Crown Holdings Inc (CCK)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Inventory turnover | 7.04 | 6.11 | 7.05 | 8.71 | 6.05 |
| Receivables turnover | 6.71 | 6.85 | 5.89 | 7.41 | 7.63 |
| Payables turnover | 4.62 | 4.44 | 4.22 | 5.14 | 3.72 |
| Working capital turnover | 18.25 | 17.38 | 30.71 | 18.15 | 113.25 |
Crown Holdings, Inc. has shown fairly consistent inventory turnover ratios over the past five years, ranging from 5.20 to 5.92, indicating that the company efficiently manages its inventory levels. The receivables turnover ratios have also remained relatively stable, fluctuating between 6.03 and 7.63. This suggests that Crown Holdings collects its accounts receivable relatively quickly.
On the other hand, the payables turnover ratios have shown more variability, with values ranging from 3.11 to 3.88. A lower payables turnover ratio could indicate that the company takes longer to pay its suppliers, potentially facing liquidity challenges. However, the working capital turnover ratios have shown significant fluctuations, with a significant decline from 113.25 in 2019 to 19.00 in 2023. This may suggest changes in the company's working capital management efficiency over the period.
Overall, Crown Holdings, Inc. demonstrates effective management of inventory and accounts receivable, with some potential room for improvement in managing payables and working capital efficiently. It would be important for the company to monitor these ratios closely to ensure optimal operational and financial performance.
Average number of days
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 51.82 | 59.75 | 51.75 | 41.88 | 60.32 |
| Days of sales outstanding (DSO) | days | 54.41 | 53.25 | 62.02 | 49.28 | 47.81 |
| Number of days of payables | days | 78.99 | 82.27 | 86.53 | 71.00 | 98.16 |
Activity ratios provide insights into how efficiently a company manages its resources and operations. Let's analyze the activity ratios of Crown Holdings, Inc. based on the data provided:
1. Days of Inventory on Hand (DOH): This ratio measures how many days, on average, it takes for the company to sell its inventory. A lower DOH indicates faster inventory turnover. Over the past five years, Crown Holdings has shown a decreasing trend in DOH, from 63.48 days in 2019 to 61.67 days in 2023. This suggests that the company has been managing its inventory more efficiently over time.
2. Days of Sales Outstanding (DSO): DSO measures how long it takes for the company to collect its accounts receivable. A lower DSO indicates a faster collection of receivables. Crown Holdings' DSO has fluctuated over the years, with a peak of 60.51 days in 2021 and a decrease to 52.24 days in 2023. This indicates that the company has improved its accounts receivable collection efficiency recently.
3. Number of Days of Payables: This ratio reflects the number of days it takes for the company to pay its suppliers. A higher number of days indicates that the company takes longer to pay its bills. Crown Holdings' number of days of payables has been fluctuating, with a peak of 117.27 days in 2021 and a decrease to 94.02 days in 2023. This suggests that the company has been managing its payables more effectively in recent years.
Overall, based on the activity ratios analysis, Crown Holdings has shown improvements in managing its inventory, accounts receivable, and payables over the past five years, indicating enhanced operational efficiency and effectiveness in its working capital management.
Long-term
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Fixed asset turnover | 2.28 | 2.78 | 2.75 | 3.09 | 3.00 |
| Total asset turnover | 0.77 | 0.88 | 0.80 | 0.68 | 0.92 |
The long-term activity ratios of Crown Holdings, Inc. provide insights into the company's efficiency in utilizing its fixed assets and total assets over the years.
1. Fixed Asset Turnover:
- The fixed asset turnover ratio measures how efficiently a company generates sales from its investment in fixed assets.
- Crown Holdings, Inc. experienced a declining trend in fixed asset turnover from 2019 to 2023, indicating a decrease in the effectiveness of utilizing fixed assets to generate revenue.
- The ratio decreased from 3.00 in 2019 to 2.37 in 2023, suggesting a potential inefficiency in managing and utilizing its fixed assets over the period.
- Despite the gradual decline, the company's fixed asset turnover remains relatively stable around the range of 2.37 to 3.00, indicating a moderate level of efficiency in generating sales from its fixed asset base.
2. Total Asset Turnover:
- The total asset turnover ratio evaluates how well a company utilizes its total assets to generate revenue.
- Crown Holdings, Inc. exhibited fluctuations in total asset turnover over the past five years, with a general increasing trend from 2019 to 2022 before a slight decline in 2023.
- The ratio increased from 0.75 in 2019 to 0.91 in 2022, indicating an improvement in utilizing total assets to generate sales during this period. However, in 2023, the total asset turnover decreased to 0.80, which could suggest a slight decline in asset efficiency.
- The company's total asset turnover ratios fluctuated within the range of 0.69 to 0.91, reflecting variations in asset utilization efficiency over the years.
In conclusion, Crown Holdings, Inc. has demonstrated moderate efficiency in generating sales from both fixed assets and total assets, with fluctuations in asset turnover ratios observed over the period. The company should continue monitoring and improving its asset utilization to enhance operational efficiency and financial performance in the long term.