Century Communities Inc (CCS)

Short-term

Turnover ratios

Century Communities Inc's activity ratios provide insights into how efficiently the company is managing its resources and operations. Here is a detailed analysis based on the data provided:

1. Inventory Turnover:
- The inventory turnover ratio measures how effectively the company is selling its inventory. A higher ratio indicates efficient inventory management.
- Century Communities Inc's inventory turnover has fluctuated over the quarters but generally stayed around 1, indicating that the company is selling and replacing its inventory about once a year. This may suggest that the company is effectively managing its inventory levels.

2. Receivables Turnover:
- The receivables turnover ratio assesses how quickly the company collects cash from its credit sales. A higher ratio indicates better credit management.
- Century Communities Inc's receivables turnover has also varied but generally remained at healthy levels. The high turnover ratios suggest that the company is efficiently collecting payments from its customers, which is a positive indicator of effective credit and collection policies.

3. Payables Turnover:
- The payables turnover ratio shows how quickly the company pays its suppliers. A higher ratio may indicate more favorable credit terms.
- Century Communities Inc's payables turnover has fluctuated, but in general, the company is paying its suppliers approximately every 19 to 30 days. This could imply efficient management of trade credit relationships.

4. Working Capital Turnover:
- The working capital turnover ratio evaluates how efficiently the company utilizes its working capital to generate revenue. A higher ratio suggests better utilization of resources.
- Century Communities Inc's working capital turnover has fluctuated but has generally remained above 1, indicating that the company is efficiently leveraging its working capital to generate sales.

Overall, the analysis of Century Communities Inc's activity ratios suggests that the company is effectively managing its inventory levels, collecting payments from customers promptly, and optimizing its working capital usage. The fluctuations in the ratios over different quarters illustrate the dynamic nature of the company's operations and the importance of ongoing monitoring and management of these key activity metrics.

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Average number of days

The activity ratios of Century Communities Inc provide insight into the efficiency of the company's operations and management of its working capital.

1. Days of Inventory on Hand (DOH):
- The trend in DOH shows an increasing number of days from Q1 2023 to Q4 2023, indicating that the company is taking longer to sell its inventory. This could potentially signal overstocking or slowing sales.
- Overall, the range of DOH has been quite high, with values ranging from 306.56 days to 385.30 days, which suggests the company may need to reevaluate its inventory management strategies to improve efficiency.

2. Days of Sales Outstanding (DSO):
- The DSO ratio reflects the average number of days it takes for the company to collect revenue from sales. The trend in DSO fluctuates slightly throughout the quarters, with values ranging from 3.38 days to 7.53 days.
- A lower DSO indicates that the company is collecting revenue more quickly, which is generally positive as it shows efficient credit management and timely collection of receivables.

3. Number of Days of Payables:
- The trend in the number of days of payables shows variability, with values ranging from 10.39 days to 20.29 days. This reflects the number of days it takes the company to pay its suppliers.
- A lower number of days of payables indicates that the company is paying its suppliers more quickly, which could potentially strain its cash flow. However, a higher number of days suggests a potential delay in payments to suppliers.

In conclusion, Century Communities Inc may benefit from focusing on optimizing its inventory management to reduce the number of days inventory is held, while also analyzing its payables process to find the right balance between efficiently managing cash flow and maintaining good supplier relationships.

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Long-term

Century Communities Inc's fixed asset turnover ratio shows a fluctuating trend over the quarters, with values ranging from 39.84 to 159.22. The significant variations in fixed asset turnover may indicate fluctuations in the company's efficiency in generating revenue from its fixed assets, such as properties and land developments. A higher fixed asset turnover suggests that the company is effectively utilizing its fixed assets to generate sales.

On the other hand, the total asset turnover ratio shows a more stable trend over the quarters, with values ranging from 0.89 to 1.21. This ratio indicates how efficiently the company is utilizing all of its assets to generate revenue. A higher total asset turnover ratio suggests that the company is generating more revenue relative to its total assets.

Overall, while the fixed asset turnover ratio fluctuates, the total asset turnover ratio remains relatively stable. Century Communities Inc may need to focus on improving the efficiency of its fixed asset utilization to ensure consistent revenue generation from its assets.