Cal-Maine Foods Inc (CALM)

Short-term

Turnover ratios

Cal-Maine Foods Inc's inventory turnover has been relatively stable over the past two years, averaging around 6-8 times annually. This indicates that the company efficiently sells through its inventory, with the ability to restock and sell again within a short period.

On the other hand, the receivables turnover ratio has shown more variability, ranging from around 9 to 18 times annually. This suggests that the company collects its accounts receivable at a moderate pace, with some fluctuations in the speed of collection.

The payables turnover ratio has also been inconsistent, with periods of missing data and varying values ranging from around 14 to 27 times annually. This could indicate different payment terms with suppliers or changes in the company's purchasing patterns.

Cal-Maine Foods Inc's working capital turnover has generally remained steady around 3 times annually over the past two years. This demonstrates the efficiency of the company in generating revenue with the working capital at its disposal.

Overall, the activity ratios reflect a company that efficiently manages its inventory and working capital, but with some variability in its accounts receivable and accounts payable turnover.

---

Average number of days

Based on the activity ratios provided for Cal-Maine Foods Inc, the following observations can be made:

1. Days of Inventory on Hand (DOH): The company's DOH has been fluctuating over the past few quarters, ranging from around 47 to 90 days. In the most recent quarter, the DOH was 47.39 days, indicating that, on average, inventory is held for approximately 47 days before being sold. A lower DOH is generally favorable as it suggests efficient inventory management.

2. Days of Sales Outstanding (DSO): The DSO metric also shows variability, with values ranging from 19 to 44 days. In the latest quarter, the DSO was 25.25 days, which implies that it takes approximately 25 days on average for the company to collect its accounts receivable. A lower DSO is preferred as it indicates faster collection of receivables and better liquidity.

3. Number of Days of Payables: The information regarding the number of days of payables is incomplete, with some quarters not showing data. However, the available figures suggest that the company takes around 13 to 25 days to pay its suppliers. A longer payables period can indicate that the company is effectively using trade credit to manage its cash flow.

Overall, analyzing these activity ratios can provide insights into Cal-Maine Foods Inc's efficiency in managing inventory, collecting receivables, and paying suppliers, which are essential factors in assessing the company's operational performance and financial health. It is important for the company to monitor and manage these ratios effectively to optimize its working capital management and improve overall financial performance.

---

Long-term

The fixed asset turnover ratio for Cal-Maine Foods Inc has generally shown a fluctuating trend over the past two years, ranging from a low of 2.08 to a high of 4.29. This ratio measures the efficiency of the company in generating sales revenue from its investment in fixed assets such as property, plant, and equipment. A higher fixed asset turnover ratio indicates that the company is effectively utilizing its fixed assets to generate sales.

On the other hand, the total asset turnover ratio has also varied over the same period, with values between 1.06 and 1.61. This ratio reflects the company's ability to generate sales from all its assets, including fixed and current assets. A higher total asset turnover ratio signifies that the company is more efficient in utilizing all its assets to generate sales.

Overall, Cal-Maine Foods Inc's fixed asset turnover ratio indicates that it has been able to improve the efficiency of its fixed asset utilization over time. However, the total asset turnover ratio has shown more volatility but remains relatively stable. Further analysis and comparison with industry benchmarks may provide additional insights into the company's operational efficiency and asset management strategies.