Berry Global Group Inc (BERY)

Short-term

Turnover ratios

Inventory turnover measures how efficiently a company manages its inventory by showing how many times a company sells and replaces its inventory during a period. Over the past five years, Berry Global Group Inc's inventory turnover has ranged from 6.59 to 8.32 times, with a decreasing trend in recent years.

Receivables turnover reflects how efficiently a company collects cash from its credit sales. Berry Global Group Inc's receivables turnover has been relatively stable, ranging from 7.37 to 8.16 times over the past five years, indicating a consistent collection of receivables.

Payables turnover measures how efficiently a company pays its suppliers. Berry Global Group Inc's payables turnover has fluctuated over the past five years, from 6.16 to 9.47 times, with a downward trend in recent years.

Working capital turnover indicates how effectively a company utilizes its working capital to generate revenue. Berry Global Group Inc's working capital turnover has been volatile, with values ranging from 6.25 to 13.59 times over the past five years, indicating fluctuations in the company's efficiency in generating revenue from its working capital.

Overall, Berry Global Group Inc's activity ratios show mixed results, with inventory turnover decreasing, receivables turnover remaining stable, payables turnover fluctuating, and working capital turnover being volatile. This indicates areas where the company may need to focus on improving efficiency in managing its inventory, collecting receivables, paying suppliers, and utilizing working capital for revenue generation.

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Average number of days

To analyze Berry Global Group Inc's activity ratios based on the provided data:

1. Days of Inventory on Hand (DOH):
- The trend shows an increasing number of days of inventory on hand over the years, indicating that Berry Global Group Inc is holding inventory for a longer period before it is sold.
- A higher DOH could suggest inefficiency in managing inventory levels, which may lead to higher storage costs and potential obsolescence risks.

2. Days of Sales Outstanding (DSO):
- The DSO has fluctuated over the years, with a slight increase in 2024 compared to the previous year.
- A higher DSO suggests that Berry Global Group Inc takes more time to collect its accounts receivable, which could impact cash flow and liquidity.

3. Number of Days of Payables:
- The number of days of payables has varied significantly from year to year, reaching the highest level in 2024.
- A longer period of payables indicates that Berry Global Group Inc is taking more time to pay its suppliers, which could be beneficial for cash flow management but may strain supplier relationships.

Overall, understanding and monitoring these activity ratios are crucial for assessing Berry Global Group Inc's operational efficiency, inventory management, accounts receivable collection, and vendor payment practices. It may be prudent for the company to focus on optimizing inventory turnover, improving accounts receivable collection processes, and managing payables effectively to enhance overall financial performance.

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Long-term

The long-term activity ratios of Berry Global Group Inc, as reflected by the fixed asset turnover and total asset turnover, show the efficiency with which the company utilizes its assets to generate revenue.

1. Fixed Asset Turnover:
- The fixed asset turnover ratio measures how effectively the company utilizes its fixed assets to generate sales. A higher ratio indicates more efficient utilization of fixed assets.
- Berry Global Group Inc's fixed asset turnover ratios have fluctuated over the past five years, ranging from 2.56 in 2020 to 3.34 in 2022. This indicates variations in the company's efficiency in generating sales from its fixed assets.
- The trend indicates that the company has generally been effective in utilizing its fixed assets to generate revenue, with a slight decrease in 2024 compared to the peak in 2022.

2. Total Asset Turnover:
- The total asset turnover ratio shows how efficiently the company generates sales from all its assets, including both fixed and current assets. A higher ratio implies better utilization of all assets to generate revenue.
- Berry Global Group Inc's total asset turnover ratios have also shown fluctuations over the past five years, ranging from 0.70 in 2020 to 0.85 in 2022. This indicates changes in the company's overall efficiency in generating sales from all assets.
- The trend suggests an overall improvement in the company's ability to generate sales from its total assets, with the ratio generally increasing over the years.

Overall, Berry Global Group Inc has shown varying levels of efficiency in utilizing both fixed and total assets to generate revenue over the past five years. The company's management may consider further initiatives to enhance asset utilization and optimize revenue generation in the future.