The Chefs Warehouse Inc (CHEF)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Inventory turnover | 11.71 | 11.81 | 10.32 | 12.15 | 15.09 |
| Receivables turnover | 10.36 | 10.15 | 9.83 | 10.02 | 11.32 |
| Payables turnover | 13.87 | 16.75 | 15.52 | 14.84 | 21.66 |
| Working capital turnover | 8.57 | 9.82 | 5.85 | 6.33 | 3.79 |
Based on the provided data, we can analyze The Chefs Warehouse Inc's activity ratios as follows:
1. Inventory Turnover:
- The inventory turnover ratio measures how efficiently a company manages its inventory. A higher ratio indicates faster turnover. The trend for The Chefs Warehouse Inc's inventory turnover is declining, from 15.09 in 2020 to 11.71 in 2024. This suggests that the company is holding onto its inventory for a longer period in recent years, which may tie up capital and lead to potential obsolescence risks.
2. Receivables Turnover:
- The receivables turnover ratio reflects how quickly a company collects payments from its customers. The trend for The Chefs Warehouse Inc's receivables turnover is relatively stable, ranging from 10.02 in 2021 to 10.36 in 2024. This indicates that the company is efficiently managing its accounts receivable and collecting payments at a consistent pace.
3. Payables Turnover:
- The payables turnover ratio measures how quickly a company pays its suppliers. A higher ratio suggests a shorter payment period. The payables turnover for The Chefs Warehouse Inc fluctuated over the years, from 14.84 in 2021 to 13.87 in 2024. This indicates that the company is taking slightly longer to settle its payables, which may impact supplier relationships and cash flow management.
4. Working Capital Turnover:
- The working capital turnover ratio evaluates how efficiently a company utilizes its working capital to generate sales. A higher ratio signifies better utilization of working capital. The Chefs Warehouse Inc's working capital turnover has shown an increasing trend, from 3.79 in 2020 to 8.57 in 2024. This improvement suggests that the company is effectively using its working capital to support its operations and generate sales.
In summary, The Chefs Warehouse Inc has experienced varying trends in its activity ratios, indicating areas of both efficiency and challenges in managing its inventory, receivables, payables, and working capital. It is important for the company to continue monitoring these ratios to ensure optimal performance and financial health.
Average number of days
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 31.17 | 30.91 | 35.36 | 30.04 | 24.18 |
| Days of sales outstanding (DSO) | days | 35.23 | 35.96 | 37.14 | 36.44 | 32.26 |
| Number of days of payables | days | 26.31 | 21.79 | 23.51 | 24.59 | 16.85 |
The activity ratios of The Chefs Warehouse Inc provide insights into its operational efficiency and management of resources.
1. Days of Inventory on Hand (DOH):
- The trend in the DOH shows an increase from 24.18 days in 2020 to 31.17 days in 2024.
- The company took longer to sell its inventory over the years, indicating a potential inefficiency in managing or turning over its stock.
2. Days of Sales Outstanding (DSO):
- The DSO trend shows a slight increase from 32.26 days in 2020 to 35.23 days in 2024.
- This indicates that the company is taking slightly longer to collect its accounts receivable, possibly leading to cash flow challenges.
3. Number of Days of Payables:
- The trend in the number of days of payables shows some fluctuations from 16.85 days in 2020 to 26.31 days in 2024.
- The increase in days of payables suggests that the company took more time to pay its suppliers, potentially impacting vendor relationships or cash management.
In summary, The Chefs Warehouse Inc's activity ratios indicate potential challenges in managing inventory effectively, collecting receivables promptly, and managing payables efficiently. Monitoring and improving these ratios could help enhance the company's overall operational performance and financial health.
Long-term
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Fixed asset turnover | 16.45 | 14.44 | 13.77 | 12.94 | 9.45 |
| Total asset turnover | 2.04 | 1.99 | 1.69 | 1.61 | 1.12 |
The Fixed Asset Turnover ratio of The Chefs Warehouse Inc has shown a steady increase over the five-year period, starting at 9.45 in 2020 and reaching 16.45 in 2024. This indicates that the company has been able to generate more revenue relative to its investment in fixed assets, reflecting a more efficient utilization of these assets over time.
Additionally, the Total Asset Turnover ratio has also displayed an upward trend from 1.12 in 2020 to 2.04 in 2024. This suggests that the company has been able to generate more sales relative to its total assets, indicating an improvement in overall asset utilization efficiency.
Overall, the increasing trend in both the Fixed Asset Turnover and Total Asset Turnover ratios signifies a positive development in The Chefs Warehouse Inc's long-term activity performance, showcasing greater efficiency in generating revenue from its assets over the years.