Crown Holdings Inc (CCK)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Inventory turnover | 7.98 | 7.04 | 6.11 | 7.05 | 8.71 |
| Receivables turnover | 7.27 | 6.71 | 6.85 | 5.89 | 7.41 |
| Payables turnover | 4.74 | 4.62 | 4.44 | 4.22 | 5.14 |
| Working capital turnover | 16.14 | 18.25 | 17.38 | 30.71 | 18.15 |
Activity ratios provide insights into how effectively a company manages its resources to generate sales and collect receivables.
1. Inventory Turnover: Crown Holdings Inc's inventory turnover has decreased over the past five years, from 8.71 in 2020 to 7.98 in 2024. This suggests that the company is taking longer to sell its inventory, which could indicate overstocking or declining demand for its products.
2. Receivables Turnover: The receivables turnover ratio has fluctuated over the years, with a dip in 2021 and a subsequent increase. The ratio was 7.41 in 2020 and improved to 7.27 in 2024. This indicates that Crown Holdings Inc is collecting its receivables more efficiently in recent years.
3. Payables Turnover: The payables turnover ratio has shown a declining trend from 5.14 in 2020 to 4.74 in 2024. A decreasing ratio may suggest that the company is taking longer to pay its suppliers, which could indicate potential liquidity issues or changes in payment policies.
4. Working Capital Turnover: Crown Holdings Inc's working capital turnover has been quite volatile, with a sharp increase in 2021 followed by fluctuations in subsequent years. The ratio was 18.15 in 2020 and dropped to 16.14 in 2024. This variability may indicate changes in the company's working capital management efficiency.
Overall, the analysis of Crown Holdings Inc's activity ratios suggests room for improvement in inventory management and payables turnover, despite relatively stable receivables turnover and working capital turnover. Monitoring these ratios over time can help assess the company's operational efficiency and financial health.
Average number of days
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 45.72 | 51.82 | 59.75 | 51.75 | 41.88 |
| Days of sales outstanding (DSO) | days | 50.20 | 54.41 | 53.25 | 62.02 | 49.28 |
| Number of days of payables | days | 76.99 | 78.99 | 82.27 | 86.53 | 71.00 |
Crown Holdings Inc's activity ratios provide insights into its operational efficiency and management of working capital.
1. Days of Inventory on Hand (DOH):
- The trend in DOH indicates the number of days it takes for the company to sell its inventory.
- The DOH increased from 41.88 days in 2020 to 59.75 days in 2022, then decreased to 45.72 days in 2024.
- A high DOH may suggest excess inventory or slow sales, while a low DOH may indicate efficient inventory management.
2. Days of Sales Outstanding (DSO):
- DSO reflects the average number of days it takes for the company to collect its accounts receivable.
- The DSO rose from 49.28 days in 2020 to 62.02 days in 2021, then fluctuated between 53.25 to 54.41 days in the following years.
- A higher DSO could imply potential issues with credit policies or collection procedures.
3. Number of Days of Payables:
- This ratio represents the average number of days the company takes to pay its suppliers.
- The number of days of payables increased from 71.00 days in 2020 to 86.53 days in 2021, then gradually decreased to 76.99 days in 2024.
- A longer payables period may indicate favorable terms with suppliers, but it could also suggest a strained relationship with vendors if excessively long.
Analyzing these activity ratios together can provide a comprehensive view of Crown Holdings Inc's efficiency in managing its inventory, receivables, and payables. It is important for the company to strike a balance between these elements to optimize its working capital and overall financial performance.
Long-term
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Fixed asset turnover | 2.44 | 2.28 | 2.78 | 2.75 | 3.09 |
| Total asset turnover | 0.87 | 0.77 | 0.88 | 0.80 | 0.68 |
Crown Holdings Inc's fixed asset turnover ratio, which measures the efficiency of the company in generating sales from its fixed assets, decreased from 3.09 in 2020 to 2.44 in 2024. This decline indicates that the company may be less efficient in utilizing its fixed assets to generate revenue over the years.
On the other hand, the total asset turnover ratio, reflecting the company's ability to generate sales from its total assets, experienced fluctuations during the period under review, with a peak of 0.88 in 2022 and a low of 0.68 in 2020. The ratio ended at 0.87 in 2024, which suggests that Crown Holdings Inc has been able to improve its efficiency in generating sales from its total assets despite some yearly variations.
Overall, the analysis of Crown Holdings Inc's long-term activity ratios indicates a mixed performance in asset utilization efficiency, with a noticeable decline in fixed asset turnover and some variations in total asset turnover over the years.