Churchill Downs Incorporated (CHDN)

Short-term

Turnover ratios

Based on the provided data for Churchill Downs Incorporated, here is an analysis of the activity ratios:

1. Inventory Turnover: The inventory turnover ratio measures how efficiently a company manages its inventory. Churchill Downs showed relatively consistent inventory turnover rates from March 2020 to June 2022, ranging between 15.26 and 22.94. However, there was a significant drop in inventory turnover in the second half of 2022, with ratios of 0.74 in June and September 2022, indicating potential issues with inventory management during that period. The ratio recovered in December 2022 and remained stable in the following quarters.

2. Receivables Turnover: Unfortunately, data on receivables turnover is unavailable for the analyzed period, making it difficult to evaluate the efficiency of Churchill Downs in collecting payments from customers.

3. Payables Turnover: Similar to receivables turnover, data on payables turnover is missing for the entire period, preventing an analysis of how efficiently Churchill Downs pays its suppliers.

4. Working Capital Turnover: The working capital turnover ratio indicates how efficiently the company is using its working capital to generate sales. Churchill Downs displayed fluctuating working capital turnover ratios, with a notable increase in March 2021 to a high of 27.05, suggesting a significant improvement in working capital efficiency during that period. The ratio fluctuated in subsequent quarters, indicating varying levels of efficiency in utilizing working capital to generate revenue.

In conclusion, Churchill Downs exhibited varying levels of efficiency in managing its inventory and working capital during the analyzed period. However, due to the lack of data on receivables and payables turnover, a comprehensive assessment of the company's overall activity performance is limited.

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Average number of days

Based on the provided data, we can analyze the activity ratios of Churchill Downs Incorporated as follows:

1. Days of Inventory on Hand (DOH):
- The DOH shows the number of days a company holds inventory before selling it. A lower DOH is generally preferred as it indicates faster inventory turnover.
- Churchill Downs' DOH fluctuated over the years, ranging from a low of 14.31 days to a high of 491.20 days in the period between March 31, 2023, and September 30, 2022.
- The sudden spike in DOH during June 30, 2022, and September 30, 2022, may indicate issues with inventory management or irregularities in reporting.

2. Days of Sales Outstanding (DSO):
- DSO signifies the average number of days it takes for a company to collect revenue after a sale is made. A lower DSO is generally favorable, indicating efficient receivables management.
- The data provided does not include any information on DSO, which makes it challenging to evaluate Churchill Downs' performance in terms of collecting revenues promptly.

3. Number of Days of Payables:
- The number of days of payables measures how long a company takes to pay its suppliers. A higher number suggests that the company is taking longer to settle its bills, which can sometimes indicate favorable payment terms negotiated with suppliers.
- However, the data provided does not contain any information on the number of days of payables for Churchill Downs, so we are unable to assess its payables management efficiency.

In conclusion, based on the available data, we can only evaluate Churchill Downs Incorporated's inventory management efficiency through the Days of Inventory on Hand ratio. The company experienced fluctuating trends in inventory turnover, with a notable anomaly in the data for June 30, 2022, and September 30, 2022. Additional information on Days of Sales Outstanding and Number of Days of Payables would provide a more comprehensive assessment of the company's overall activity ratios.

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Long-term

Churchill Downs Incorporated's fixed asset turnover ratio has shown fluctuations over the past few years, ranging from 0.97 to 1.61. The ratio peaked at 1.61 on December 31, 2021, indicating that the company generated $1.61 in net sales for every dollar invested in fixed assets. However, the ratio decreased to 0.91 on December 31, 2022, reflecting a potential decrease in efficiency in utilizing fixed assets to generate revenue.

On the other hand, the total asset turnover ratio has also displayed variability, with values fluctuating between 0.29 and 0.54. The ratio hit its highest point on December 31, 2021, at 0.54, suggesting that Churchill Downs efficiently utilized its total assets to generate sales revenue. However, there was a decline in the ratio to 0.29 on December 31, 2022, indicating potential inefficiencies in generating sales from total assets.

Overall, the trends in both fixed asset turnover and total asset turnover ratios suggest that Churchill Downs Incorporated has experienced fluctuations in asset utilization efficiency over the stated periods, necessitating closer monitoring to ensure optimal resource allocation and operational effectiveness.