Xpel Inc (XPEL)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Inventory turnover | 3.14 | 3.41 | 4.27 | 6.10 | 7.51 |
| Receivables turnover | 15.94 | 21.87 | 18.77 | 15.93 | 17.91 |
| Payables turnover | 13.80 | 16.45 | 8.80 | 10.51 | 15.28 |
| Working capital turnover | 3.59 | 4.05 | 6.05 | 3.81 | 5.30 |
1. Inventory turnover:
- XPEL Inc's inventory turnover has gradually decreased from 5.71 in 2019 to 2.20 in 2023.
- This indicates that the company is selling its inventory at a slower rate, which could potentially lead to obsolete or excess inventory.
2. Receivables turnover:
- The receivables turnover ratio has fluctuated over the years, ranging from 15.98 in 2023 to 22.00 in 2022.
- A higher turnover ratio indicates that XPEL Inc is collecting its accounts receivable more efficiently.
3. Payables turnover:
- XPEL Inc's payables turnover has shown variability, with the highest ratio in 2019 at 11.61 and the lowest in 2021 at 6.62.
- A lower payables turnover ratio can indicate that the company is taking longer to pay its suppliers or may have renegotiated more favorable payment terms.
4. Working capital turnover:
- The working capital turnover ratio has also shown fluctuations for XPEL Inc, ranging from 3.60 in 2023 to 6.06 in 2021.
- A higher turnover ratio suggests that the company is generating more revenue from its working capital, reflecting efficient utilization of resources.
In summary, XPEL Inc has experienced varying levels of efficiency in managing its inventory, receivables, payables, and working capital over the past five years. Further analysis of the trends and reasons behind these fluctuations could provide insights into the company's operational performance and financial health.
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 | 116.26 | 107.16 | 85.53 | 59.80 | 48.61 |
| Days of sales outstanding (DSO) | days | 22.90 | 16.69 | 19.44 | 22.92 | 20.38 |
| Number of days of payables | days | 26.45 | 22.19 | 41.46 | 34.72 | 23.89 |
Activity ratios such as Days of Inventory on Hand (DOH), Days of Sales Outstanding (DSO), and Number of Days of Payables provide valuable insights into how efficiently XPEL Inc is managing its working capital and operating cycle.
1. Days of Inventory on Hand (DOH): This ratio measures how long, on average, XPEL Inc holds onto its inventory before selling it. The trend shows a gradual increase in the number of days over the past five years, indicating a potential slowdown in inventory turnover. This could suggest challenges in managing inventory levels efficiently or potential issues with demand forecasting.
2. Days of Sales Outstanding (DSO): DSO represents the average number of days it takes XPEL Inc to collect revenue after making a sale. The trend here has been fluctuating, with a slight increase in 2023 compared to 2022. This may indicate a slower collection process, leading to a higher DSO, which can tie up cash flow and potentially impact liquidity.
3. Number of Days of Payables: This ratio reflects the average number of days XPEL Inc takes to pay its suppliers. The trend shows variability over the years, with an increase in 2021 followed by a decrease in 2023 compared to 2022. A longer period of paying suppliers may provide XPEL Inc with more time to generate revenue from sales before settling its liabilities, potentially improving cash flow management.
In conclusion, the analysis of XPEL Inc's activity ratios suggests potential challenges in managing inventory levels, collecting receivables efficiently, and optimizing payment terms with suppliers. It would be essential for the company to focus on improving inventory turnover, reducing DSO, and effectively managing payables to enhance working capital efficiency and overall financial performance.
Long-term
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Fixed asset turnover | 23.28 | 22.67 | 26.13 | 33.65 | 32.33 |
| Total asset turnover | 1.57 | 1.67 | 1.61 | 1.89 | 2.52 |
XPEL Inc's fixed asset turnover has shown a slightly increasing trend over the past five years, indicating that the company has become more efficient in generating sales revenue from its fixed assets. However, it is important to note that the fixed asset turnover ratio has decreased from 2021 to 2022 before increasing again in 2023.
In contrast, the total asset turnover ratio has experienced a decreasing trend over the same period. This suggests that XPEL Inc has become less efficient in generating sales revenue from its total assets. The significant drop in total asset turnover from 2019 to 2020 highlights a potential inefficiency in asset utilization during that period.
Overall, it is evident that while XPEL Inc has shown improvements in generating sales from its fixed assets, there is a need for the company to focus on optimizing the utilization of its total assets to improve its overall operational efficiency and profitability.