Churchill Downs Incorporated (CHDN)

Short-term

Turnover ratios

In analyzing Churchill Downs Incorporated's activity ratios, we can observe the following:

1. Inventory Turnover:
- The company's inventory turnover has shown a general increasing trend over the years, from 16.05 in 2020 to a significant jump to 154.81 in 2024.
- A high inventory turnover ratio indicates that Churchill Downs is efficiently managing its inventory levels and selling products quickly.

2. Receivables Turnover:
- The data shows that receivables turnover information is not available for any of the years provided. This could indicate that the company has not disclosed this information or that it may not be significant for Churchill Downs' operations.

3. Payables Turnover:
- Similar to receivables turnover, payables turnover data is not provided for any of the years, making it challenging to assess how efficiently the company is managing its accounts payable.

4. Working Capital Turnover:
- In 2021, the working capital turnover was 15.00, suggesting that Churchill Downs effectively utilized its working capital to generate sales during that period. The ratio dropped significantly to 8.48 in 2024, indicating a potential decrease in the efficiency of working capital utilization in generating revenue.

Overall, based on the available activity ratio information, Churchill Downs appears to be effectively managing its inventory levels and using its working capital efficiently to generate revenue. However, the lack of data on receivables and payables turnover ratios limits a comprehensive assessment of the company's complete working capital management and operational efficiency.

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Average number of days

The activity ratios for Churchill Downs Incorporated provide insight into the efficiency of the company in managing its inventory, receivables, and payables.

1. Days of Inventory on Hand (DOH):
- In 2020, the company held inventory for an average of 22.74 days before selling it, which decreased to 20.39 days in 2021. Subsequently, DOH increased to 21.99 days in 2022 but showed a significant decrease to 16.94 days by 2023. The DOH dropped notably to just 2.36 days in 2024.
- A decreasing trend in DOH indicates that the company is selling inventory more quickly, potentially due to effective inventory management or increased demand for its products.

2. Days of Sales Outstanding (DSO):
- The data provided does not include information on Days of Sales Outstanding. DSO is a measure of how long it takes for a company to collect payment after a sale, indicating its efficiency in managing accounts receivable.

3. Number of Days of Payables:
- Similarly, there is no information available on the Number of Days of Payables. This metric would show how long the company takes to pay its suppliers, providing insights into its liquidity and supplier relationships.

In conclusion, based on the provided data, Churchill Downs Incorporated has shown improvements in its inventory turnover efficiency as reflected in the decreasing trend of Days of Inventory on Hand. Further information on Days of Sales Outstanding and Number of Days of Payables would be necessary to evaluate the company's overall management of working capital and relationships with customers and suppliers.

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Long-term

Churchill Downs Incorporated's long-term activity ratios provide insights into how effectively the company is utilizing its assets to generate sales.

1. Fixed Asset Turnover:
- The fixed asset turnover ratio measures the company's ability to generate revenue from its investment in fixed assets.
- From 2020 to 2021, the ratio improved significantly from 0.97 to 1.61, indicating that Churchill Downs efficiently utilized its fixed assets to generate sales.
- However, in 2022, the ratio decreased to 0.91, signaling a potential decrease in efficiency in utilizing fixed assets to generate revenue.
- The absence of data for 2023 and 2024 makes it challenging to assess the trend accurately.

2. Total Asset Turnover:
- The total asset turnover ratio shows how effectively the company is using all its assets to generate revenue.
- Churchill Downs' total asset turnover ratio increased from 0.39 in 2020 to 0.54 in 2021, indicating an improvement in utilizing total assets to generate sales.
- In 2022, the ratio dropped to 0.29, which suggests a decline in efficiency in utilizing total assets for revenue generation.
- The ratios for 2023 and 2024 show a slight improvement but are still below the 2021 levels, indicating a need for the company to enhance its asset utilization further.

In conclusion, the analysis of Churchill Downs Incorporated's long-term activity ratios highlights fluctuations in efficiency in utilizing fixed and total assets to generate sales. The company should focus on improving asset utilization to enhance its overall operational performance in the long term.