Columbia Sportswear Company (COLM)

Short-term

Turnover ratios

1. Inventory Turnover:
Columbia Sportswear Co.'s inventory turnover has shown some fluctuations over the past five years, ranging from 1.70 to 2.52 times. The ratio indicates how efficiently the company manages its inventory levels. In 2023, the inventory turnover improved to 2.35 times, suggesting that the company was able to sell and replace its inventory more efficiently compared to the previous year.

2. Receivables Turnover:
The receivables turnover ratio reflects how effectively the company collects payments from its customers. Columbia Sportswear Co. has shown consistent improvement in its receivables turnover over the years, with the ratio increasing from 5.52 in 2020 to 8.24 in 2023. This indicates that the company has been able to collect its receivables at a faster pace, which is a positive trend for its liquidity and cash flow.

3. Payables Turnover:
The payables turnover ratio measures how quickly a company pays its suppliers. Columbia Sportswear Co. has also shown a positive trend in its payables turnover, with the ratio increasing from 5.44 in 2022 to 7.45 in 2023. This suggests that the company is settling its payables more efficiently, which could indicate good relationships with suppliers or better cash management practices.

4. Working Capital Turnover:
The working capital turnover ratio evaluates how effectively a company utilizes its working capital to generate sales. Columbia Sportswear Co. has maintained a relatively stable range for this ratio over the past five years, with the highest value of 2.48 in 2022. In 2023, the ratio slightly decreased to 2.46, indicating a slight decline in the efficiency of using working capital to generate revenue.

Overall, the activity ratios of Columbia Sportswear Co. show improvements in inventory turnover, receivables turnover, and payables turnover, reflecting better inventory management, faster collection of receivables, and efficient payment of payables. However, a slight decline in working capital turnover suggests a small decrease in the effectiveness of utilizing working capital for generating sales in 2023 compared to the previous year.

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Average number of days

Activity ratios are a key tool in assessing a company's efficiency in managing its resources. Let's analyze Columbia Sportswear Co.'s activity ratios based on the data provided:

1. Days of Inventory on Hand (DOH):
- In 2023, the company had 155.01 days of inventory on hand, which represents a decrease compared to the previous year.
- A lower DOH indicates that the company is selling its inventory more quickly, which can be a positive sign of efficient inventory management.

2. Days of Sales Outstanding (DSO):
- The DSO measures how long it takes for the company to collect its accounts receivable.
- In 2023, Columbia Sportswear Co. had a DSO of 44.28 days, indicating an improvement from the previous year.
- A lower DSO suggests that the company is collecting payments from customers more quickly, which can improve cash flow.

3. Number of Days of Payables:
- The number of days of payables measures how long it takes the company to pay its suppliers.
- In 2023, Columbia Sportswear Co. had 49.00 days of payables, which was lower compared to the prior year.
- A lower number of days of payables may indicate that the company is managing its payables more efficiently or negotiating better payment terms with suppliers.

Overall, the trend of decreasing DOH, improving DSO, and lower days of payables in 2023 compared to the previous year suggests that Columbia Sportswear Co. has been enhancing its efficiency in managing inventory, collecting payments, and paying suppliers. This can positively impact the company's liquidity and overall financial health.

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Long-term

Columbia Sportswear Co.'s long-term activity ratios indicate the efficiency of the company in utilizing its assets to generate sales over the years. The fixed asset turnover has been consistently increasing from 8.78 in 2019 to 12.14 in 2023, showing a positive trend. This suggests that the company is generating more revenue relative to its investment in fixed assets, which could indicate improved operational efficiency and better utilization of its long-term assets.

Furthermore, the total asset turnover has also shown a positive trend, with an increase from 0.88 in 2020 to 1.19 in 2023. This indicates that the company is generating more sales in relation to its total assets, showcasing an improvement in overall asset utilization efficiency.

Overall, the increasing trends in both fixed asset turnover and total asset turnover ratios suggest that Columbia Sportswear Co. has been effectively managing and utilizing its long-term assets to generate sales, potentially leading to higher profitability and sustainable growth in the long run.