Wabash National Corporation (WNC)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Inventory turnover | 7.62 | 8.94 | 6.76 | 8.07 | 10.77 |
| Receivables turnover | 13.02 | 9.70 | 9.65 | 12.41 | 12.78 |
| Payables turnover | 13.02 | 11.52 | 9.24 | 12.66 | 14.93 |
| Working capital turnover | 7.71 | 10.21 | 7.50 | 4.78 | 8.22 |
The activity ratios provide insights into the efficiency of Wabash National Corp.'s operations in managing its inventory, receivables, payables, and working capital.
1. Inventory turnover:
- The inventory turnover ratio measures how many times a company sells and replaces its inventory during a period.
- Wabash National Corp.'s inventory turnover has shown a downward trend from 2019 to 2023, with a significant decrease in 2021.
- The decreasing trend may indicate a slower movement of inventory, which could potentially lead to higher carrying costs and obsolescence risks.
2. Receivables turnover:
- The receivables turnover ratio indicates how efficiently a company collects its outstanding receivables.
- Wabash National Corp.'s receivables turnover has fluctuated over the years, with a notable increase in 2023 compared to the previous two years.
- A higher receivables turnover implies that the company is collecting its receivables more quickly, which can improve cash flow and reduce the risk of bad debts.
3. Payables turnover:
- The payables turnover ratio reflects how quickly a company pays its suppliers.
- Wabash National Corp.'s payables turnover has also fluctuated, but generally has shown a decreasing trend over the past few years.
- A lower payables turnover could suggest extended payment terms with suppliers or potential liquidity constraints.
4. Working capital turnover:
- The working capital turnover ratio measures how efficiently a company is using its working capital to generate sales.
- Wabash National Corp.'s working capital turnover has fluctuated over the years, with a notable increase in 2019 and 2022.
- A higher working capital turnover indicates that the company is efficiently utilizing its working capital to generate revenue, which is generally a positive sign.
Overall, while the inventory turnover of Wabash National Corp. has shown a declining trend, improvements in receivables turnover and working capital turnover ratios in certain years reflect positive operational efficiency. However, the decreasing payables turnover may require further evaluation to assess its implications on the company's liquidity and supplier relationships.
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 | 47.93 | 40.84 | 53.98 | 45.21 | 33.90 |
| Days of sales outstanding (DSO) | days | 28.04 | 37.63 | 37.83 | 29.40 | 28.56 |
| Number of days of payables | days | 28.04 | 31.68 | 39.51 | 28.83 | 24.45 |
Wabash National Corp.'s activity ratios provide insight into the efficiency of the company's operations.
1. Days of Inventory on Hand (DOH):
- There has been an inconsistent trend in managing inventory over the past five years. The DOH increased significantly in 2021, indicating a potential buildup of inventory levels, before decreasing in 2022 and then increasing again in 2023. This could suggest fluctuations in production or sales forecasting accuracy.
2. Days of Sales Outstanding (DSO):
- The DSO ratio has also experienced fluctuations over the years, with the highest value in 2022. This indicates that on average, it took the company longer to collect payments from customers in that year, potentially affecting cash flow and liquidity.
3. Number of Days of Payables:
- The number of days of payables reflects the average time it takes for the company to pay its suppliers. The trend for Wabash National Corp. in this ratio has seen some variability, with an increase in 2022 and a decrease in 2023. This could indicate changes in payment terms with suppliers.
Overall, the analysis of these activity ratios suggests that Wabash National Corp. may benefit from improved inventory management practices to smoothen production levels, reduce DSO to enhance cash flow, and optimize payables management for better working capital efficiency.
Long-term
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Fixed asset turnover | 7.93 | 9.23 | 7.85 | 7.16 | 10.48 |
| Total asset turnover | 1.86 | 2.08 | 1.63 | 1.28 | 1.78 |
The fixed asset turnover ratio for Wabash National Corp. has shown some fluctuations over the past five years. In 2023, the ratio was 7.79, which indicates that the company generated $7.79 in sales for every $1 of fixed assets during that year. This ratio decreased from its peak of 10.48 in 2019, suggesting a potential decrease in efficiency in utilizing fixed assets to generate revenue.
On the other hand, the total asset turnover ratio has also exhibited variability over the same period. In 2023, the total asset turnover was 1.86, demonstrating that the company generated $1.86 in sales for every $1 of total assets on its books. This ratio has fluctuated between 1.28 in 2020 and 2.08 in 2022, indicating changes in the company's overall efficiency in generating sales from its total asset base.
Overall, the trends in both fixed asset turnover and total asset turnover ratios for Wabash National Corp. suggest some degree of variability in the company's ability to efficiently utilize its assets to generate revenue over the past five years. It is important for investors and analysts to further investigate the underlying reasons for these fluctuations to assess the company's operational efficiencies and potential future performance.