Calavo Growers Inc (CVGW)
Activity ratios
Short-term
Turnover ratios
| Oct 31, 2023 | Oct 31, 2022 | Oct 31, 2021 | Oct 31, 2020 | Oct 31, 2019 | |
|---|---|---|---|---|---|
| Inventory turnover | 30.96 | 30.61 | 26.07 | 25.53 | 30.56 |
| Receivables turnover | 14.20 | 18.62 | 12.63 | 14.74 | 17.42 |
| Payables turnover | 62.90 | 113.89 | 108.51 | 113.69 | 64.72 |
| Working capital turnover | 18.75 | 50.10 | 27.97 | 34.58 | 32.46 |
The activity ratios for Calavo Growers, Inc provide insights into the company's efficiency in managing its inventory, receivables, payables, and working capital.
Starting with the inventory turnover, which measures how effectively the company is managing its inventory, we observe a decreasing trend from 2019 to 2023. This may indicate that the company is taking longer to sell its inventory, which could tie up capital and increase carrying costs.
Moving on to receivables turnover, we see fluctuations in this ratio over the years, indicating varying levels of efficiency in collecting receivables. The decrease in 2021 followed by an increase in 2022 and 2023 suggests potential changes in the company's credit policies or the nature of its customer base.
The payables turnover ratio exhibits a fluctuating pattern as well, although there is a general decreasing trend from 2019 to 2023. This could be a result of changes in the company's payment terms with suppliers or fluctuations in purchasing patterns.
Finally, the working capital turnover ratio, which measures how effectively the company is utilizing its working capital to generate sales, demonstrates a decreasing trend from 2019 to 2023. This indicates that the company is generating fewer sales relative to its investment in working capital, which could be a cause for concern.
In conclusion, the activity ratios reflect fluctuations and trends that may indicate changes in the efficiency of Calavo Growers, Inc's operations and financial management over the past five years. Further analysis and benchmarking against industry peers would provide deeper insights into the company's performance in these areas.
Average number of days
| Oct 31, 2023 | Oct 31, 2022 | Oct 31, 2021 | Oct 31, 2020 | Oct 31, 2019 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 11.79 | 11.92 | 14.00 | 14.30 | 11.94 |
| Days of sales outstanding (DSO) | days | 25.71 | 19.60 | 28.90 | 24.77 | 20.95 |
| Number of days of payables | days | 5.80 | 3.20 | 3.36 | 3.21 | 5.64 |
Calavo Growers, Inc's activity ratios provide insight into the efficiency of the company's operations and management of its working capital.
Firstly, the days of inventory on hand (DOH) measure the average number of days it takes for the company to sell its inventory. Over the past five years, there has been some fluctuation in the DOH, with an increase observed in 2023 compared to the previous year. This implies that the company is holding onto its inventory slightly longer, which could tie up its funds and lead to higher holding costs.
Secondly, the days of sales outstanding (DSO) indicate the average number of days it takes for the company to collect its accounts receivable. There has been some variability in this ratio as well, with a significant decrease in 2023 compared to 2021. This suggests an improvement in the efficiency of the company's credit and collection processes.
Finally, the number of days of payables measures the average number of days it takes for the company to pay its suppliers. This ratio has shown some variability, but overall, there has been a slight increase in the number of days of payables in 2023 compared to the previous year. This may indicate that the company is taking longer to settle its payables, potentially benefiting from improved cash flow.
Overall, while there have been fluctuations in Calavo Growers, Inc's activity ratios over the years, the company should continue to monitor and manage these ratios to optimize its working capital and maintain efficient operations.
Long-term
| Oct 31, 2023 | Oct 31, 2022 | Oct 31, 2021 | Oct 31, 2020 | Oct 31, 2019 | |
|---|---|---|---|---|---|
| Fixed asset turnover | 9.13 | 11.05 | 9.55 | 8.28 | 9.06 |
| Total asset turnover | 2.50 | 3.08 | 2.39 | 2.38 | 3.07 |
The long-term activity ratios for Calavo Growers, Inc, provide insight into the company's utilization of its assets to generate sales.
The fixed asset turnover ratio has fluctuated over the past five years, with a peak of 10.51 in 2022 and a low of 8.13 in 2020. In 2023, the ratio decreased to 8.62. This indicates that in 2023, the company generated $8.62 in sales for every dollar invested in fixed assets. Although the ratio decreased from the previous year, it still reflects efficient utilization of fixed assets to generate revenue.
The total asset turnover ratio has also varied, reaching a high of 3.09 in 2022 and a low of 2.37 in 2021. In 2023, the ratio decreased to 2.51. This indicates that in 2023, the company generated $2.51 in sales for every dollar invested in total assets. While the ratio decreased from the previous year, it suggests that the company effectively utilized its assets to generate revenue.
Overall, despite the fluctuations in these ratios, Calavo Growers, Inc has demonstrated efficient utilization of both fixed and total assets to generate sales over the past five years. However, the decreasing trend in these ratios warrants further analysis to ensure continued efficiency in asset utilization.