Willscot Mobile Mini Holdings Corp A (WSC)

Short-term

Turnover ratios

The activity ratios of Willscot Mobile Mini Holdings Corp A over the specified periods reveal several key insights into the company's operational efficiency, asset management, and credit policies.

Inventory Turnover:
The inventory turnover ratio demonstrates a decreasing trend from a high of 42.86 times on June 30, 2020, to a low of 21.75 times on December 31, 2023, with slight fluctuations thereafter. The declining ratio suggests the company has been holding inventory longer over time, indicating potential accumulation of inventory or challenges in inventory management efficiency. The ratio's recent stabilization around the low 20s may reflect adjustments in inventory strategies or changes in demand patterns.

Receivables Turnover:
This ratio exhibits a relatively consistent upward trend from 4.57 times on June 30, 2020, to approximately 5.91 times by March 31, 2025. The gradual increase indicates improved efficiency in collecting accounts receivable, leading to shorter average collection periods and enhanced cash flow management. The steady improvement reflects effective credit policies and collections efforts.

Payables Turnover:
The payables turnover ratio fluctuates over the period but generally trends upward, from 7.22 times on June 30, 2020, to 11.71 times on March 31, 2025. An increasing turnover ratio suggests that the company is paying off its suppliers more frequently or efficiently, possibly leveraging better payment terms or improving cash management. The significant jumps observed in late 2022 and early 2023 may be associated with changes in supplier payment policies or operational adjustments.

Working Capital Turnover:
The working capital turnover data is sporadic, with only four periods reported, but shows notable improvement over time. Starting from 3.02 on June 30, 2020, it escalates to over 334.20 by December 31, 2023, indicating a substantial increase in efficiency in utilizing working capital to generate sales. The sharp rise reflects enhanced operational leverage or more efficient asset utilization, although the absence of subsequent data limits understanding of longer-term trends.

Summary:
The overall activity ratios indicate a company that has historically experienced high inventory turnover, which has tapered off to a lower yet relatively stable level, possibly due to inventory management or product mix adjustments. Improvements in receivables and payables turnover ratios suggest ongoing enhancements in credit and payment processes, leading to better liquidity management. The significant increase in working capital turnover points toward improved operational efficiency and effective use of short-term assets to support sales. Together, these ratios depict a company striving for and achieving greater operational efficiency, with ongoing adjustments in inventory management and credit policies contributing to its financial dynamics.

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Average number of days

The analysis of WillScot Mobile Mini Holdings Corp A's activity ratios from the provided data reveals several trends and insights concerning the company's operational efficiency over the specified period.

Days of Inventory on Hand (DOH):
The company’s inventory levels, measured in days, showed an increasing trend from 8.52 days as of June 30, 2020, to a peak of approximately 17.21 days by September 30, 2024. Initially, the DOH was relatively low, indicating efficient inventory management in early 2020, but gradually increased over time. This suggests the company has been holding inventory for longer periods, which could reflect strategic inventory buildup, slower turnover, or changes in inventory management practices. Despite fluctuation, the DOH remains within a range that indicates the company's inventory turnover rate is moderate, with a notable increase during late 2023 and mid-2024.

Days of Sales Outstanding (DSO):
The receivables collection period, as represented by DSO, experienced significant variation over the period. Starting at approximately 79.91 days in June 2020, it peaked around 100.97 days in September 2020, then generally trended downward. By December 2022, the DSO had decreased substantially to approximately 65.45 days, indicating an improvement in the company’s collection efficiency. Throughout 2023 and into 2024, the DSO fluctuated slightly but maintained a downward trend, reaching approximately 61.73 days at the latest data point. This decline suggests enhanced receivables management and shorter credit collection cycles, thereby improving cash flow timing.

Days of Payables (Average Payment Period):
The period of payables shows a pattern of fluctuation with a notable decline from a high of approximately 61.95 days in September 2020 to around 30.49 days in December 2023. Post-2020, the company appears to have shortened its payables period, potentially optimizing cash outflows. Slight increases are observed in mid-2024, but overall, the trend remains towards faster payments relative to earlier periods. Shorter payable durations may reflect improved payment management, supplier negotiations, or strategic cash conservation measures.

Overall Observations:
The company's activity ratios demonstrate a trend toward operational efficiency in receivables collection, with decreasing DSO values indicating faster cash conversion. Inventory levels, while rising slightly over time, remain within a manageable range, though the increase warrants monitoring for potential impacts on liquidity and storage costs. The reduction in days payable suggests a shift towards quicker payment cycles, which could impact working capital strategies but may also improve supplier relationships. Collectively, these indicators hint at a strategic focus on optimizing cash flow and operational liquidity, contributing to a more balanced working capital cycle over the analyzed period.

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Long-term

The analysis of Willscot Mobile Mini Holdings Corp A’s long-term activity ratios indicates notable trends and stability in the company's asset utilization efficiency over the periods examined.

Starting with the fixed asset turnover ratio, the data reveals significant fluctuations, especially between 2020 and 2021. The ratio declines sharply from 3.65 on June 30, 2020, to 2.26 on September 30, 2020, and slightly recovers to 2.55 by December 31, 2020. Throughout 2021, the ratio generally shows an upward trajectory, reaching 3.35 on September 30, 2021, suggesting improved utilization of fixed assets during this period. However, the ratio experiences a pronounced drop at the end of 2021 and into early 2022, declining sharply to 0.62 on December 31, 2021, and further down to 0.63 by March 31, 2022. The low ratios in late 2021 and early 2022 point to a diminished efficiency in fixed asset utilization, possibly due to asset impairment, increased asset base without proportional revenue, or operational adjustments.

A subsequent trend demonstrates recovery and stabilization from mid-2022 onward. The ratio increases significantly to 3.76 on June 30, 2022, and then declines slightly to 0.69 on September 30, 2022, followed by marginal improvements to 0.74 at year-end 2022 and consistent ratios (~0.75) into the first quarter of 2023. The persistent low ratios through these periods indicate a period of reduced fixed asset productivity or possibly expanded asset base not yet fully contributing to revenue.

In contrast, the total asset turnover ratio exhibits relative stability and a generally upward trend over the examined periods. Starting from 0.30 on June 30, 2020, it fluctuates modestly, reaching 0.21 on September 30, 2020, then gradually ascending to around 0.40 by March 31, 2024. The increase signifies a more efficient utilization of total assets in generating sales, reflecting either operational improvements or assets being leveraged more effectively.

Overall, the long-term activity ratios suggest that while Willscot Mobile Mini Holdings Corp A experienced periods of reduced fixed asset efficiency, particularly at the end of 2021 and the beginning of 2022, the company has demonstrated resilience and a tendency towards stabilization in asset turnover measures. The steadier total asset turnover over time indicates ongoing improvements in the overall utilization of its asset base to support revenue generation.