Acuity Brands Inc (AYI)

Short-term

Turnover ratios

Acuity Brands, Inc.'s activity ratios provide insight into the company's efficiency in managing its resources. The inventory turnover ratio indicates that in 2023, the company's inventory was turned over approximately 6.08 times during the year, up from 4.80 in 2022. This suggests an improvement in managing its inventory levels.

The receivables turnover ratio also improved, reaching 7.12 in 2023 compared to 6.02 in 2022, indicating that Acuity Brands, Inc. collected its receivables more effectively in 2023.

The payables turnover ratio increased to 7.84 in 2023, indicating that the company managed to pay its suppliers more frequently during the year, compared to 5.87 in 2022.

The working capital turnover ratio decreased to 4.94 in 2023 from 5.47 in 2022, signifying that the company generated $4.94 in revenue for each dollar of working capital, reflecting a decline in the efficiency of its working capital utilization.

Overall, the trends in these activity ratios suggest that Acuity Brands, Inc. improved its efficiency in managing inventory and collecting receivables in 2023, although there was a slight decline in working capital turnover. It also indicates that the company effectively managed its payments to suppliers, ultimately impacting its cash conversion cycle and working capital management.

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Average number of days

The activity ratios provide insights into Acuity Brands, Inc.'s management of inventory, accounts receivable, and accounts payable.

Days of inventory on hand (DOH) measures how many days it takes for the company to sell its inventory. Over the past five years, the DOH has fluctuated, with a decrease in the most recent year compared to the previous year. This could indicate a more efficient management of inventory, as the company is able to sell its inventory faster.

Days of sales outstanding (DSO) indicates the average number of days it takes for the company to collect revenue after a sale is made. The DSO has shown a slight decreasing trend over the past five years, indicating a more efficient collection of accounts receivable.

Number of days of payables measures the average number of days it takes the company to pay its suppliers. This ratio has fluctuated over the years, with a decrease in the most recent year. A decrease in this ratio can indicate that the company is taking longer to pay its bills, which may be beneficial for managing cash flow.

Overall, the trends in these activity ratios suggest that Acuity Brands, Inc. has made improvements in managing its inventory, accounts receivable, and accounts payable over the years, contributing to potential improvements in its working capital management.

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Long-term

The long-term activity ratios of Acuity Brands, Inc. provide insight into the company's efficiency in managing its fixed and total assets to generate sales. The fixed asset turnover indicates that the company generated $13.28 in sales for every $1 of fixed assets in 2023, a slight decrease from the previous year's $14.49. This suggests that the company's utilization of fixed assets to generate revenue has declined, although it remains relatively high.

The total asset turnover ratio also demonstrates a stable performance, with a slight increase from 1.15 in 2022 to 1.16 in 2023. This indicates that Acuity Brands generated $1.16 in sales for every $1 of total assets in 2023, showing consistent effectiveness in utilizing its total assets to generate revenue. Overall, while the fixed asset turnover has declined slightly, the total asset turnover has improved, indicating that the company has maintained efficiency in utilizing its assets to drive sales.