Crown Holdings Inc (CCK)

Short-term

Turnover ratios

Crown Holdings, Inc.'s activity ratios provide insights into the efficiency of the company's operations in managing its inventories, receivables, payables, and working capital.

1. Inventory turnover:
- The inventory turnover ratio measures how many times a company's inventory is sold and replaced over a specific period. Crown Holdings, Inc. maintained a relatively stable inventory turnover rate over the past eight quarters, ranging from 4.45 to 5.92.
- This indicates that the company efficiently manages its inventory levels, with a higher ratio suggesting that inventory is moving quickly, which can help prevent overstocking and reduce carrying costs.

2. Receivables turnover:
- The receivables turnover ratio measures how efficiently a company collects on its credit sales. Crown Holdings, Inc. maintained a consistent receivables turnover ratio between 5.29 and 7.02.
- A higher turnover ratio indicates that the company is effectively collecting receivables, which may result in better cash flow and reduced bad debts.

3. Payables turnover:
- The payables turnover ratio assesses how efficiently a company pays its suppliers. Crown Holdings, Inc.'s payables turnover ratio ranged from 3.08 to 4.43 over the past eight quarters.
- A higher payables turnover ratio suggests that the company is paying its suppliers more quickly, potentially improving supplier relationships and leveraging early payment discounts.

4. Working capital turnover:
- The working capital turnover ratio evaluates how effectively a company utilizes its working capital to generate sales. Crown Holdings, Inc.'s working capital turnover ranged from 11.68 to 24.57.
- A higher working capital turnover ratio indicates that the company is efficiently using its working capital to generate revenue, which may signal effective working capital management.

In summary, Crown Holdings, Inc. has demonstrated overall efficiency in managing its inventories, receivables, payables, and working capital, as reflected in its stable or improving activity ratios across the quarters analyzed.

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Average number of days

To analyze Crown Holdings, Inc.'s activity ratios, we will focus on three key metrics:

1. Days of Inventory on Hand (DOH):
The DOH measures how many days it takes for a company to sell its inventory. A lower number indicates better inventory management. Crown Holdings, Inc.'s DOH has been fluctuating over the past eight quarters, ranging from 61.67 days to 82.07 days. The decreasing trend in recent quarters (Q4 2023 to Q1 2023) suggests that the company has improved its inventory management efficiency.

2. Days of Sales Outstanding (DSO):
The DSO metric shows how long it takes for a company to collect its accounts receivable. A lower DSO indicates quicker collection of receivables. Crown Holdings, Inc.'s DSO has also varied in the past two years, with values ranging from 51.97 days to 69.01 days. The decreasing trend from Q4 2022 to Q1 2023 indicates an improvement in the company's receivables collection efficiency.

3. Number of Days of Payables:
This metric represents the number of days it takes for a company to pay its suppliers. A higher number of days indicates a longer payment period. Crown Holdings, Inc.'s days of payables have fluctuated between 82.41 days to 118.35 days over the past eight quarters. The decreasing trend in recent quarters (Q4 2023 to Q1 2023) suggests that the company is taking longer to pay its suppliers.

Overall, Crown Holdings, Inc. has shown improvements in inventory management and accounts receivable collection efficiency. However, the trend of increasing days of payables may indicate a strategy to delay payments to suppliers. It is essential for the company to strike a balance between managing inventory efficiently, collecting receivables promptly, and maintaining good relationships with suppliers.

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Long-term

Long-term activity ratios provide insight into how effectively a company is utilizing its assets to generate sales. In the case of Crown Holdings, Inc., we can analyze the Fixed Asset Turnover and Total Asset Turnover ratios:

1. Fixed Asset Turnover:
- The Fixed Asset Turnover ratio measures how efficiently a company is using its fixed assets to generate sales. It calculates the amount of sales generated per dollar of fixed assets.
- Crown Holdings, Inc.'s Fixed Asset Turnover ratio has been on a declining trend over the past eight quarters, decreasing from 2.85 in Q4 2022 to 2.37 in Q4 2023.
- This trend suggests that the company may be experiencing challenges in effectively utilizing its fixed assets to generate revenue, which could potentially lead to inefficient asset management or underperformance in sales generation.

2. Total Asset Turnover:
- The Total Asset Turnover ratio indicates the company's overall efficiency in utilizing all its assets to generate sales. It measures the amount of sales generated per dollar of total assets.
- Crown Holdings, Inc.'s Total Asset Turnover ratio has fluctuated over the eight quarters, with a general downward trend observed from 0.91 in Q4 2022 to 0.80 in Q4 2023.
- The decreasing Total Asset Turnover ratio may suggest that the company is becoming less efficient in utilizing all its assets, including both fixed and current assets, to generate sales. This could indicate potential challenges in optimizing asset utilization or capturing revenue opportunities efficiently.

In summary, the decline in both Fixed Asset Turnover and Total Asset Turnover ratios for Crown Holdings, Inc. may indicate a need for further analysis and potential improvements in asset management strategies to enhance operational efficiency and revenue generation.