Wabash National Corporation (WNC)

Short-term

Turnover ratios

Activity ratios provide insight into how efficiently a company is managing its assets and liabilities. Let's analyze the activity ratios of Wabash National Corp.:

1. Inventory Turnover:
- The inventory turnover ratio measures how effectively the company is managing its inventory. Wabash National Corp. has shown a consistent trend of inventory turnover over the past eight quarters, ranging from 6.11 to 8.94. This suggests that the company has been effectively managing its inventory levels.

2. Receivables Turnover:
- The receivables turnover ratio indicates how quickly the company collects cash from its credit sales. Wabash National Corp. has seen an increasing trend in receivables turnover over the quarters, indicating an improvement in collecting payments from customers efficiently.

3. Payables Turnover:
- The payables turnover ratio shows the speed at which the company pays its suppliers. Wabash National Corp. has shown a fluctuating trend in payables turnover over the quarters, with a slight decrease in the latest quarter. This might indicate variations in the company's payment terms with suppliers.

4. Working Capital Turnover:
- The working capital turnover ratio measures how effectively the company utilizes its working capital to generate sales. Wabash National Corp. has maintained a relatively stable working capital turnover ratio over the quarters. A higher turnover ratio indicates that the company is efficiently using its working capital to generate revenue.

In conclusion, Wabash National Corp. has shown strong inventory turnover and improving receivables turnover, which indicate efficient management of inventory and collection of receivables. The payables turnover has shown some fluctuations, while the working capital turnover remains stable, suggesting effective utilization of working capital to drive sales.

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Average number of days

The activity ratios of Wabash National Corp. provide insights into how efficiently the company manages its inventory, accounts receivable, and accounts payable.

1. Days of Inventory on Hand (DOH):
The days of inventory on hand measure the average number of days it takes for the company to sell its inventory. A lower DOH is generally better as it indicates faster inventory turnover. Wabash National Corp.'s DOH has been fluctuating over the quarters, ranging from a low of 40.84 days in Q4 2022 to a high of 59.46 days in Q3 2023. The company should aim to reduce this ratio to free up working capital tied up in inventory.

2. Days of Sales Outstanding (DSO):
The days of sales outstanding measure how long it takes for the company to collect on its accounts receivable. A lower DSO indicates more efficient collection practices. Wabash National Corp.'s DSO has shown some volatility, with the lowest value of 26.33 days in Q4 2023 and the highest of 54.07 days in Q1 2022. The company may need to improve its credit and collection policies to reduce this ratio.

3. Number of Days of Payables:
The number of days of payables indicates the average number of days the company takes to pay its suppliers. A higher number of days suggests the company is taking longer to pay its bills, which can have both positive (cash flow management) and negative (supplier relations) implications. Wabash National Corp.'s payables days have also fluctuated, ranging from a low of 31.68 days in Q4 2022 to a high of 57.89 days in Q2 2022. The company should strike a balance between maximizing float and maintaining good relationships with suppliers.

In conclusion, Wabash National Corp. should focus on optimizing its inventory management, enhancing accounts receivable collection processes, and maintaining an appropriate balance in its payables to improve its overall efficiency and working capital management.

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Long-term

The fixed asset turnover ratio measures how efficiently a company is using its fixed assets to generate sales. Over the past four quarters, Wabash National Corp.'s fixed asset turnover ratio has been consistently high, ranging from 7.79 to 9.23. This indicates that the company is effectively utilizing its fixed assets to generate revenue.

On the other hand, the total asset turnover ratio reflects how well a company is utilizing all its assets to generate sales. Wabash National Corp.'s total asset turnover ratio has ranged from 1.55 to 2.08 over the same period. Although the ratio fluctuates, it appears that the company is effectively using its total assets to generate revenue, with the ratio consistently above 1.5.

Overall, based on the long-term activity ratios, Wabash National Corp. demonstrates efficient utilization of both fixed assets and total assets to generate sales, as indicated by the high fixed asset turnover and total asset turnover ratios across the quarters analyzed.