Brinker International Inc (EAT)

Short-term

Turnover ratios

Brinker International Inc's inventory turnover has been relatively stable over the past five years, ranging from 40.02 to 46.93. This indicates that the company efficiently manages its inventory by quickly selling through its stock, which is a positive sign of effective inventory management.

The receivables turnover for Brinker International Inc has shown an increasing trend over the same period, indicating that the company is collecting its accounts receivable more efficiently. The ratios have increased from 35.10 in 2020 to 72.86 in 2024.

In terms of payables turnover, Brinker International Inc’s performance has fluctuated, but overall it has stayed relatively consistent, with values ranging from 9.26 to 12.43. A higher payables turnover ratio suggests that the company is paying its suppliers more frequently, which can indicate efficient cash management.

Regarding the working capital turnover, the data is missing for all years, so it is challenging to assess the efficiency of Brinker International Inc in utilizing its working capital to generate sales.

In conclusion, Brinker International Inc demonstrates strong efficiency in managing its inventory and collecting receivables. While the company's payables turnover has been relatively stable, further analysis of the working capital turnover is required to provide a comprehensive assessment of the company's activity ratios.

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Average number of days

Days of Inventory on Hand (DOH):
- The DOH measures how many days, on average, inventory is held before being sold.
- Brinker International Inc's DOH decreased from 8.06 days in 2023 to 7.78 days in 2024, indicating a more efficient inventory management in the most recent year.
- The trend over the last five years shows a general improvement in managing inventory, with a gradual decrease in DOH from 9.12 days in 2022 to 7.78 days in 2024.

Days of Sales Outstanding (DSO):
- DSO reflects the average number of days it takes for a company to collect revenue after a sale is made.
- Brinker International Inc's DSO declined from 5.38 days in 2023 to 5.01 days in 2024, showing an improvement in collecting receivables efficiently.
- Over the past five years, the company has significantly reduced its DSO, signaling better credit management and quicker collection of sales proceeds.

Number of Days of Payables:
- This ratio indicates how long it takes for Brinker International Inc to pay its suppliers.
- The number of days of payables increased from 29.35 days in 2023 to 36.20 days in 2024, suggesting a lengthening of the time taken to settle payables.
- Despite the recent increase, the company's payment period has fluctuated over the last five years, showing a mix of longer and shorter periods for settling payables.

Overall Assessment:
- Brinker International Inc has shown improvements in managing its inventory efficiently and collecting receivables promptly.
- However, the company's payment period to suppliers has been more inconsistent, with fluctuations observed over the years.
- The trends in these activity ratios indicate that Brinker International Inc has focused on optimizing its working capital management, which plays a crucial role in the company's overall financial health and operational performance.

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Long-term

The long-term activity ratios provide insights into how efficiently Brinker International Inc is utilizing its assets to generate revenue.

1. Fixed Asset Turnover:
- The fixed asset turnover ratio has been relatively stable over the past five years, ranging from 3.82 to 5.11.
- A higher fixed asset turnover ratio indicates that the company is effectively using its fixed assets to generate sales. Brinker International Inc has shown an increasing trend in this ratio, which suggests improved efficiency in utilizing its fixed assets.
- The company's ability to generate sales from its fixed assets has been consistently strong, with the ratio staying above 4.0 for the last three years.

2. Total Asset Turnover:
- The total asset turnover ratio has also exhibited a positive trend over the years, increasing from 1.31 in 2020 to 1.70 in 2024.
- This ratio reflects Brinker International Inc's overall ability to generate sales from all its assets. The increasing trend indicates that the company is becoming more efficient in utilizing its total assets to generate revenue.
- The company's performance in terms of total asset turnover has been improving steadily, with the ratio consistently increasing year over year.

Overall, both the fixed asset turnover and total asset turnover ratios indicate that Brinker International Inc has been increasingly efficient in utilizing its assets to generate revenue over the past five years. This improvement suggests enhanced operational efficiency and effective asset management practices within the company.