XPO Logistics Inc (XPO)

Short-term

Turnover ratios

Based on the provided data, we can analyze the activity ratios of XPO Logistics Inc as follows:

1. Inventory Turnover:
- The inventory turnover ratio measures how efficiently a company manages its inventory. XPO Logistics Inc's inventory turnover was not available for 2020 and 2023. In 2021 and 2022, the company achieved relatively high inventory turnover ratios of 414.62 and 361.47, respectively. This indicates that XPO Logistics was able to sell and replace its inventory multiple times during those years.

2. Receivables Turnover:
- The receivables turnover ratio reflects how quickly a company collects payments from its customers. XPO Logistics Inc's receivables turnover increased steadily from 2.14 in 2020 to 7.70 in 2024. This suggests that the company improved its efficiency in collecting receivables over the years.

3. Payables Turnover:
- The payables turnover ratio measures how quickly a company pays its suppliers. XPO Logistics Inc's payables turnover fluctuated during the years, from 12.72 in 2020 to 8.59 in 2024. A decreasing payables turnover ratio may indicate that the company is taking longer to pay its suppliers.

4. Working Capital Turnover:
- The working capital turnover ratio shows how effectively a company utilizes its working capital to generate sales. XPO Logistics Inc's working capital turnover was significantly high in 2023 at 2,581.33, suggesting that the company generated a substantial amount of sales relative to its working capital during that year.

Overall, based on the trends observed in these activity ratios, XPO Logistics Inc demonstrated efficiency in managing its inventory and collecting receivables, while the payables turnover fluctuated. The working capital turnover ratio spiked in 2023, indicating a particularly strong performance in leveraging working capital to drive sales that year.

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Average number of days

The activity ratios of XPO Logistics Inc provide insights into how efficiently the company manages its operations.

1. Days of Inventory on Hand (DOH):
- In 2021, XPO Logistics held inventory for approximately 0.88 days, indicating a rapid turnover of inventory.
- The following year, the DOH increased slightly to 1.01 days, suggesting a small decrease in the efficiency of inventory management.
- For 2020, 2023, and 2024, specific data for DOH is not available.

2. Days of Sales Outstanding (DSO):
- XPO Logistics had a DSO of 170.78 days in 2020, which decreased significantly to 106.68 days in 2021, and further improved to 45.12 days in 2022.
- The DSO remained relatively stable in 2023 and 2024, standing at 45.86 days and 47.42 days, respectively. Lower DSO values typically indicate more efficient collection of receivables.

3. Number of Days of Payables:
- XPO Logistics took 28.68 days to pay its payables in 2020, which improved to 17.57 days in 2021, indicating a more efficient payment cycle.
- However, in 2022, the number of days of payables increased to 30.95 days, potentially signifying a slowing down of payment to suppliers.
- By 2023 and 2024, the number of days of payables continued to rise, reaching 49.98 days and 42.47 days, respectively. A longer payables period can provide a company with more flexibility in managing cash flow.

Overall, XPO Logistics demonstrated improvements in inventory turnover and receivables collection efficiency over the years. However, the payment cycle to suppliers showed some variability, which may warrant further investigation to ensure sustainable relationships with vendors while optimizing working capital management.

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Long-term

XPO Logistics Inc's fixed asset turnover has shown varying trends over the period analyzed. It increased from 3.26 in December 31, 2020, to a peak of 4.30 in December 31, 2021, and then slightly declined to 4.21 in December 31, 2022. However, there was a noticeable decrease in fixed asset turnover to 2.52 in December 31, 2023, and a further decline to 2.38 in December 31, 2024.

On the other hand, the total asset turnover for XPO Logistics Inc has shown a more consistent improvement over the same period. It started at 0.38 in December 31, 2020, and steadily increased to 0.83 in December 31, 2021, 1.23 in December 31, 2022, and 1.03 in December 31, 2023. It slightly dipped to 1.05 in December 31, 2024.

The fixed asset turnover ratio measures how efficiently a company utilizes its fixed assets to generate sales, and the varying trend observed in XPO Logistics Inc's fixed asset turnover may indicate changes in the company's asset utilization efficiency. Conversely, the total asset turnover ratio assesses the company's ability to generate sales from all its assets, and the consistent improvement in this ratio suggests that XPO Logistics Inc has been effectively utilizing its total assets to generate revenue over the years.