Albertsons Companies (ACI)

Short-term

Turnover ratios

The activity ratios for Albertsons Companies over the displayed periods reveal insights into the company's operational efficiency and asset management strategies.

Inventory Turnover:
The inventory turnover ratio demonstrates a relatively stable pattern with slight fluctuations, indicating efficient inventory management. The ratio predominantly remains within a narrow range, approximately from 10.58 to 12.16, suggesting the company generally sells and replenishes inventory roughly 11 times annually. Notably, there is an upward trend toward the latter periods, with percentages surpassing 11.5 and reaching 12.16 as of February 2025. This trend may reflect improved inventory management practices, increased sales speed, or efforts to optimize stock levels, thereby reducing excess inventory and associated holding costs.

Receivables Turnover:
Albertsons' receivables turnover exhibits variability, with figures ranging from 95.56 to around 130.78. The higher ratios imply a relatively swift collection process, while the declining trend observed after mid-2022 suggests a gradual extension in receivable collection periods or changes in credit terms. Periods such as May 2022 show elevated turnover ratios (around 130), indicating efficient receivables management, whereas subsequent periods, especially from November 2023 onward, display lower ratios (around 86–95), implying a slowdown in collection efficiency that could influence cash flow management.

Payables Turnover:
The payables turnover ratios fluctuate within a reasonable range, generally from 12.08 to 14.72. Notable increases are seen in May 2024 (14.72), indicating the company is taking longer to pay its suppliers or negotiating extended credit terms. Such a pattern may reflect strategic payment policies aimed at optimizing working capital or managing cash flows more effectively. The stability in this ratio over time signifies consistent supplier payment practices aligned with industry norms.

Working Capital Turnover:
The working capital turnover data show significant fluctuations, with some periods displaying extremely high ratios (e.g., 4,016.03 in February 2022) and others missing data altogether. The exceptional figure in February 2022 suggests a moment of heightened efficiency, potentially due to asset reductions or asset-light strategies at that time. However, missing data prevents a comprehensive trend analysis, and the large variations indicate periods of substantial fluctuations in working capital management practices or reporting anomalies during certain intervals.

In summary, Albertsons Companies' activity ratios highlight an overall stable inventory management approach with incremental improvements, a generally efficient receivables collection process that experienced some slowdown, and a consistent payables strategy with occasional extensions. The anomalies and fluctuations within these ratios suggest that the company adapts its operational practices in response to internal and external factors, aiming to optimize working capital and ensure operational efficiency.

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Average number of days

The activity ratios in terms of inventory management, receivables collection, and payment to suppliers for Albertsons Companies over the analyzed period demonstrate moderate stability with minor fluctuations.

Days of Inventory on Hand (DOH):
The DOH metrics indicate that Albertsons maintains inventory levels roughly between 30 to 34 days, with slight variation over time. The average DOH hovers around 31 to 33 days, suggesting a consistent inventory turnover cycle typical for grocery retail operations, balancing between sufficient stock availability and inventory carrying costs. Notably, the most recent data points from February 2024 to February 2025 show DOH values around 31 to 32 days, with a slight decrease to approximately 30 days at the latest observation, potentially indicating improved inventory efficiency or adjustments in inventory management strategies.

Days of Sales Outstanding (DSO):
The DSO figures are consistently low, averaging around 2.9 to 4.2 days throughout the period. The minimal fluctuation and generally decreasing trend in recent periods imply that Albertsons collects receivables very quickly, characteristic of retail operations where cash sales dominate. The slight upward trend in DSO towards the end of the period suggests a minor shift toward longer collection periods but remains within an efficient collection window.

Number of Days of Payables:
The payables period spans approximately 24 to 30 days. Initially hovering around 26 days, the data exhibits some variability but generally remains in the mid-20s. The trend indicates that Albertsons extends its payment cycles to suppliers roughly 26 days on average, with occasional fluctuations. A slight decrease below 25 days at certain points reflects efforts to optimize cash flow without adversely impacting supplier relationships. The stabilization of payables around 25 to 27 days in recent periods underscores a balanced approach to managing liabilities.

Overall Interpretation:
Albertsons Companies demonstrates a stable activity profile, with inventory levels maintained efficiently within industry standards, rapid receivables collection cycle, and moderate payment periods to suppliers. The slight downward trend in DOH and the consistency in DSO and payable periods suggest ongoing efforts to optimize working capital management. The ratios collectively portray a company effectively managing its operational cycle, balancing inventory availability, receivables, and payables to sustain liquidity and operational efficiency.

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Long-term

The analysis of Albertsons Companies' long-term activity ratios over the specified periods reveals insights into the company's utilization of its fixed assets and total assets in generating sales.

Fixed Asset Turnover Ratio:
This ratio indicates how effectively the company is leveraging its fixed assets—primarily property, plant, and equipment—to generate sales revenue. Between May 31, 2020, and May 31, 2022, the fixed asset turnover showed a relatively stable trend, ranging from 4.47 to 4.94, with minor fluctuations. A significant rise occurred on August 31, 2022, reaching 8.30, and peaking at 8.44 on November 30, 2022. This sudden increase suggests a substantial improvement in the efficiency with which fixed assets are used to produce revenues, possibly due to operational efficiencies, asset reorganization, or sale of underutilized assets. Following this peak, the ratio declined to approximately 5.10 by February 28, 2023, and remained relatively stable around 5.12 to 5.14 through May and August 2023. The absence of data beyond November 2023 limits further trend analysis.

Total Asset Turnover Ratio:
This ratio measures how effectively the total assets (including current and non-current assets) are employed to generate sales. From the beginning of the period through May 31, 2022, the ratio remained relatively stable, fluctuating narrowly around 2.52 to 2.64. A notable increase is observed on February 28, 2023, when the ratio rose to 2.97, indicating improved overall asset utilization. Subsequently, the ratio maintained a level just below 3.00, reaching 3.05 on May 31, 2024, and stabilizing close to 3.00 through August and November 2024, with the latest available data from February 28, 2025, remaining consistent at 3.00.

Summary:
Over the observed periods, the company's fixed asset turnover demonstrated stability with a pronounced peak around late 2022, suggesting a temporary improvement in fixed asset efficiency. Conversely, the total asset turnover remained relatively steady with a modest upward trend in early 2023, reflecting general improvements in asset utilization efficiency. Overall, these ratios imply that Albertsons Companies experienced periods of increased operational efficiency, particularly around late 2022 for fixed assets, while maintaining consistent performance in total asset utilization across the broader period.