American Woodmark Corporation (AMWD)

Short-term

Turnover ratios

The activity ratios of American Woodmark Corporation provide insights into the company’s operational efficiency over various periods. Analyzing these ratios yields the following observations:

Inventory Turnover:
The inventory turnover ratio exhibited fluctuations throughout the period. It was relatively high at 10.25 times on July 31, 2020, indicating efficient inventory management. The ratio experienced some decline, reaching a low of approximately 6.87 times on July 31, 2022, suggesting increased inventory holdings or slower sales. Subsequently, the ratio showed improvement, rising to 9.80 times by July 31, 2023, and remaining near similar levels into October 2023 at 9.56. The partial recovery indicates better inventory utilization, though it did not fully return to the initial pre-pandemic levels. The ratios from early 2024 onward fluctuate around the 8.0-9.0 range, reflecting a stabilized inventory turnover rate, but still below the initial peaks.

Receivables Turnover:
Receivables turnover figures reflect improved collection efficiency over time. It started at 13.08 times as of July 31, 2020, and experienced some variability but maintained generally high levels, peaking at 17.72 times on January 31, 2023. This elevated ratio signifies quicker collection periods in recent years, with the latest reported value of 15.38 times on April 30, 2025, still indicating efficient receivables management compared to earlier periods. Fluctuations are evident, possibly linked to changes in credit policies or customer payment behaviors, but overall, the trend suggests a trend towards tighter receivables collection.

Payables Turnover:
The payables turnover ratio demonstrates variability, indicating shifts in how promptly the company pays its suppliers. Initially, it was relatively high at 20.66 times on July 31, 2020, implying rapid payment cycles. This ratio decreased substantially to 9.90 times on April 30, 2025, indicating a shift towards longer payment periods, which could be a strategic decision to optimize cash flow or reflect changes in supplier payment terms. Notably, there was a significant spike to 29.78 times on January 31, 2023, suggesting a shorter average payment period during that time, potentially due to supplier negotiations or contractual changes.

Working Capital Turnover:
This ratio measures the efficiency of the company's use of working capital. It showed steady fluctuation within a range of approximately 7.68 to 11.47 times. The highest value of 11.47 was recorded on July 31, 2021, indicating highly efficient utilization of working capital during that period. The ratio declined afterward but remained relatively stable, averaging around 8.7 to 9.4 in recent periods, implying consistent but moderate efficiency in managing working capital over time.

Summary:
Overall, American Woodmark’s activity ratios reflect a company that has experienced both challenges and improvements in operational efficiency over the analyzed period. Inventory turnover declines initially but show signs of recovery, while receivables management has become more aggressive with faster collection times. Payables turnover exhibits significant variability, possibly indicating strategic shifts in payment policies. The working capital turnover has remained relatively stable, suggesting ongoing efficiency in resource utilization. These trends collectively illustrate efforts to optimize working capital management and operational performance amid changing economic conditions.

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Average number of days

The activity ratios for American Woodmark Corporation, based on the provided data, reveal notable trends and fluctuations across key operational metrics.

Days of Inventory on Hand (DOH):
From July 31, 2020, to October 31, 2023, the DOH showed an increasing trend, rising from approximately 35.62 days to a peak of 53.11 days during July 2022. This indicates that the company was holding inventory for a longer duration, potentially due to strategic inventory buildup, supply chain considerations, or slower inventory turnover. After reaching this peak, the DOH experienced a decline, falling to approximately 37.26 days by July 2023, suggesting efforts to reduce inventory levels or improve inventory management. The subsequent periods show fluctuations around the 38-day mark, maintaining relatively stable inventory holding periods through October 2024 and into early 2025, although slightly higher than the levels observed pre-2022.

Days of Sales Outstanding (DSO):
The DSO exhibits a generally decreasing trend from July 2020 (27.90 days) to a low of approximately 20.59 days in January 2023, indicating faster collection of receivables during this period. This improvement suggests enhanced credit and collection processes. Post-2023, the DSO stabilizes around 21 to 26 days, with minor fluctuations, implying consistent receivables management although slightly less optimized than the earlier period. The increase observed toward October 2024 and April 2025 (up to approximately 27.09 days) may reflect changes in customer payment terms or collection cycles.

Number of Days of Payables:
The payables period generally fluctuated within a range of approximately 12 to 25 days. Notably, from July 2020 to October 2023, the number of days payable remained relatively steady, typically between 17 to 24 days, signaling consistent creditor payment practices. However, a significant change appears in April 2024 with the payable days increasing sharply to approximately 36.86 days, implying the company extended its payment terms considerably during this period. This abrupt increase suggests a shift in payment strategy, possibly to conserve cash or due to negotiations with suppliers. Prior to this spike, the payable days had been maintained at lower levels.

Summary:
The activity ratios depict a company that experienced a period of inventory build-up through 2021 and 2022, reaching peaks in inventory days, before actively reducing inventory levels in 2023. The receivables collection efforts improved markedly, reaching faster collection periods by early 2023, with stability maintained subsequently. Accounts payable practices were consistent until early 2024, when a strategic decision to extend payment terms resulted in a significant increase in payable days. These trends collectively reflect adjustments in operational efficiency, supply chain management, and financial strategy over the analyzed periods.

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Long-term

The analysis of American Woodmark Corporation’s long-term activity ratios, specifically the Fixed Asset Turnover and Total Asset Turnover, reveals notable trends and fluctuations over the specified periods.

Fixed Asset Turnover:
The Fixed Asset Turnover ratio demonstrates considerable variability, with notable peaks and declines. It escalated from 4.96 on July 31, 2020, to a high of 8.55 as of April 30, 2021, indicating an improved efficiency in utilizing fixed assets to generate sales. This increase suggests that the company was effectively leveraging its fixed assets during this period. Subsequently, the ratio declined to 5.48 on July 31, 2021, signaling a decrease in fixed asset utilization efficiency. Following this decline, the ratio rebounded sharply, reaching 8.63 on October 31, 2021, and fluctuating thereafter. More recently, the ratio increased steadily, reaching 9.42 by April 30, 2023, which marks an improvement in fixed asset efficiency relative to prior periods. The ratio declined to 9.03 by July 31, 2023. The absence of data beyond October 2023 constrains further analysis into subsequent periods.

Total Asset Turnover:
The Total Asset Turnover ratio exhibits a generally upward trend from 0.97 on July 31, 2020, to a peak of 1.36 on April 30, 2023. This trend indicates enhanced overall asset utilization to generate sales over time. The ratio remained relatively stable with minor fluctuations, decreasing slightly after April 2023 to 1.32 in July 2023, and declining further to 1.09 by April 30, 2025. The overall progression suggests a period of increasing efficiency in using total assets, with a recent downward trend indicating perhaps a deceleration in asset productivity or increased asset base not proportionally matched by sales growth.

Summary:
American Woodmark’s long-term activity ratios reflect periods of rising efficiency, particularly notable in fixed asset utilization during the 2021 period, followed by fluctuations that may correspond to operational or strategic changes. The overall upward trend in total asset turnover up to early 2023 signals improved asset management, though recent declines suggest potential challenges in maintaining this efficiency or changes in asset composition. The data underscores the company’s variable asset utilization capabilities over the analyzed timeframe, with recent trends indicating a possible slowdown in asset productivity growth.