Fortune Brands Innovations Inc. (FBIN)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Inventory turnover | 4.03 | 4.08 | 2.73 | 3.19 | 1.68 |
| Receivables turnover | 8.96 | 8.66 | 9.05 | 5.42 | 4.93 |
| Payables turnover | 7.53 | 7.06 | 6.62 | 5.06 | 2.35 |
| Working capital turnover | 11.38 | 5.47 | 5.16 | 6.21 | 4.19 |
Inventory turnover for Fortune Brands Innovations Inc. has shown an increasing trend from 1.68 in 2020 to 4.03 in 2024, indicating that the company is selling its inventory more efficiently over the years.
Receivables turnover has also improved over the same period, from 4.93 in 2020 to 8.96 in 2024, showing that the company is collecting its receivables at a faster rate.
Payables turnover has seen a steady increase from 2.35 in 2020 to 7.53 in 2024, suggesting that the company is managing its payables more effectively.
Working capital turnover has shown significant growth, from 4.19 in 2020 to 11.38 in 2024, indicating that the company is generating more revenue relative to its working capital.
Overall, the activity ratios of Fortune Brands Innovations Inc. demonstrate improving efficiency in managing inventory, receivables, payables, and working capital, which is a positive sign for the company's operational performance and financial health.
Average number of days
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 90.55 | 89.38 | 133.61 | 114.30 | 217.26 |
| Days of sales outstanding (DSO) | days | 40.74 | 42.15 | 40.33 | 67.33 | 74.07 |
| Number of days of payables | days | 48.45 | 51.69 | 55.15 | 72.09 | 155.46 |
Based on the provided data, let's analyze the activity ratios of Fortune Brands Innovations Inc.:
1. Days of Inventory on Hand (DOH):
- The company's inventory turnover has improved over the years, as reflected by a decrease in the days of inventory on hand.
- From 217.26 days in 2020, the DOH decreased to 114.30 days in 2021, indicating a more efficient management of inventory.
- There was a slight increase in DOH in 2022 to 133.61 days, but the ratio then declined significantly to 89.38 days in 2023, showcasing improved inventory management.
- In 2024, the DOH increased slightly to 90.55 days, indicating a relatively stable inventory turnover.
2. Days of Sales Outstanding (DSO):
- The DSO ratio reflects the number of days it takes for the company to collect its accounts receivable.
- Fortune Brands saw a consistent decrease in DSO over the years from 74.07 days in 2020 to 40.74 days in 2024.
- This implies that the company has been efficient in collecting payments from its customers, which is a positive sign of effective credit management and liquidity.
3. Number of Days of Payables:
- The days of payables represent the average number of days it takes the company to pay its suppliers.
- Fortune Brands managed to decrease its payment period significantly over the years from 155.46 days in 2020 to 48.45 days in 2024.
- This reduction suggests that the company has been able to negotiate better payment terms with suppliers or is managing its working capital more effectively.
In conclusion, based on the activity ratios analysis, Fortune Brands Innovations Inc. has shown improvements in managing its inventory turnover, accounts receivable collection, and supplier payment periods over the years. These trends indicate the company's focus on operational efficiency and effective working capital management.
Long-term
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Fixed asset turnover | 4.61 | 4.74 | 6.03 | 7.16 | 3.95 |
| Total asset turnover | 0.70 | 0.70 | 0.77 | 0.60 | 0.49 |
Long-term activity ratios provide insights into how efficiently a company is utilizing its assets over an extended period.
1. Fixed Asset Turnover:
- The fixed asset turnover ratio indicates the company's ability to generate sales from its investment in fixed assets.
- The trend for Fortune Brands Inc. shows an improvement from 3.95 in 2020 to 6.03 in 2022, followed by a slight decrease to 4.61 in 2024.
- A higher fixed asset turnover ratio signifies that Fortune Brands is generating more revenue per dollar invested in fixed assets.
- Despite the minor decline in 2024, the company is efficiently utilizing its fixed assets to drive sales.
2. Total Asset Turnover:
- The total asset turnover ratio measures how efficiently a company generates revenue from its total assets.
- Fortune Brands Inc. has shown a consistent total asset turnover ratio across the years, ranging from 0.49 in 2020 to 0.70 in 2023 and 2024.
- This stability indicates that the company is effectively utilizing its total assets to generate revenue.
- However, there is room for potential improvement in further increasing the efficiency of asset utilization to boost revenue generation.
In summary, Fortune Brands Innovations Inc. demonstrates a positive trend in its fixed asset turnover, signifying efficient utilization of fixed assets to generate sales. Additionally, the stable total asset turnover ratio reflects a consistent ability to generate revenue from total assets. Efforts to continue improving asset utilization can further enhance the company's operational efficiency and financial performance.