Campbell Soup Company Common Stock (CPB)

Short-term

Turnover ratios

Campbell Soup Company's inventory turnover has remained relatively stable over the past five years, with a range of 5.88 to 7.36. This indicates that the company is efficiently managing its inventory levels. The receivables turnover ratio has fluctuated but generally indicates that the company collects its receivables efficiently, with the highest turnover seen in 2023. The payables turnover ratio has also varied but suggests that Campbell Soup is effectively managing its accounts payable by making timely payments.

Due to the absence of data for the working capital turnover ratio, it is difficult to assess how effectively the company is utilizing its working capital to generate sales. Overall, based on the provided activity ratios, Campbell Soup appears to have good inventory and accounts receivable management practices, which are important indicators of operational efficiency and liquidity.

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Average number of days

Days of inventory on hand (DOH) measures how long it takes for a company to sell its inventory. Campbell Soup Company's DOH has been relatively consistent over the past five years, ranging from 49.61 days to 62.08 days. This suggests that the company has been managing its inventory levels effectively.

Days of sales outstanding (DSO) indicates the average number of days it takes for a company to collect its accounts receivable. Campbell Soup Company's DSO has fluctuated but generally improved over the last five years, indicating that the company has been efficient in collecting its receivables.

Number of days of payables represents how long it takes for a company to pay its suppliers. Campbell Soup Company's days of payables have shown some variability over the past five years but have generally improved. This may suggest that the company has been able to negotiate more favorable payment terms with its suppliers.

Overall, Campbell Soup Company has demonstrated efficient management of its inventory, improved effectiveness in collecting receivables, and better management of payables over the past five years based on its activity ratios.

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Long-term

Campbell Soup Company's long-term activity ratios indicate the efficiency of the company in utilizing its fixed assets and total assets to generate sales over a period of time. The fixed asset turnover ratio has shown a slight decline over the past five years, with values ranging from 3.57 to 3.90. This suggests that the company's fixed assets are being utilized less efficiently to generate revenue in recent years.

On the other hand, the total asset turnover ratio has also exhibited a decreasing trend from 0.70 to 0.78, indicating that Campbell Soup Company's overall asset utilization in generating sales has been less efficient over the same period. This decrease could be a cause for concern as it may indicate that the company is not effectively utilizing its total assets to generate revenue.

In conclusion, the declining trend in both the fixed asset turnover and total asset turnover ratios suggests that Campbell Soup Company may need to focus on improving its asset utilization efficiency to boost its long-term profitability and competitiveness in the market.