United States Steel Corporation (X)

Short-term

Turnover ratios

United States Steel Corp.'s activity ratios provide insights into the company's operational efficiency and effectiveness in managing its resources.

1. Inventory turnover: The inventory turnover ratio measures how efficiently the company manages its inventory by indicating how many times inventory is sold and replaced during a period. United States Steel Corp. has maintained a relatively stable inventory turnover rate over the past few quarters, ranging between 6.07 and 7.43. This suggests that the company is effectively managing its inventory levels and turning over its inventory at a consistent pace.

2. Receivables turnover: The receivables turnover ratio reflects how quickly the company collects payments from its customers. United States Steel Corp. has seen fluctuations in its receivables turnover ratio, with values ranging from 8.88 to 12.88. A higher turnover ratio indicates more efficient credit control and collection policies, which can help improve cash flow and working capital management.

3. Payables turnover: The payables turnover ratio measures how quickly the company pays its suppliers. United States Steel Corp. has shown consistent payables turnover ratios between 88.26 and 117.32. A higher turnover ratio suggests that the company is managing its accounts payable effectively and possibly taking advantage of favorable credit terms, which can improve liquidity and working capital management.

4. Working capital turnover: The working capital turnover ratio indicates how efficiently the company is utilizing its working capital to generate sales revenue. United States Steel Corp. has maintained a relatively stable working capital turnover ratio, ranging between 5.08 and 6.03. A higher turnover ratio indicates better efficiency in utilizing working capital to support the company's operations and generate revenue.

Overall, United States Steel Corp. shows a good level of operational efficiency based on its activity ratios, with consistent performance in managing inventory, receivables, payables, and working capital turnover. These metrics suggest that the company is effectively managing its resources and generating revenue from its operational activities.

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Average number of days

United States Steel Corp.'s activity ratios, specifically the days of inventory on hand (DOH), days of sales outstanding (DSO), and number of days of payables, provide insight into the efficiency of the company's operations.

1. Days of Inventory on Hand (DOH):
- The DOH measures how long it takes for a company to turn its inventory into sales.
- The trend for United States Steel Corp.'s DOH over the past eight quarters shows some fluctuations, with a general decreasing trend from Q2 2022 to Q4 2023.
- The decrease in DOH indicates that the company is managing its inventory more efficiently, leading to lower days of inventory on hand, which is generally positive for working capital management.

2. Days of Sales Outstanding (DSO):
- The DSO ratio reflects the average number of days it takes for the company to collect revenue after a sale is made.
- United States Steel Corp.'s DSO has been fluctuating over the quarters, with occasional spikes in Q2 2022 and Q1 2023.
- A lower DSO implies faster collection of receivables, ensuring a steady cash flow. The trend for DSO shows some volatility, which may require attention to ensure timely collections.

3. Number of Days of Payables:
- This ratio indicates the number of days a company takes to pay its suppliers.
- United States Steel Corp.'s number of days of payables has remained relatively stable over the quarters, with slight variations.
- A lower number of days of payables suggests that the company is paying its suppliers more quickly, which could impact cash flow management and relationships with suppliers.

Overall, United States Steel Corp. should focus on optimizing its inventory management to reduce DOH further, maintaining a balance between DSO and number of days of payables to improve efficiency and working capital management.

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See also:

United States Steel Corporation Short-term (Operating) Activity Ratios (Quarterly Data)

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Long-term

United States Steel Corp.'s long-term activity ratios, namely the fixed asset turnover and total asset turnover, provide insight into how effectively the company is utilizing its assets to generate sales.

The fixed asset turnover ratio, which measures the efficiency of utilizing fixed assets to generate revenue, has shown a declining trend from Q1 2023 to Q4 2023, decreasing from 2.29 to 1.74. This indicates a decrease in the company's ability to generate sales relative to its investment in fixed assets over this period. The declining trend may suggest potential inefficiencies in the utilization of fixed assets or a decrease in sales generated from these assets.

On the other hand, the total asset turnover ratio, which reflects the efficiency of using all assets to generate sales, has also shown a downward trend over the same period, declining from 1.04 in Q1 2023 to 0.88 in Q4 2023. This indicates a decrease in the company's overall ability to generate sales relative to its total asset base. A decreasing total asset turnover ratio may suggest that the company is becoming less efficient in generating revenue from its total asset base or that the company's asset base is not being effectively utilized to drive sales.

In conclusion, the decreasing trends in both fixed asset turnover and total asset turnover ratios for United States Steel Corp. signal potential inefficiencies in asset utilization and sales generation, highlighting the need for further analysis and strategic adjustments to improve the company's operational efficiency and maximize revenue generation from its assets.

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See also:

United States Steel Corporation Long-term (Investment) Activity Ratios (Quarterly Data)