Avery Dennison Corp (AVY)

Short-term

Turnover ratios

Based on the provided data, we can analyze Avery Dennison Corp's activity ratios as follows:

1. Inventory Turnover:
- The inventory turnover ratio measures how efficiently a company manages its inventory. Avery Dennison Corp's inventory turnover has been relatively stable over the years, decreasing slightly from 7.04 in 2020 to 6.36 in 2024. This indicates that the company is selling its inventory approximately 6 to 7 times a year.

2. Receivables Turnover:
- The receivables turnover ratio shows how quickly a company collects its accounts receivables. In this case, the data shows that receivables turnover information is not available for any of the years provided. This could indicate that the company does not provide credit sales or the data might be missing.

3. Payables Turnover:
- The payables turnover ratio reflects how fast a company pays off its suppliers. Similar to receivables turnover, the payables turnover data is not available for any of the years provided, which makes it challenging to assess the efficiency of Avery Dennison Corp in managing its payables.

4. Working Capital Turnover:
- The working capital turnover ratio measures how effectively a company is using its working capital to generate sales. Avery Dennison Corp's working capital turnover has shown significant fluctuations, with a notable increase from 14.22 in 2020 to 86.68 in 2023, indicating that the company is efficiently utilizing its working capital to drive sales growth. However, a slight decrease to 40.52 in 2024 might suggest some changes in the company's working capital management strategies.

In conclusion, while Avery Dennison Corp demonstrates stable inventory turnover and improved working capital turnover, the absence of data on receivables and payables turnovers limits a comprehensive analysis of the company's overall efficiency in managing its assets and liabilities.

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Average number of days

Based on the provided data for Avery Dennison Corp, we can analyze the activity ratios as follows:

1. Days of Inventory on Hand (DOH):
- The trend in the DOH ratio shows an increase from 51.86 days on December 31, 2020, to 57.35 days on December 31, 2024.
- This indicates that Avery Dennison is taking longer to sell its inventory over the years, which can tie up capital and may impact profitability.

2. Days of Sales Outstanding (DSO):
- The DSO data is not provided for any of the years, which makes it challenging to assess how long it takes the company to collect its accounts receivable.
- Without this information, it is difficult to gauge the efficiency of Avery Dennison in managing its receivables and cash flow from sales.

3. Number of Days of Payables:
- Similar to DSO, data on the number of days of payables is also unavailable for the years provided.
- Understanding the payment terms with suppliers and how long the company takes to pay its bills is crucial for assessing its liquidity and relationships with vendors.

In conclusion, while the DOH ratio suggests a trend of increasing inventory holding periods for Avery Dennison, the lack of data on DSO and payables days limits the comprehensive analysis of the company's activity ratios. Further information on these metrics would provide a more detailed view of the company's operational efficiency and working capital management.

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Long-term

Avery Dennison Corp's fixed asset turnover ratio, which measures how efficiently the company generates revenue from its fixed assets, has shown a positive trend over the past few years. The ratio increased from 5.19 in 2020 to 5.69 in 2021 and further to 5.87 in 2022. This indicates that the company has been able to effectively utilize its fixed assets to generate sales.

However, there is missing data for 2023 and 2024, so it is challenging to assess the trend for those years.

In terms of total asset turnover, which evaluates the company's ability to generate sales relative to its total assets, Avery Dennison Corp experienced a slight decline from 1.14 in 2020 to 1.05 in 2021. The ratio then improved to 1.14 in 2022 but dropped to 1.02 in 2023 before recovering to 1.04 in 2024.

Overall, while the fixed asset turnover ratio demonstrates efficient utilization of fixed assets, the total asset turnover ratio indicates fluctuations in the company's ability to generate sales relative to its total assets. Monitoring these ratios over time can provide insights into the effectiveness of Avery Dennison Corp's asset management strategies and operational performance.