Core & Main Inc (CNM)

Short-term

Turnover ratios

Inventory turnover measures how efficiently a company manages its inventory by indicating how many times the company's inventory is sold and replaced within a specific period. Core & Main Inc's inventory turnover has been improving over the past three years, from 5.35 in 2022 to 7.78 in 2024. This trend suggests that the company is managing its inventory more efficiently.

Receivables turnover ratio reflects how well a company is collecting its accounts receivable. Core & Main Inc's receivables turnover has been relatively stable, with a slight decrease from 6.90 in 2023 to 6.80 in 2024. This indicates that the company is efficiently collecting payments from its customers.

Payables turnover ratio measures how efficiently a company pays its suppliers. Core & Main Inc's payables turnover has shown an increasing trend over the past three years, from 7.53 in 2022 to 11.83 in 2024. A higher payables turnover ratio suggests that the company is taking longer to pay its suppliers, which may indicate a more favorable working capital position.

Working capital turnover ratio assesses how effectively a company utilizes its working capital to generate sales. Core & Main Inc's working capital turnover has improved from 4.43 in 2023 to 6.63 in 2024, indicating that the company is generating more sales with the same amount of working capital.

Overall, Core & Main Inc's activity ratios show improvements in inventory management efficiency, stable receivables turnover, more favorable payment terms with suppliers, and effective utilization of working capital to drive sales growth over the past three years.

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Average number of days

The activity ratios of Core & Main Inc can provide insights into the company's efficiency in managing its inventory, collecting receivables, and paying suppliers.

1. Days of Inventory on Hand (DOH):
- In 2024, the company had 46.90 days of inventory on hand, which is a significant improvement from 65.04 days in 2023 and 68.23 days in 2022. This indicates that Core & Main has been able to efficiently manage its inventory levels and turn over its inventory more quickly in the most recent year.

2. Days of Sales Outstanding (DSO):
- The days of sales outstanding were 53.64 days in 2024, slightly higher compared to 52.93 days in 2023 but lower than 65.77 days in 2022. This suggests that Core & Main is taking slightly longer to collect its accounts receivable in the most recent year. It is important for the company to monitor its DSO to ensure timely collection of receivables and improve cash flow.

3. Number of Days of Payables:
- Core & Main's number of days of payables was 30.86 days in 2024, slightly higher compared to 29.75 days in 2023 and significantly lower than 48.46 days in 2022. A lower number of days of payables indicates that the company is paying its suppliers more quickly, which can impact its working capital management.

In conclusion, while Core & Main Inc has shown improvements in its inventory turnover and days of payables, there is a slight increase in the days of sales outstanding. The company may need to focus on optimizing its accounts receivable collection process to enhance overall efficiency and cash flow management.

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Long-term

The fixed asset turnover ratio for Core & Main Inc has shown a declining trend over the past three years, decreasing from 62.71 in January 2023 to 43.85 in January 2024. This indicates that the company generated less revenue per dollar of fixed assets invested in the business in the latest fiscal year compared to the previous years.

On the other hand, the total asset turnover ratio has remained relatively stable, with a slight decrease from 1.34 in January 2023 to 1.31 in January 2024. This suggests that Core & Main Inc continues to efficiently generate revenue from its total assets, although there was a slight decrease in the latest fiscal year.

Overall, the declining fixed asset turnover ratio may indicate potential inefficiencies in utilizing the company's fixed assets to generate revenue, while the stable total asset turnover ratio suggests that Core & Main Inc is maintaining its overall efficiency in generating revenue from its total asset base. Further analysis and comparison with industry benchmarks would provide a more comprehensive understanding of the company's long-term activity performance.