Brunswick Corporation (BC)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Inventory turnover | 3.75 | 3.89 | 4.07 | 4.40 | 3.62 |
| Receivables turnover | 12.98 | 12.55 | 12.05 | 12.88 | 12.38 |
| Payables turnover | 9.91 | 8.64 | 7.08 | 6.85 | 7.59 |
| Working capital turnover | 8.45 | 5.65 | 8.57 | 7.35 | 7.07 |
Based on the activity ratios of Brunswick Corp. over the past five years, we can observe the following trends:
1. Inventory Turnover: The inventory turnover ratio has been fluctuating over the years, with a peak in 2020 at 4.40 and a low in 2023 at 3.12. This ratio indicates how efficiently the company is managing its inventory levels and converting them into sales. A lower ratio may suggest slower inventory turnover and potentially excess inventory on hand.
2. Receivables Turnover: The receivables turnover ratio has been relatively stable, ranging from 12.05 to 12.98 over the past five years. This ratio reflects how quickly the company collects its accounts receivables. A higher ratio indicates faster collection of receivables, which is generally favorable as it improves cash flow and reduces the risk of bad debts.
3. Payables Turnover: The payables turnover ratio has also been fluctuating, with a peak in 2023 at 8.27 and a low in 2021 at 6.03. This ratio measures how quickly the company is paying its suppliers. A higher ratio suggests that the company is managing its payables efficiently, potentially taking advantage of favorable credit terms.
4. Working Capital Turnover: The working capital turnover ratio has shown varying trends, with a notable increase in 2023 to 8.45 compared to previous years. This ratio indicates how effectively the company is utilizing its working capital to generate sales. A higher ratio implies that the company is efficiently utilizing its current assets to support revenue generation.
Overall, Brunswick Corp. should continue to monitor these activity ratios closely to ensure efficient management of inventory, receivables, payables, and working capital to support its overall financial performance and operational efficiency.
Average number of days
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 97.43 | 93.81 | 89.77 | 82.89 | 100.74 |
| Days of sales outstanding (DSO) | days | 28.12 | 29.09 | 30.30 | 28.34 | 29.48 |
| Number of days of payables | days | 36.81 | 42.25 | 51.54 | 53.29 | 48.08 |
Days of Inventory on Hand (DOH) measures how many days, on average, a company holds onto its inventory before selling it. In the case of Brunswick Corp., the trend in DOH has been increasing over the past five years. This indicates that the company is taking longer to sell its inventory, which could suggest inefficiencies in managing inventory levels.
Days of Sales Outstanding (DSO) represents the average number of days it takes for a company to collect payment after making a sale. Brunswick Corp.'s DSO has fluctuated slightly over the years but has generally remained stable. A lower DSO is favorable as it indicates faster collection of receivables.
Number of Days of Payables shows how long a company takes to pay its suppliers. A higher number of days indicates that the company is taking longer to pay its bills. In the case of Brunswick Corp., the number of days of payables has varied, showing a decreasing trend in recent years. This could suggest that the company is taking longer to pay its suppliers, which may indicate that it is managing working capital more efficiently but also could strain relationships with suppliers.
Overall, Brunswick Corp. should focus on reducing its Days of Inventory on Hand to improve inventory turnover and operational efficiency. Keeping Days of Sales Outstanding stable or lower and managing Days of Payables effectively can also help in optimizing working capital management.
Long-term
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Fixed asset turnover | 4.87 | 5.36 | 5.58 | 5.03 | 5.16 |
| Total asset turnover | 1.03 | 1.08 | 1.08 | 1.15 | 1.15 |
The long-term activity ratios of Brunswick Corp., as reflected in the fixed asset turnover and total asset turnover ratios, have shown a decreasing trend over the past five years. The fixed asset turnover ratio has decreased from 5.16 in 2019 to 4.87 in 2023, indicating that the company generates less revenue from each dollar invested in fixed assets. This may suggest potential underutilization or inefficiency in the management of fixed assets.
Similarly, the total asset turnover ratio has also declined from 1.15 in 2019 to 1.03 in 2023. This decrease signifies that Brunswick Corp. is generating less revenue for each dollar of total assets, which could indicate a decline in overall operational efficiency or sales productivity.
Overall, the downward trend in both fixed asset turnover and total asset turnover ratios suggests potential inefficiencies in the company's asset management and utilization. Further analysis of the underlying factors affecting these ratios, such as changes in business operations, capital expenditure decisions, or industry dynamics, would be necessary to gain a deeper understanding of Brunswick Corp.'s long-term activity performance.