Cencora Inc. (COR)

Short-term

Turnover ratios

The inventory turnover ratio for Cencora Inc. has been relatively stable over the last five years, ranging from 13.47 to 14.95. This indicates that the company is efficiently managing its inventory levels and quickly converting inventory into sales.

Similarly, the receivables turnover ratio has also shown consistency, varying between 11.64 and 13.25. This suggests that Cencora Inc. has been effective in collecting its accounts receivable in a timely manner.

In terms of payables turnover, the company has maintained a steady range between 5.45 and 5.83 over the same period. A lower payables turnover ratio signifies that the company takes longer to pay its suppliers, which could indicate strong negotiation power or liquidity management.

Unfortunately, there is no data available to analyze the working capital turnover for Cencora Inc., which could have provided insights into how efficiently the company is using its working capital to generate sales.

Overall, based on the activity ratios provided, Cencora Inc. appears to have good control over its inventory, receivables, and payables, indicating effective management of its operating cycle.

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Average number of days

Activity ratios provide insights into how efficiently a company manages its assets and operations, specifically in terms of inventory, accounts receivable, and accounts payable.

1. Days of Inventory on Hand (DOH):
- In 2024, the company took approximately 24.41 days on average to sell its inventory, showing a slight improvement compared to the previous year.
- This indicates that Cencora Inc. effectively manages its inventory levels, with a decreasing trend over the years, implying quicker inventory turnover and potentially lower holding costs.

2. Days of Sales Outstanding (DSO):
- The DSO ratio in 2024 was 29.75 days, up from 29.22 days in the previous year.
- This ratio reflects the average number of days it takes for Cencora Inc. to collect its accounts receivable, with a longer DSO suggesting slower collections from customers.

3. Number of Days of Payables:
- Cencora Inc. took 65.46 days to pay its suppliers in 2024, slightly less than the previous year's figure of 66.07 days.
- A higher number of days of payables indicates that the company is taking longer to pay its suppliers, potentially improving cash flow in the short term.

Overall, when considering these activity ratios together, Cencora Inc. appears to be managing its working capital efficiently by effectively managing inventory levels, collecting receivables in a reasonable timeframe, and strategically balancing its payables. The minor fluctuations in these ratios suggest a consistent effort to optimize operational efficiency and cash flow management over the years.

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Long-term

The long-term activity ratios of Cencora Inc. indicate the efficiency with which the company is utilizing its fixed assets and total assets to generate sales revenue over the past five years.

Fixed asset turnover has shown an increasing trend from 98.93 in 2021 to 134.76 in 2024, indicating that the company is generating more sales revenue per dollar of fixed assets invested. This suggests improved efficiency in utilizing its long-term assets, such as property, plant, and equipment, to drive revenue growth.

On the other hand, total asset turnover shows fluctuations over the five-year period, with a peak of 4.38 in 2024 and a low of 3.73 in 2021. Despite the fluctuations, the overall trend indicates that Cencora Inc. is effectively generating sales relative to its total assets. The company's ability to generate sales revenue efficiently using both short-term and long-term assets highlights its operational effectiveness and potential for revenue growth.

Overall, the upward trend in fixed asset turnover and the fluctuating but relatively stable total asset turnover suggest that Cencora Inc. is efficiently utilizing its assets to drive sales and improve operational performance over the years.