Clearwater Paper Corporation (CLW)

Short-term

Turnover ratios

Activity ratios provide insights into how efficiently a company manages its assets and liabilities to generate sales and cash flow. Let's analyze the activity ratios of Clearwater Paper Corp based on the given data:

1. Inventory Turnover:
- Clearwater Paper Corp's inventory turnover has been relatively stable over the past eight quarters, ranging from 5.35 to 5.92.
- The company's inventory turnover indicates that it takes, on average, between 5.35 to 5.92 times to sell and replace its inventory during the period.
- A consistent inventory turnover ratio suggests effective inventory management, ensuring that stock levels align with sales demand.

2. Receivables Turnover:
- Clearwater Paper Corp's receivables turnover has varied over the quarters, with a range of 10.44 to 12.12.
- The company's receivables turnover indicates how many times receivables are collected and replaced during the period, suggesting the efficiency of credit and collection policies.
- A higher turnover ratio reflects quicker collection of payments from customers, resulting in better cash flow for the company.

3. Payables Turnover:
- Clearwater Paper Corp's payables turnover has shown some fluctuations, ranging from 8.23 to 10.96.
- The payables turnover ratio reflects how efficiently the company manages its accounts payable by paying suppliers. A higher ratio suggests that the company pays its suppliers more quickly.
- Fluctuations in payables turnover may indicate changes in payment terms or supplier relationships that could impact liquidity and working capital management.

4. Working Capital Turnover:
- Clearwater Paper Corp's working capital turnover has varied over the quarters, with values between 5.73 and 7.61.
- The working capital turnover ratio measures how effectively the company utilizes its working capital to generate sales revenue.
- A higher working capital turnover ratio suggests efficient utilization of working capital resources to drive company operations and revenue generation.

In conclusion, Clearwater Paper Corp's activity ratios demonstrate a consistent inventory turnover, varying receivables turnover, some fluctuations in payables turnover, and fluctuations in working capital turnover. Further analysis and comparison with industry benchmarks can provide a more comprehensive understanding of the company's operational efficiency and financial performance.

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Average number of days

To analyze Clearwater Paper Corp's activity ratios, we will focus on the days of inventory on hand (DOH), days of sales outstanding (DSO), and number of days of payables.

1. Days of Inventory on Hand (DOH):
- The trend in Clearwater Paper Corp's DOH has been relatively stable over the past eight quarters, ranging from a low of 61.61 days in Q2 2022 to a high of 68.17 days in Q1 2023. This indicates that, on average, the company holds its inventory for around 62 to 68 days before it is sold. Generally, lower DOH values are preferred as they indicate efficient inventory management.

2. Days of Sales Outstanding (DSO):
- The DSO for Clearwater Paper Corp fluctuates across quarters. It has varied between 30.12 days in Q3 2023 and 34.97 days in Q2 2022. The company takes an average of 30 to 35 days to collect its accounts receivable. Lower DSO values are typically seen as favorable as they imply quicker cash conversion.

3. Number of Days of Payables:
- Clearwater Paper Corp's number of days of payables shows some variability, with a range of 33.31 days in Q3 2023 to 44.37 days in Q2 2022. This ratio reflects the average number of days the company takes to pay its suppliers. A longer period indicates that the company takes longer to settle its payables, which can be advantageous as it allows for better cash flow management.

In conclusion, Clearwater Paper Corp's activity ratios suggest that the company's inventory management is stable, while its accounts receivable and payable management show some fluctuation. The company may benefit from focusing on reducing DSO to improve cash flow efficiency and maintaining an appropriate balance between DOH and the number of days of payables to optimize working capital management.

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Long-term

Clearwater Paper Corp's long-term activity ratios, including fixed asset turnover and total asset turnover, provide insights into the efficiency of the company's asset utilization over time.

Fixed asset turnover measures how effectively the company is generating sales from its fixed assets. The trend in Clearwater Paper Corp's fixed asset turnover ratio shows a consistent increase from Q1 2022 to Q3 2023, indicating that the company has been able to generate more revenue from its fixed assets. The ratio has ranged from 1.73 to 2.12, with the latest value being 2.11 in Q4 2023.

Total asset turnover, on the other hand, reflects the company's overall efficiency in generating sales from all its assets. Clearwater Paper Corp's total asset turnover ratio has also shown a gradual increase over the quarters, ranging from 1.09 to 1.25, with the latest value at 1.25 in Q4 2023. This suggests that the company has been able to increase its sales relative to its total assets.

Overall, both fixed asset turnover and total asset turnover ratios for Clearwater Paper Corp have been on an upward trend, indicating an improvement in the company's asset utilization efficiency and effectiveness in generating revenue from its assets. Investors and stakeholders may view these trends positively as they suggest that the company is making better use of its assets to drive sales growth.