some fluctuations but generally maintained an upward trajectory from 0.73 in June 2020 to 0.79 in March 2025. This ratio signifies the company's ability to generate sales revenue in relation to its total assets.
The fixed asset turnover ratio's consistent increase reflects that Advanced Drainage Systems Inc has been utilizing its fixed assets more efficiently over time, which is a positive sign of operational effectiveness. However, the slight decline in the ratio in the most recent period may warrant further investigation to ensure sustainable growth and profitability.