Edgewell Personal Care Co (EPC)

Short-term

Turnover ratios

Activity ratios provide insight into how efficiently a company is managing its assets and liabilities. Let's analyze the activity ratios of Edgewell Personal Care Co over the past eight quarters:

1. Inventory Turnover:
- The inventory turnover ratio measures how many times a company sells and replaces its inventory during a specific period.
- Edgewell's inventory turnover has been relatively stable over the quarters, ranging from 2.40 to 3.07.
- A higher ratio indicates efficient management of inventory, and Edgewell's ratios suggest that the company is turning over its inventory adequately.

2. Receivables Turnover:
- Receivables turnover ratio shows how efficiently a company is collecting its accounts receivable.
- Edgewell's receivables turnover has shown an increasing trend from Q2 2022 to Q4 2023, indicating that the company is collecting its receivables at a faster rate.
- Higher turnover ratios are favorable as they imply quicker conversion of credit sales into cash.

3. Payables Turnover:
- Payables turnover ratio measures how quickly a company pays its suppliers.
- Edgewell's payables turnover has been relatively consistent, hovering around 5.30 to 6.74.
- A higher payables turnover ratio suggests that the company is managing its payables efficiently by paying its suppliers on time.

4. Working Capital Turnover:
- The working capital turnover ratio reflects how effectively a company utilizes its working capital to generate sales.
- Edgewell's working capital turnover has fluctuated but generally remained within a reasonable range.
- An increasing trend in working capital turnover indicates that Edgewell is generating more sales with its available working capital.

In conclusion, Edgewell Personal Care Co's activity ratios suggest efficient management of its inventory, receivables, payables, and working capital over the analyzed quarters. The company appears to be effectively utilizing its resources to drive sales and manage its operating cycle.

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Average number of days

Days of Inventory on Hand (DOH) measures how efficiently a company manages its inventory by indicating the average number of days inventory is held before being sold. Over the past eight quarters, Edgewell Personal Care Co's average DOH ranged from 118.77 days to 151.79 days. The trend shows some fluctuations, but on average, the company holds inventory for around 130-150 days before selling it.

Days of Sales Outstanding (DSO) reflects how long it takes for the company to collect its accounts receivable. Edgewell's DSO has ranged from 20.28 days to 42.08 days over the same eight quarters, indicating variability in the collection period. The company's ability to convert credit sales into cash has improved from the highest to the lowest DSO figures over this period.

Number of Days of Payables indicates how long a company takes to pay its suppliers. Edgewell's average days of payables have stayed within a relatively narrow range of 54.13 days to 68.84 days over the past eight quarters. This suggests the company maintains a consistent payment schedule with its suppliers.

Overall, Edgewell Personal Care Co's activity ratios show that the company's inventory management efficiency and accounts receivable collection have improved over the quarters studied, while its payment practices to suppliers have remained stable.

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Long-term

Edgewell Personal Care Co's long-term activity ratios provide insights into how efficiently the company is utilizing its assets to generate revenue.

1. Fixed asset turnover: This ratio indicates the efficiency of the company in generating sales from its fixed assets. Edgewell's fixed asset turnover has been relatively stable over the quarters, ranging from 5.99 to 6.81. A higher fixed asset turnover is generally preferred as it suggests that the company is effectively utilizing its fixed assets to generate sales. In this case, Edgewell's consistent and high fixed asset turnover indicates strong operational efficiency in utilizing its fixed assets.

2. Total asset turnover: This ratio measures the company's ability to generate sales from all of its assets. Edgewell's total asset turnover has also been steady, ranging from 0.56 to 0.60. The stability and relatively high values of this ratio suggest that Edgewell is efficiently using its total assets to generate sales. However, it is important to note that a very high total asset turnover ratio may indicate that the company is aggressively turning over its assets, which could raise concerns about the sustainability of its operations in the long term.

Overall, the consistent and relatively high values of both fixed asset turnover and total asset turnover ratios for Edgewell Personal Care Co indicate efficient asset utilization and effective management of its resources to drive revenue generation.