AutoZone Inc (AZO)
Activity ratios
Short-term
Turnover ratios
| Aug 26, 2023 | Aug 27, 2022 | Aug 28, 2021 | Aug 29, 2020 | Aug 31, 2019 | |
|---|---|---|---|---|---|
| Inventory turnover | 1.45 | 1.38 | 1.49 | 1.31 | 1.27 |
| Receivables turnover | 33.55 | 32.19 | 38.66 | 34.63 | 38.39 |
| Payables turnover | 1.16 | 1.07 | 1.15 | 1.14 | 1.13 |
| Working capital turnover | — | — | — | 23.89 | — |
Autozone Inc.'s activity ratios provide insights into how efficiently the company manages its assets and liabilities. The inventory turnover ratio indicates the number of times the company's inventory is sold and replaced over a given period. Autozone's inventory turnover has shown a slightly increasing trend from 1.27 in 2019 to 1.45 in 2023, indicating that the company has been more efficient in managing its inventory.
The receivables turnover ratio reflects how effectively the company collects its credit sales from customers. Autozone's receivables turnover has remained relatively stable over the years, ranging between 32.19 and 38.66. This suggests that the company has maintained a consistent approach in collecting payments from its customers.
The payables turnover ratio measures how efficiently the company pays its suppliers. Autozone's payables turnover has also exhibited stability, with values fluctuating slightly between 1.07 and 1.16. This indicates that the company has been able to maintain a steady pace in managing its payment obligations to suppliers.
The working capital turnover ratio, however, is not available for the most recent years; it was 23.89 in 2020. This ratio provides an indication of how effectively the company utilizes its working capital to generate sales. Unfortunately, without the most recent data, it is challenging to assess the trend and make a conclusive analysis of Autozone's performance in this aspect.
In summary, Autozone Inc. has generally demonstrated efficiency in managing its inventory, receivables, and payables, as indicated by the stability and slight improvements in its activity ratios over the past few years. However, further analysis and comparison with industry benchmarks would provide a more comprehensive evaluation of the company's performance in this area.
Average number of days
| Aug 26, 2023 | Aug 27, 2022 | Aug 28, 2021 | Aug 29, 2020 | Aug 31, 2019 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 250.86 | 264.52 | 245.02 | 278.57 | 286.70 |
| Days of sales outstanding (DSO) | days | 10.88 | 11.34 | 9.44 | 10.54 | 9.51 |
| Number of days of payables | days | 313.41 | 342.56 | 317.58 | 321.10 | 322.93 |
Autozone Inc.'s activity ratios indicate its efficiency in managing inventory, collecting receivables, and paying its suppliers. The "Days of Inventory on Hand" (DOH) measure shows that in 2023, the company held inventory for an average of 250.86 days, a slight improvement from the previous year but still higher than earlier years. This suggests that Autozone has been able to turn its inventory over more quickly, which is a positive signal for operational and cash flow efficiency.
The "Days of Sales Outstanding" (DSO) ratio indicates the average number of days it takes for Autozone to collect its accounts receivable. The decrease in DSO from 11.34 days in 2022 to 10.88 days in 2023 demonstrates that the company has been improving its collection process, converting sales into cash more quickly.
Lastly, the "Number of Days of Payables" measures the company's ability to manage its trade credit. The decrease from 342.56 days in 2022 to 313.41 days in 2023 indicates that Autozone has been able to negotiate more favorable credit terms with its suppliers, which can positively impact cash flow and working capital management.
Overall, these activity ratios demonstrate that Autozone Inc. has been effectively managing its inventory, receivables, and payables in 2023, improving its operational efficiency and potentially enhancing its financial performance.
See also:
AutoZone Inc Short-term (Operating) Activity Ratios
Long-term
| Aug 26, 2023 | Aug 27, 2022 | Aug 28, 2021 | Aug 29, 2020 | Aug 31, 2019 | |
|---|---|---|---|---|---|
| Fixed asset turnover | 3.12 | 3.14 | 3.01 | 2.80 | 2.70 |
| Total asset turnover | 1.09 | 1.06 | 1.01 | 0.88 | 1.20 |
The long-term activity ratios of Autozone Inc. indicate the efficiency of the company in utilizing its assets over the years.
The fixed asset turnover has remained relatively stable, ranging from 2.70 to 3.14, which suggests that Autozone has been effectively using its fixed assets to generate sales. This ratio measures how effectively the company is using its fixed assets to generate revenue, and the consistent high values indicate good efficiency in this aspect.
On the other hand, the total asset turnover ratio has shown some fluctuation. It increased from 0.88 in 2020 to 1.06 in 2022, but then decreased to 1.01 in 2021 before rising again to 1.09 in 2023. This indicates that Autozone has been improving its overall efficiency in utilizing all its assets to generate sales, despite the short-term fluctuation.
Overall, the long-term activity ratios for Autozone Inc. exemplify strong and consistent efficiency in utilizing both fixed and total assets to generate revenue over the years, which is a positive indicator of the company's operational performance.