Boise Cascad Llc (BCC)

Short-term

Turnover ratios

Boise Cascade Co's activity ratios depict its efficiency in managing various aspects of its operations. The inventory turnover ratio has been declining over the past three years, indicating that the company is holding onto its inventory for a longer period compared to prior years. This trend may suggest potential issues with inventory management or sales performance.

On the other hand, the receivables turnover ratio has shown fluctuations but generally demonstrates an improvement in collecting receivables efficiently over the years. This implies that the company has been effective in converting its credit sales into cash, which is a positive sign for its overall liquidity and cash flow management.

Similarly, the payables turnover ratio has also exhibited a downward trend, indicating that the company is taking longer to pay its suppliers. While this may sometimes signal leverage over suppliers, it could also suggest potential cash flow constraints or a change in payment policies.

The working capital turnover ratio has been gradually decreasing over the years, implying that the company is generating less revenue per dollar of working capital employed. This could indicate a decrease in operational efficiency or a potential need for better management of working capital to enhance revenue generation.

Overall, the trend in Boise Cascade Co's activity ratios highlights areas of both strength and concern in its operational efficiency and liquidity management, signaling the need for further investigation and potential improvements in certain aspects of its business operations.

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Average number of days

Boise Cascade Co's activity ratios provide insights into how efficiently the company manages its inventory, receivables, and payables.

1. Days of Inventory on Hand (DOH):
The DOH ratio indicates how many days it takes for the company to sell its inventory. Boise Cascade Co's DOH has increased over the past few years, from 38.28 days in 2021 to 48.07 days in 2023. This suggests that the company is holding onto its inventory for a longer period, which may tie up working capital and increase carrying costs.

2. Days of Sales Outstanding (DSO):
The DSO ratio measures how quickly the company collects payment from its customers. Boise Cascade Co's DSO has fluctuated over the years, reaching a peak of 26.08 days in 2020 and decreasing to 19.95 days in 2023. A lower DSO indicates that the company is more efficient in collecting receivables, potentially improving cash flow and liquidity.

3. Number of Days of Payables:
The number of days of payables ratio shows how long it takes for the company to pay its suppliers. Boise Cascade Co's days of payables have also varied, with an increase from 15.27 days in 2022 to 21.03 days in 2023. A higher number of days of payables may indicate that the company is taking longer to settle its payables, potentially improving its cash flow but also potentially straining relationships with suppliers.

Overall, Boise Cascade Co's activity ratios reflect different aspects of its operational efficiency and cash flow management. By analyzing these ratios over multiple years, investors and stakeholders can better understand the company's performance in managing inventory, receivables, and payables.

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Long-term

Boise Cascade Co's long-term activity ratios indicate the efficiency of the company in generating revenue from its fixed assets and total assets over the past five years. The fixed asset turnover ratio has shown a declining trend from 2019 to 2023, indicating that the company is generating less revenue from its fixed assets.

In particular, the fixed asset turnover ratio decreased significantly from 16.00 in 2021 to 7.33 in 2023. This decline may suggest a potential underutilization of fixed assets or a decrease in the effectiveness of the company's operations in generating sales from its long-term assets.

On the other hand, the total asset turnover ratio has also shown a downward trend over the same period, although it is less pronounced compared to the fixed asset turnover ratio. The total asset turnover ratio decreased from 3.08 in 2021 to 1.98 in 2023, indicating a decline in the efficiency of generating revenue from all assets, including fixed and current assets.

Overall, the decreasing trend in both the fixed asset turnover and total asset turnover ratios may raise concerns about Boise Cascade Co's operational efficiency and asset utilization in generating sales. It is important for the company to explore potential reasons for these declines and implement strategies to improve asset utilization and operational effectiveness to enhance long-term profitability and sustainability.