Edgewell Personal Care Co (EPC)

Short-term

Turnover ratios

The activity ratios of Edgewell Personal Care Co provide valuable insights into the efficiency of the company's operations over the past five years.

1. Inventory turnover: This ratio indicates how efficiently the company is managing its inventory. The trend shows a slight decrease from 3.40 in 2020 to 2.72 in 2024, which may suggest a potential issue with inventory management efficiency in recent years, leading to a longer duration for the company to sell its inventory.

2. Receivables turnover: This ratio reflects how quickly the company is collecting its accounts receivables. Over the five-year period, there has been a steady increase from 9.49 in 2020 to 13.73 in 2024, which is a positive sign of the company effectively managing its credit and collections process.

3. Payables turnover: The payables turnover ratio shows how quickly the company is paying its suppliers. The trend is relatively stable with fluctuations, ranging from 5.42 in 2021 to 6.74 in 2023, and then decreasing to 5.92 in 2024. A higher ratio typically indicates efficient management of payables, while a lower ratio may suggest potential liquidity issues or strained relationships with suppliers.

4. Working capital turnover: This ratio measures how well the company is utilizing its working capital to generate sales revenue. The trend shows fluctuations over the years with an overall increase from 4.12 in 2020 to 6.05 in 2024. A higher ratio indicates that the company is effectively using its working capital to generate sales, which is a positive indicator of operational efficiency.

In conclusion, while the inventory turnover ratio may raise concerns about inventory management efficiency, the increasing trends in receivables turnover and working capital turnover ratios reflect overall improvements in operational efficiency and cash flow management within Edgewell Personal Care Co. The fluctuations in payables turnover ratio may require further analysis to understand the company's payment practices and liquidity position.

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Average number of days

Analyzing the activity ratios of Edgewell Personal Care Co over the past five years, we can see some trends and changes in their operational efficiency.

1. Days of Inventory on Hand (DOH):
- The DOH has been increasing over the years, indicating that Edgewell Personal Care Co is taking longer to sell its inventory or is holding more inventory.
- The increase in DOH could suggest inefficiencies in inventory management, such as overstocking or slow-moving inventory.

2. Days of Sales Outstanding (DSO):
- The DSO has decreased steadily over the past five years, showing that Edgewell Personal Care Co is collecting its accounts receivable faster.
- A lower DSO typically indicates a more efficient accounts receivable management process, resulting in quicker cash collection.

3. Number of Days of Payables:
- The number of days of payables has fluctuated over the years but has generally increased compared to the previous year.
- An increase in the days of payables may suggest that Edgewell Personal Care Co is taking longer to pay its suppliers, possibly stretching out payment terms to preserve cash or manage working capital.

In summary, while Edgewell Personal Care Co has improved its accounts receivable collection efficiency, there are potential concerns regarding inventory management and accounts payable processes that may require further attention to enhance overall operational effectiveness.

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Long-term

The fixed asset turnover ratio measures how efficiently a company generates sales from its fixed assets. Edgewell Personal Care Co's fixed asset turnover has shown a consistently strong performance over the past five years, with values ranging from 5.26 to 6.66. This indicates that the company is effectively utilizing its fixed assets to generate sales, with a high turnover rate.

On the other hand, the total asset turnover ratio assesses the company's ability to generate sales from all of its assets, including both fixed and current assets. Edgewell Personal Care Co's total asset turnover has also been relatively stable, ranging from 0.55 to 0.60 over the same period. This suggests that the company is efficiently utilizing its total assets to generate revenue.

Overall, both the fixed asset turnover and total asset turnover ratios of Edgewell Personal Care Co indicate efficient utilization of assets to drive sales, with a particularly strong performance in terms of fixed asset turnover. This efficiency in asset utilization may contribute to the company's overall profitability and financial health.