AZZ Incorporated (AZZ)

Short-term

Turnover ratios

AZZ Incorporated's activity ratios provide insights into the efficiency with which the company is managing its assets and liabilities.

The inventory turnover ratio has shown a generally increasing trend over the periods analyzed, indicating that the company is selling its inventory more rapidly. The increase in this ratio signifies improved efficiency in managing and selling inventory.

The receivables turnover ratio has also shown an increasing trend, suggesting that the company is collecting its receivables at a faster rate. This improvement reflects effective credit and collection policies in place.

The payables turnover ratio has displayed fluctuation but overall has been relatively high, implying that the company is managing its payables well by paying suppliers promptly. A high payables turnover ratio can indicate good relationships with suppliers and the ability to take advantage of discounts for early payments.

The working capital turnover ratio has shown variability, but a generally increasing trend, indicating that the company is generating more revenue for each dollar of working capital invested. This implies improved operational efficiency and effective management of working capital.

Overall, the increasing trends in inventory turnover, receivables turnover, and working capital turnover ratios suggest that AZZ Incorporated is becoming more efficient in managing its assets, while the relatively high payables turnover ratio indicates effective management of its liabilities.

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Average number of days

1. Days of Inventory on Hand (DOH):
- AZZ Incorporated's Days of Inventory on Hand has improved over the past few quarters, declining from a high of 176.06 days in August 2021 to 20.82 days in February 2024.
- This indicates that the company has been managing its inventory more efficiently, possibly by better forecasting demand and optimizing its supply chain.

2. Days of Sales Outstanding (DSO):
- The Days of Sales Outstanding for AZZ Incorporated have fluctuated over the periods, with a general downward trend from 154.67 days in August 2022 to 21.27 days in February 2024.
- This suggests that the company has been collecting its receivables more quickly, improving its cash flow and liquidity position.

3. Number of Days of Payables:
- The Number of Days of Payables for AZZ Incorporated has also varied, but there seems to be a trend of decreasing payables days, dropping from 156.33 days in August 2022 to 15.57 days in February 2024.
- A decrease in payables days may indicate that the company is paying its suppliers more promptly, which could enhance relationships and possibly lead to better terms in the future.

Overall, the activity ratios for inventory management (DOH), accounts receivable collection (DSO), and accounts payable settlement (Number of Days of Payables) demonstrate an improving trend in operational efficiency and financial management for AZZ Incorporated.

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Long-term

The fixed asset turnover ratio measures how efficiently a company utilizes its fixed assets to generate sales. A higher fixed asset turnover ratio indicates better asset utilization efficiency.

Looking at AZZ Incorporated's fixed asset turnover ratio over the past several periods, it shows some fluctuations but generally improving trend. At the most recent measurement date of February 29, 2024, the fixed asset turnover ratio stood at 5.00, indicating that the company generated $5 in sales for every $1 of fixed assets. This reflects a significant improvement compared to previous periods, suggesting that AZZ has become more efficient in leveraging its fixed assets to generate revenue.

On the other hand, the total asset turnover ratio reflects the company's overall efficiency in generating sales from all of its assets, including both fixed and current assets. A higher total asset turnover ratio signifies better overall asset utilization efficiency.

AZZ Incorporated's total asset turnover ratio has also shown a positive trend over the analyzed periods, with a notable improvement in recent times. As of February 29, 2024, the total asset turnover ratio was 1.23, indicating that the company generated $1.23 in sales for every $1 of total assets. This suggests that AZZ has been effectively using its total assets to generate revenue, showcasing a healthy operational performance.

Overall, the upward trend in both the fixed asset turnover and total asset turnover ratios for AZZ Incorporated indicates improving efficiency in utilizing its assets to drive sales growth and profitability. These ratios reflect positively on the company's operational performance and efficient asset management strategies.