The Chefs Warehouse Inc (CHEF)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Inventory turnover | 11.81 | 10.32 | 12.15 | 15.09 | 9.68 |
| Receivables turnover | 10.15 | 9.83 | 10.02 | 11.32 | 8.99 |
| Payables turnover | 16.75 | 15.52 | 14.84 | 21.66 | 12.76 |
| Working capital turnover | 9.82 | 5.85 | 6.33 | 3.79 | 5.19 |
The Chefs Warehouse Inc's activity ratios provide insights into the efficiency of the company's operations in managing inventory, receivables, payables, and working capital over the past five years.
1. Inventory turnover: The company has shown a consistent trend of efficient inventory management, with the inventory turnover ratio increasing from 9.68 in 2019 to 11.81 in 2023. This indicates that inventory is being sold and replaced more frequently, which is generally viewed positively as it reduces holding costs and indicates strong sales.
2. Receivables turnover: The receivables turnover ratio has also shown a stable trend, indicating that the company is collecting its accounts receivable efficiently. The ratio increased slightly from 8.99 in 2019 to 10.15 in 2023, suggesting that the company is converting its credit sales into cash effectively.
3. Payables turnover: The payables turnover ratio has been fluctuating over the years but generally shows a decreasing trend from 12.76 in 2019 to 16.75 in 2023. This implies that the company is taking longer to pay its suppliers, which can be advantageous in terms of preserving cash flow and maintaining good relationships with vendors.
4. Working capital turnover: The working capital turnover ratio indicates how effectively the company is utilizing its working capital to generate sales. The increasing trend from 5.19 in 2019 to 9.82 in 2023 suggests that the company is generating more sales revenue per dollar of working capital, reflecting efficient management of current assets and liabilities.
Overall, the activity ratios of The Chefs Warehouse Inc demonstrate a strong emphasis on efficient management of inventories, receivables, payables, and working capital, which are crucial for maintaining liquidity and generating profits in the long run.
Average number of days
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 30.91 | 35.36 | 30.04 | 24.18 | 37.71 |
| Days of sales outstanding (DSO) | days | 35.96 | 37.14 | 36.44 | 32.26 | 40.59 |
| Number of days of payables | days | 21.79 | 23.51 | 24.59 | 16.85 | 28.61 |
The trend in The Chefs Warehouse Inc's activity ratios over the past five years reveals some interesting insights.
1. Days of inventory on hand (DOH) has fluctuated during this period, with a noticeable increase from 2019 to 2020 before decreasing in subsequent years. This indicates that the company has managed its inventory more efficiently in recent years, holding less inventory on hand relative to its sales.
2. Days of sales outstanding (DSO) remained relatively stable over the five-year period, with a slight decrease in 2020 followed by a slight increase in 2021. This suggests that the company has been consistent in collecting its accounts receivable in a timely manner.
3. Number of days of payables has also shown fluctuations, with a significant increase in 2021 compared to 2020, before decreasing in 2022 and 2023. The longer number of days of payables may indicate that the company is taking longer to pay its suppliers, possibly to manage cash flow effectively.
In general, the trends in the activity ratios of The Chefs Warehouse Inc indicate improvements in inventory management efficiency and a relatively stable accounts receivable collection process. However, the fluctuations in the number of days of payables suggest a changing approach in managing payables over the years.
Long-term
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Fixed asset turnover | 15.80 | 13.77 | 12.94 | 9.45 | 16.95 |
| Total asset turnover | 1.99 | 1.69 | 1.61 | 1.12 | 1.55 |
The fixed asset turnover ratio for The Chefs Warehouse Inc has shown an increasing trend from 9.45 in 2020 to 15.80 in 2023, indicating that the company is generating more revenue per dollar of fixed assets invested. This suggests an improvement in the efficiency of utilizing fixed assets to generate sales over the years.
In contrast, the total asset turnover ratio has also exhibited an upward trend, from 1.12 in 2020 to 1.99 in 2023. This indicates that the company is generating more revenue relative to its total assets, reflecting increased efficiency in asset utilization to generate sales.
Overall, both the fixed asset turnover and total asset turnover ratios have been on an upward trajectory, showcasing The Chefs Warehouse Inc's enhanced ability to generate sales from its fixed and total assets, respectively, over the years. This trend suggests improved operational efficiency and effective management of assets to drive revenue growth.