Cavco Industries Inc (CVCO)

Short-term

Turnover ratios

Inventory Turnover:
- Cavco Industries Inc's inventory turnover has been relatively stable over the past few years, ranging between 4.99 and 7.77.
- The lower inventory turnover in recent quarters could indicate either slowing sales or excess inventory levels, which may lead to higher carrying costs or potential obsolescence.

Receivables Turnover:
- The company's receivables turnover ratio has fluctuated but generally remained within a reasonable range, with a peak of 16.96 and a low of 8.01.
- A higher receivables turnover indicates that the company is efficient in collecting payments from customers, while a lower ratio may suggest potential collection issues or credit risk.

Payables Turnover:
- Cavco Industries Inc's payables turnover ratio has shown significant variability, with values ranging from 23.30 to 60.02.
- A higher payables turnover implies the company is paying its suppliers more frequently, while a lower ratio could suggest liquidity constraints or extended payment terms with vendors.

Working Capital Turnover:
- The working capital turnover ratio has also varied over the years, with values fluctuating between 2.56 and 4.25.
- A higher working capital turnover ratio indicates that the company is effectively utilizing its working capital to generate sales, while a lower ratio may suggest inefficiencies in managing working capital.

Overall, further analysis and comparison with industry benchmarks are recommended to gain a deeper understanding of Cavco Industries Inc's performance in managing its operations and resources efficiently.

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Average number of days

Cavco Industries Inc's activity ratios provide insights into the efficiency of its operations in managing inventory, collecting receivables, and paying suppliers.

1. Days of Inventory on Hand (DOH):
- Cavco Industries Inc's DOH has shown fluctuating trends over the years, with a general increase from around 47 days in June 2020 to around 64 days in June 2024, before slightly decreasing to 60.05 days by December 2024.
- The increasing trend in DOH indicates that the company may be holding onto inventory for a longer period, potentially tying up capital and increasing storage costs. However, the recent decrease in the last period may signify improved inventory management.

2. Days of Sales Outstanding (DSO):
- The DSO for Cavco Industries Inc has varied over time, ranging from around 31 days to a peak of 45.55 days in March 2025.
- A lower DSO suggests that the company is able to collect receivables more quickly, improving cash flow. The increase in DSO in the most recent period may indicate challenges in collecting payments from customers promptly.

3. Number of Days of Payables:
- The number of days of payables for Cavco Industries Inc has shown a declining trend from around 15 days in June 2020 to around 6.44 days by December 2024.
- A lower number of days of payables implies that the company is taking longer to pay its suppliers. This could potentially strain relationships with suppliers if the trend continues.

Overall, the analysis of these activity ratios suggests that Cavco Industries Inc may need to focus on optimizing its inventory management, improving receivables collection efficiency, and balancing its payables to ensure healthy working capital management and operational efficiency.

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Long-term

The analysis of Cavco Industries Inc long-term activity ratios reveals interesting trends.

1. Fixed Asset Turnover: This ratio measures how efficiently the company is using its fixed assets to generate revenue. The ratio has shown fluctuations over the years, starting from 13.61 in June 2020, reaching a peak of 13.46 in December 2020, and then gradually declining to 8.99 in March 2022. There was a slight recovery by June 2022 at 10.16, with further improvements in subsequent periods. However, it is concerning to see the ratio drop to 9.08 by June 30, 2023, potentially indicating a decrease in asset utilization efficiency.

2. Total Asset Turnover: This ratio indicates how effectively the company is using all its assets to generate sales. Cavco Industries Inc demonstrated a consistent increase in total asset turnover from 1.26 in June 2020 to 1.72 in December 2022, showcasing improving efficiency in asset utilization during this period. However, there was a slight decrease in the ratio to 1.30 by June 30, 2024, and it remained relatively stable at around 1.30-1.40 until March 31, 2025. This suggests that while the company is efficient in generating revenue from its total assets, there might be some challenges in maintaining this efficiency.

In conclusion, Cavco Industries Inc should closely monitor its fixed asset turnover to ensure optimal utilization of its fixed assets and analyze the factors contributing to the fluctuations in both fixed asset turnover and total asset turnover to sustain and improve its long-term activity efficiency.