Berry Global Group Inc (BERY)
Activity ratios
Short-term
Turnover ratios
| Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | Sep 30, 2019 | |
|---|---|---|---|---|---|
| Inventory turnover | 7.45 | 7.36 | 6.59 | 8.32 | 5.48 |
| Receivables turnover | 8.08 | 8.16 | 7.37 | 7.96 | 5.82 |
| Payables turnover | 7.59 | 7.39 | 6.16 | 9.47 | 6.26 |
| Working capital turnover | 6.96 | 6.25 | 7.26 | 7.16 | 5.17 |
The activity ratios of Berry Global Group Inc indicate the efficiency of the company in managing its inventory, receivables, payables, and working capital over the past five years.
The inventory turnover ratio, which measures how efficiently the company manages its inventory, has remained relatively stable, between 5.95 and 7.34, with a slight decline in 2021 followed by a recovery in the subsequent years.
The receivables turnover ratio, reflecting the company's ability to collect outstanding receivables, has also shown consistency, ranging from 7.37 to 8.16, indicating efficient management of receivables.
On the other hand, the payables turnover ratio, representing how quickly the company pays its suppliers, has fluctuated more, ranging from 5.56 to 8.34. This suggests varying levels of efficiency in managing payables over the years.
The working capital turnover ratio, which measures the efficiency of utilizing working capital to generate sales, has generally improved over the years, from 5.17 to 7.26, implying better utilization of working capital to generate revenue.
Overall, Berry Global Group Inc has demonstrated strong efficiency in managing inventory and receivables, with some fluctuations in payables turnover. The improvement in working capital turnover indicates enhanced efficiency in utilizing working capital to drive sales over the years.
Average number of days
| Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | Sep 30, 2019 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 49.02 | 49.60 | 55.37 | 43.85 | 66.57 |
| Days of sales outstanding (DSO) | days | 45.20 | 44.75 | 49.53 | 45.85 | 62.74 |
| Number of days of payables | days | 48.10 | 49.40 | 59.26 | 38.56 | 58.28 |
To assess the efficiency of inventory management, we can analyze the days of inventory on hand (DOH) ratio. Berry Global Group Inc's DOH has been relatively consistent over the past five years, ranging between 49.76 to 66.57 days. This indicates that the company has maintained a moderate level of inventory turnover, striving to balance the costs associated with holding inventory against potential stockouts.
The days of sales outstanding (DSO) measure indicates the average number of days it takes for the company to collect revenue after a sale is made. Berry Global Group Inc's DSO has shown a downward trend over the past five years, suggesting an improvement in the efficiency of its accounts receivable management. A decrease from 62.74 days in 2019 to 45.19 days in 2023 signifies a positive development in the company's ability to collect receivables promptly.
Additionally, the number of days of payables measure offers insights into the company's payment practices. Berry Global Group Inc's payables period has fluctuated over the past five years, varying between 43.76 to 65.62 days. This implies that the company has been managing its trade credit terms to balance cash flow and supplier relationships.
Overall, Berry Global Group Inc has demonstrated relatively stable inventory management, continued progress in reducing DSO, and fluctuating yet manageable trade credit terms over the past five years. These ratios collectively indicate the company's efforts to optimize working capital and enhance operational efficiency.
Long-term
| Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | Sep 30, 2019 | |
|---|---|---|---|---|---|
| Fixed asset turnover | 2.77 | 3.34 | 2.96 | 2.56 | 1.88 |
| Total asset turnover | 0.76 | 0.85 | 0.77 | 0.70 | 0.54 |
The long-term activity ratios of Berry Global Group Inc demonstrate the company's efficiency in utilizing its fixed assets and total assets to generate sales. The fixed asset turnover ratio has shown a declining trend from 2019 to 2023, indicating that the company may be less effective in generating sales from its fixed assets. However, the ratio remains relatively high, signifying that for every dollar invested in fixed assets, the company generates significant revenue.
On the other hand, the total asset turnover ratio has also declined over the same period, indicating that the company's efficiency in using its total assets to generate sales has decreased. Although the ratio remains below 1, it has shown improvement in recent years, signifying a positive trend in utilizing total assets to generate revenue, albeit at a slower pace.
Overall, while Berry Global Group Inc has shown a decline in its long-term activity ratios, particularly in the total asset turnover ratio, the company's fixed asset turnover ratio remains relatively high, indicating efficient utilization of fixed assets to generate sales. This suggests a need for the company to focus on improving the efficiency of utilizing its total assets to enhance overall revenue generation.