American Woodmark Corporation (AMWD)

Short-term

Turnover ratios

American Woodmark Corporation's activity ratios indicate the efficiency of its operations in managing inventory, receivables, payables, and working capital turnover over the past five years.

1. Inventory turnover: The company's inventory turnover has been fluctuating but generally within a stable range. The ratio indicates that the company is able to sell its inventory approximately 9 to 12 times per year, with a peak in 2019. This suggests that the company manages its inventory well and has a relatively quick turnover.

2. Receivables turnover: American Woodmark Corporation has shown a varying trend in receivables turnover, with the ratio ranging from around 12 to 17 times per year. The higher turnover in recent years indicates that the company is efficient in collecting its receivables, which is a positive sign of effective credit management.

3. Payables turnover: The company's payables turnover ratio has also fluctuated over the years, but generally decreasing. This means that the company is taking longer to pay its suppliers in recent years compared to previous years. A lower payables turnover ratio can indicate either improved creditor relationships or potential financial constraints.

4. Working capital turnover: The working capital turnover ratio measures how efficiently the company generates revenue with its working capital. The ratio has also shown fluctuations over the years, ranging from around 9 to 11 times. A higher turnover indicates that the company is effectively utilizing its working capital to generate sales.

Overall, American Woodmark Corporation's activity ratios suggest that the company has been managing its inventory, receivables, payables, and working capital efficiently. However, the fluctuations in these ratios over the years warrant further investigation to understand the underlying factors impacting the company's operational efficiency.

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Average number of days

The activity ratios of American Woodmark Corporation suggest changes in the company's efficiency in managing its inventory, receivables, and payables over the past five years.

1. Days of Inventory on Hand (DOH):
- The company has shown fluctuations in its inventory management efficiency over the years.
- In 2024, the Days of Inventory on Hand decreased to 39.51 days from 40.74 days in 2023, indicating better control over inventory levels.
- Compared to 2019, the DOH has increased, indicating that the company is holding more inventory on average.

2. Days of Sales Outstanding (DSO):
- American Woodmark Corporation has shown a mixed trend in managing its receivables efficiently.
- In 2024, the Days of Sales Outstanding increased to 23.23 days from 21.05 days in 2023, suggesting a potential delay in collecting receivables.
- The DSO in 2024 is lower than that in 2022, which indicates a possible improvement in collecting sales proceeds.

3. Number of Days of Payables:
- The company has experienced fluctuations in the number of days of payables, affecting its ability to meet its payment obligations.
- In 2024, the Number of Days of Payables increased to 16.01 days from 13.65 days in 2023, indicating a longer time taken to settle payables.
- Compared to 2019, the payables period has extended, suggesting a potential strain on the company's working capital management.

Overall, American Woodmark Corporation's activity ratios reflect varying levels of efficiency in managing inventory, receivables, and payables, which can impact its liquidity, cash flow, and overall operational performance. It is essential for the company to maintain a balance in these ratios to ensure optimal working capital management and financial stability.

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Long-term

The fixed asset turnover ratio for American Woodmark Corporation has been quite stable over the last five years, ranging from 6.78 to 9.42. This indicates that the company generated between $6.78 and $9.42 in sales for every dollar invested in fixed assets during the period. A higher fixed asset turnover ratio generally signifies better efficiency in utilizing fixed assets to generate revenue.

On the other hand, the total asset turnover ratio shows a fluctuating trend, with values varying between 1.05 and 1.36. This ratio reflects the company's ability to generate sales in relation to its total assets. A higher total asset turnover ratio suggests that the company is more efficient in utilizing its total assets to generate sales.

Overall, American Woodmark Corporation appears to have efficiently utilized its fixed assets in generating revenue consistently over the years. However, the fluctuating trend in the total asset turnover ratio indicates some variability in the company's overall asset utilization efficiency. Further analysis and comparison with industry benchmarks may provide additional insights into the company's long-term activity performance.