Central Garden & Pet Company (CENT)

Short-term

Turnover ratios

Central Garden & Pet Company's inventory turnover has been fluctuating over the past five years, decreasing from 4.32 in 2020 to 2.98 in 2024. This suggests that the company is taking longer to sell its inventory. The receivables turnover has also shown variability, with a peak of 9.94 in 2023 and a low of 6.88 in 2020, indicating the speed at which the company collects outstanding payments from customers.

On the other hand, the payables turnover has been relatively stable, ranging from 9.25 in 2020 to 12.38 in 2023. This ratio reflects how efficiently Central Garden & Pet Company pays its suppliers. Furthermore, the working capital turnover has also shown some fluctuations, with a decrease from 3.23 in 2021 to 2.33 in 2024, indicating the efficiency of the company in generating revenue relative to the amount of working capital employed.

Overall, Central Garden & Pet Company's activity ratios reveal varying levels of efficiency in managing its inventory, receivables, payables, and working capital over the past five years. An in-depth analysis of these ratios can provide insights into the company's operational performance and effectiveness in utilizing its resources.

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Average number of days

Days of inventory on hand (DOH) measures how many days it takes for a company to sell its inventory. Central Garden & Pet Company's DOH has been increasing over the past five years, indicating slower inventory turnover. This could imply potential issues with managing inventory levels efficiently.

Days of sales outstanding (DSO) reflects the average number of days it takes for a company to collect its accounts receivable. Central Garden & Pet Company's DSO has shown fluctuations but has generally been relatively stable over the years, suggesting a consistent collection process.

Number of days of payables measures the average number of days it takes for a company to pay its suppliers. Central Garden & Pet Company's days of payables have also varied, but have shown an increasing trend recently. This could indicate a more extended time taken to settle payables, which may be a deliberate strategy or a sign of potential financial challenges.

Overall, from the activity ratios perspective, Central Garden & Pet Company's inventory turnover seems to be slowing down, while accounts receivable and payable management have been relatively stable, with some recent fluctuations. Management should closely monitor inventory levels and payment practices to ensure continued efficiency and financial health.

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Long-term

The fixed asset turnover ratio for Central Garden & Pet Company has been relatively consistent over the past five years, ranging from 8.41 to 11.02. This indicates that the company generates a high level of revenue relative to its investment in fixed assets, reflecting efficient utilization of these assets to generate sales.

On the other hand, the total asset turnover ratio has shown a declining trend over the same period, decreasing from 1.15 in 2020 to 0.90 in 2024. This suggests that the company's overall efficiency in generating sales from its total assets has decreased over time.

Overall, while Central Garden & Pet Company continues to show strong performance in generating revenue from its fixed assets, there may be opportunities for improvement in its overall asset utilization efficiency to enhance revenue generation across all asset categories.