Deluxe Corporation (DLX)

Short-term

Turnover ratios

Based on the provided data, let's analyze the activity ratios of Deluxe Corporation for the years 2020 to 2024.

1. Inventory Turnover:
- Inventory turnover measures how efficiently a company manages its inventory. A higher ratio indicates that inventory is selling quickly.
- Deluxe Corporation's inventory turnover has been increasing over the years, from 18.21 in 2020 to 27.35 in 2024. This indicates that the company is selling its inventory at a faster rate.

2. Receivables Turnover:
- Receivables turnover measures how quickly a company collects its accounts receivable. A higher ratio suggests efficient collection of sales.
- The data provided shows that receivables turnover is not available for any of the years, which makes it difficult to assess the efficiency of the company in collecting its receivables.

3. Payables Turnover:
- Payables turnover ratio measures how quickly a company pays its suppliers. A higher ratio may indicate favorable credit terms or efficient management of payables.
- Similar to receivables turnover, payables turnover data is not available for any of the years, making it challenging to evaluate the company's payment practices.

4. Working Capital Turnover:
- Working capital turnover ratio indicates how effectively the company is utilizing its working capital to generate revenue.
- In this case, working capital turnover is only provided for 2020, with a ratio of 18.89. The absence of data for the subsequent years limits the ability to track the trend in the company's working capital efficiency.

Overall, while Deluxe Corporation's inventory turnover has shown a positive trend, the lack of data for receivables and payables turnover ratios hinders a comprehensive assessment of the company's overall activity efficiency over the years. It would be beneficial to have complete data for all activity ratios to provide a more in-depth analysis of the company's operational performance.

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Average number of days

Based on the provided data for Deluxe Corporation's activity ratios, here is a detailed analysis:

1. Days of Inventory on Hand (DOH): The days of inventory on hand decreased from 20.04 days on December 31, 2020, to 13.35 days on December 31, 2024. This decline indicates that Deluxe Corporation has been managing its inventory more efficiently over the years. A lower DOH suggests faster inventory turnover, which can lead to reduced holding costs and potentially higher profits.

2. Days of Sales Outstanding (DSO): The data shows that the days of sales outstanding are not provided for any of the years from 2020 to 2024. Without this information, it is not possible to evaluate how quickly Deluxe Corporation is collecting its accounts receivable from customers. A lower DSO would indicate a faster collection of receivables and better liquidity for the company.

3. Number of Days of Payables: Similar to DSO, information on the number of days of payables is not available for the years 2020 to 2024. This ratio would have provided insights into how long Deluxe Corporation takes to pay its suppliers. A longer period indicates better cash flow management for the company, as it can hold onto cash longer before settling payables.

Overall, from the available data, it can be inferred that Deluxe Corporation has been effectively managing its inventory levels, but a lack of information on DSO and payables hinders a comprehensive analysis of the company's overall efficiency in managing working capital and cash flow.

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Long-term

Deluxe Corporation's Fixed Asset Turnover ratio has fluctuated over the years. In 2020, the company had a high Fixed Asset Turnover of 20.19, indicating that Deluxe efficiently generated revenue from its investment in fixed assets. However, this ratio dropped to 10.62 in 2021, showing a decrease in the efficiency of utilizing fixed assets to generate sales. In 2022, the ratio improved to 13.01, suggesting a better utilization of fixed assets.

On the other hand, the Total Asset Turnover ratio indicates how efficiently Deluxe Corporation generated sales from all its assets. The company had a Total Asset Turnover of 0.96 in 2020, which decreased to 0.66 in 2021, indicating a decline in the overall efficiency of asset utilization. However, there was a slight improvement in 2022 with a Total Asset Turnover of 0.73, and further improvement in 2024 with a ratio of 0.75.

Overall, while Deluxe Corporation's Fixed Asset Turnover ratio has shown fluctuations, its Total Asset Turnover ratio has also varied over the years. It is important for the company to analyze these ratios in conjunction with other financial metrics to assess the effectiveness of its asset utilization strategies and make informed business decisions.