American Woodmark Corporation (AMWD)

Short-term

Turnover ratios

The activity ratios of American Woodmark Corporation over the specified periods reveal trends in inventory management, receivables efficiency, payables practices, and overall working capital utilization.

Inventory Turnover:
The inventory turnover ratio shows a fluctuation with an overall decrease and subsequent recovery. Specifically, it decreased from 9.01 in 2021 to 7.14 in 2022, indicating a slowdown in inventory sales or increased holdings. However, it rebounded sharply to 8.96 in 2023 and further increased slightly to 9.24 in 2024, before declining again to 7.88 in 2025. The recent decline signifies a potential increase in inventory levels relative to sales, which could suggest either inventory buildup or challenges in inventory turnover efficiency.

Receivables Turnover:
The receivables turnover ratio remained relatively stable between 2021 and 2022 at approximately 11.87 and 11.83, respectively. In 2023, it significantly increased to 17.34, suggesting improved collection efficiency or shorter receivable cycles. This higher turnover persisted in 2024 at 13.98, though slightly lower, and subsequently increased again in 2025 to 15.38. Overall, this indicates an enhancement in receivables management over the period, with a trend toward quicker cash collection from customers.

Payables Turnover:
Payables turnover fluctuates markedly across the periods. It was 15.55 in 2021 and slightly decreased to 14.64 in 2022. However, a sharp increase occurred in 2023 to 26.73, indicating the company paid its suppliers more rapidly or adopted a different payment policy. In 2024, the ratio decreased to 22.80, still higher than the earlier years, suggesting a more aggressive payables strategy or improved cash flow management. By 2025, payables turnover declined sharply to 9.90, implying a slower payment cycle or extended payment terms with suppliers, which could be a strategic decision to preserve cash or a response to changing supplier agreements.

Working Capital Turnover:
The working capital turnover ratio exhibits fluctuations but remains within a range that indicates the efficiency of using working capital to generate sales. It decreased slightly from 9.20 in 2021 to 8.74 in 2022, then increased significantly to 10.87 in 2023, reflecting more efficient utilization of working capital during that year. The ratio decreased somewhat in 2024 to 8.93 but rose again in 2025 to 9.42, maintaining a level close to the 2021 figure. These changes suggest periods of improved operational efficiency, notably around 2023, with some stabilization afterward.

Summary:
American Woodmark demonstrated significant improvements in receivables management with increased receivables turnover ratios, indicating more efficient cash collection processes. Inventory management saw variability, with periods of increased efficiency interspersed with inventory buildup. The payables policy experienced notable fluctuations, shifting from prompt payments to extended terms, possibly to optimize liquidity. Overall, the working capital turnover indicates periods of enhanced operational efficiency, especially in 2023, with a tendency toward stabilization in subsequent years.

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Average number of days

The activity ratios for American Woodmark Corporation, specifically the Days of Inventory on Hand (DOH), Days of Sales Outstanding (DSO), and Number of Days of Payables, demonstrate notable trends over the period from April 2021 to April 2025.

Days of Inventory on Hand (DOH):
The data indicates a fluctuation in inventory holding periods over the years. In April 2021, DOH was approximately 40.52 days. This increased significantly in April 2022 to 51.09 days, suggesting that inventory was held longer during that period. Subsequently, there was a reduction to 40.74 days in April 2023, closely aligning with the 2021 level. The decline continued to approximately 39.51 days in April 2024, indicating a continued trend of inventory management efficiency. However, by April 2025, the DOH increased again to 46.34 days, signaling a reversal and a period of increased inventory holding.

Days of Sales Outstanding (DSO):
The receivables collection period portrays a decreasing trend from April 2021 to April 2023. Starting at around 30.74 days in 2021, DSO remained relatively stable in 2022 at approximately 30.85 days, but then exhibited a significant reduction to 21.05 days by April 2023. This suggests improved receivables collection efficiency during this period. From April 2023 onwards, the DSO increased slightly to 26.10 days in April 2024, and then slightly decreased again to 23.74 days in April 2025, indicating a stabilization within a relatively narrow range and suggesting consistent credit collection practices.

Number of Days of Payables:
The payables period shows considerable variation. In April 2021, payables were settled in approximately 23.47 days, with a slight increase in 2022 to 24.94 days. In April 2023, the payables period decreased sharply to 13.65 days, indicating faster payments to suppliers. This period then increased to 16.01 days in April 2024, reflecting a moderate extension of payment terms. However, by April 2025, the payables duration significantly extended to 36.86 days, implying a strategic delay in payments, possibly to optimize cash flow or manage working capital.

Summary of Trends:
- The inventory holding period exhibited fluctuations, with a notable peak in 2022 and an increase again in 2025, which could signal changes in inventory management efficacy or supply chain conditions.
- The receivables collection period improved markedly by 2023, reaching its lowest point, then stabilized, reflecting enhanced collection efficiency.
- The payables period varied significantly, with a marked extension in 2025, potentially indicating deliberate terms management to preserve liquidity or negotiate better terms.

Overall, the activity ratios suggest that American Woodmark has experienced periods of tightening and loosening in inventory management, receivables collection, and payables strategy, reflecting a responsive approach to operational conditions and cash flow management across these years.

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Long-term

The long-term activity ratios for American Woodmark Corporation exhibit notable fluctuations over the specified period, reflecting changes in the company's utilization of its assets to generate sales.

Fixed Asset Turnover Ratio:

- The ratio decreased from 8.55 in the fiscal year ending April 30, 2021, to 5.77 in April 2022, indicating a decline in efficiency in utilizing fixed assets to generate sales during that period.
- This downward trend reversed in the subsequent year, with the ratio increasing to 9.42 in April 2023. This suggests a significant improvement in the company’s ability to generate sales from its fixed assets, potentially due to better asset management or increased production efficiency.
- For the fiscal years ending April 2024 and April 2025, data are not available, but based on the observed trend, the ratio's pattern prior to 2024 indicates a period of recovery and efficiency gains.

Total Asset Turnover Ratio:

- The total asset turnover ratio shows a steady increase from 1.07 in April 2021 to 1.14 in April 2022 and further to 1.36 in April 2023, representing improved asset utilization and more effective use of total assets to generate sales.
- In the subsequent years, the ratio experienced a slight decline to 1.16 in April 2024 and then to 1.09 in April 2025, suggesting a some reduction in overall asset efficiency, possibly due to asset buildup, reinvestment, or operational adjustments.

Overall, American Woodmark demonstrated a period of declining fixed asset efficiency in 2022, followed by a substantial rebound in 2023. The total asset turnover ratio consistently improved until 2023 but experienced a marginal decrease thereafter. These shifts may reflect strategic changes, investment cycles, or operational efficiencies impacting how effectively the company utilizes its fixed and total assets to generate sales over time.