Bellring Brands LLC (BRBR)

Short-term

Turnover ratios

Interpreting the activity ratios of Bellring Brands Inc provides valuable insights into the efficiency and effectiveness of the company's operations and management of its working capital.

1. Inventory Turnover:
The inventory turnover ratio indicates how effectively the company is managing its inventory. Bellring Brands Inc's inventory turnover has shown an increasing trend over the past five years, reaching 5.85 in 2023 from 3.93 in 2019. This suggests that the company has improved its ability to sell inventory relative to previous years. A higher inventory turnover indicates that the company is carrying less excess inventory and is effectively managing its production and sales activities.

2. Receivables Turnover:
The receivables turnover ratio reflects how efficiently the company is collecting on its credit sales. Bellring Brands Inc has demonstrated a consistent performance in collecting its receivables over the years, with a ratio of 9.91 in 2023 compared to 12.49 in 2019. While there has been a slight decline, the company's ability to collect receivables remains strong, indicating effective credit management and collection procedures.

3. Payables Turnover:
The payables turnover ratio reveals how efficiently the company is managing its payments to suppliers. Bellring Brands Inc's payables turnover has shown an upward trend, increasing to 12.77 in 2023 from 8.79 in 2019. This suggests that the company is paying its suppliers more frequently, which can be indicative of good relationships with suppliers and effective cash management.

4. Working Capital Turnover:
The working capital turnover ratio measures the efficiency of the company's utilization of working capital in generating sales. Bellring Brands Inc's working capital turnover has also exhibited an increasing trend, reaching 6.08 in 2023 from 6.74 in 2019. This indicates that the company is using its working capital more efficiently to support its sales activities, which is a positive sign of effective working capital management.

Overall, the activity ratios of Bellring Brands Inc demonstrate an improving trend in the efficiency of its operations and working capital management. The company's ability to manage inventory, collect receivables, make timely payments to suppliers, and utilize working capital effectively has generally improved over the years, which bodes well for its financial health and operational performance.

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Average number of days

Days of inventory on hand (DOH) measures how efficiently a company manages its inventory. A lower DOH indicates better inventory turnover and management. Bellring Brands Inc's inventory turnover has fluctuated over the past five years, with a significant decrease in 2022 followed by an improvement in 2023. The 2023 DOH of 62.40 days is lower than the previous year, suggesting that the company has been more efficient in managing its inventory.

Days of sales outstanding (DSO) reflects how quickly a company collects its accounts receivable. A lower DSO indicates more efficient collections. Bellring Brands Inc's DSO has shown some variability over the five-year period, with a slight increase in 2023 compared to 2022. The 2023 DSO of 36.83 days is higher than the previous year, indicating that the company may be taking longer to collect its receivables.

Number of days of payables measures how long a company takes to pay its suppliers. A higher number of days indicates that the company is taking longer to pay its suppliers. Bellring Brands Inc has shown some fluctuations in its number of days of payables over the past five years, with a decrease in 2023 compared to 2022. The 2023 number of days of payables of 28.58 days is lower than the previous year, suggesting that the company has been paying its suppliers more quickly.

In summary, while Bellring Brands Inc has shown improved efficiency in managing its inventory in 2023, it may need to focus on reducing its days of sales outstanding to improve its collections process. The decrease in the number of days of payables is a positive sign of the company's ability to manage its payables efficiently. However, further improvements in managing accounts receivable may be needed to optimize working capital and cash flow.

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Long-term

The long-term activity ratios of Bellring Brands Inc provide insights into the company's efficiency in utilizing its fixed and total assets to generate sales. The two key ratios analyzed are the fixed asset turnover and the total asset turnover.

1. Fixed Asset Turnover:
- The fixed asset turnover ratio measures how efficiently a company generates sales revenue from its investment in fixed assets such as property, plant, and equipment.
- Bellring Brands Inc has shown a consistent improvement in this ratio over the past five years, with the ratio increasing from 73.03 in 2019 to 196.09 in 2023.
- This indicates that the company has been progressively more efficient in realizing sales from its fixed assets, implying improved asset utilization and potentially better operational efficiency.

2. Total Asset Turnover:
- The total asset turnover ratio measures the company's ability to generate sales from its total assets, including both fixed and current assets.
- Similar to the fixed asset turnover, Bellring Brands Inc has exhibited a positive trend in total asset turnover, increasing from 1.44 in 2019 to 2.41 in 2023.
- This signifies that the company has been more efficient in generating sales from its total assets over the years, which may indicate improved operational performance and increased productivity.

Overall, the increasing trends in both the fixed asset turnover and the total asset turnover ratios reflect the company's improving efficiency in utilizing its assets to generate sales. This suggests positive operational performance and better asset utilization, which can be indicative of effective management and resource allocation within Bellring Brands Inc.