Fresh Del Monte Produce Inc (FDP)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Inventory turnover | 6.59 | 6.62 | 6.13 | 6.55 | 7.78 |
| Receivables turnover | 8.35 | 8.21 | 8.81 | 8.93 | 9.66 |
| Payables turnover | 15.66 | 14.20 | 12.61 | 11.27 | 13.38 |
| Working capital turnover | 7.14 | 7.16 | 7.00 | 9.10 | 9.19 |
Fresh Del Monte Produce Inc's activity ratios provide insights into how efficiently the company manages its operations in terms of inventory, receivables, payables, and working capital turnover.
1. Inventory Turnover:
- The inventory turnover ratio indicates how many times Fresh Del Monte Produce Inc sells and replaces its inventory during a period.
- The trend shows a slight decrease over the years, from 7.78 in 2020 to 6.59 in 2024. This suggests a potential decrease in the efficiency of inventory management.
2. Receivables Turnover:
- The receivables turnover ratio measures how efficiently Fresh Del Monte Produce Inc collects cash from its customers.
- The trend shows a gradual decline from 9.66 in 2020 to 8.35 in 2024, indicating a slower collection of receivables, which may lead to cash flow challenges.
3. Payables Turnover:
- The payables turnover ratio assesses how quickly Fresh Del Monte Produce Inc pays its suppliers.
- The trend displays an increasing pattern from 13.38 in 2020 to 15.66 in 2024, indicating that the company is taking longer to pay its suppliers, potentially benefiting from extended payment terms.
4. Working Capital Turnover:
- The working capital turnover ratio evaluates how effectively Fresh Del Monte Produce Inc utilizes its working capital to generate sales.
- The trend shows a fluctuation, with a slight decrease from 9.19 in 2020 to 7.14 in 2024. This suggests a potential decline in the efficiency of working capital utilization over the years.
Overall, the analysis of Fresh Del Monte Produce Inc's activity ratios indicates areas where the company may need to improve its efficiency in managing inventory, receivables, payables, and working capital to enhance overall 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 | 55.40 | 55.15 | 59.53 | 55.73 | 46.90 |
| Days of sales outstanding (DSO) | days | 43.70 | 44.43 | 41.43 | 40.87 | 37.80 |
| Number of days of payables | days | 23.31 | 25.70 | 28.95 | 32.39 | 27.29 |
Fresh Del Monte Produce Inc's activity ratios indicate the efficiency of its operations in managing inventory, collecting receivables, and paying suppliers.
1. Days of Inventory on Hand (DOH):
- The company's DOH has increased from 46.90 days in 2020 to 55.40 days in 2024.
- This suggests that Fresh Del Monte Produce Inc is holding inventory for a longer period before selling, which may tie up capital and increase storage costs.
2. Days of Sales Outstanding (DSO):
- DSO has also increased from 37.80 days in 2020 to 43.70 days in 2024.
- This indicates that the company is taking longer to collect payments from customers, potentially impacting its cash flow and liquidity.
3. Number of Days of Payables:
- On the positive side, the number of days of payables has decreased from 27.29 days in 2020 to 23.31 days in 2024.
- A lower number of days of payables suggests that Fresh Del Monte Produce Inc is paying its suppliers more promptly, which may improve relationships with suppliers and possibly lead to better credit terms.
Overall, the trend in these activity ratios suggests that Fresh Del Monte Produce Inc's operational efficiency may be declining, with longer inventory turnover and collection periods, although there has been improvement in the payment cycle. Monitoring and managing these ratios can help the company optimize working capital and improve overall financial performance.
Long-term
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Fixed asset turnover | 3.59 | 3.44 | 3.39 | 3.00 | 2.96 |
| Total asset turnover | 1.38 | 1.36 | 1.28 | 1.25 | 1.29 |
Fresh Del Monte Produce Inc's long-term activity ratios show positive trends over the years.
1. Fixed Asset Turnover: The company's fixed asset turnover has been steadily increasing from 2.96 in December 2020 to 3.59 in December 2024. This indicates that Fresh Del Monte Produce Inc has been able to generate more revenue from its fixed assets over time, reflecting improved efficiency in asset utilization.
2. Total Asset Turnover: Similarly, the total asset turnover ratio has shown a slight fluctuation but generally an increasing trend from 1.29 in December 2020 to 1.38 in December 2024. This suggests that the company has been more effective in generating sales revenue in relation to its total assets, indicating an improvement in overall asset management efficiency.
Overall, the increasing trend in both fixed asset turnover and total asset turnover ratios reflects a positive development in Fresh Del Monte Produce Inc's ability to generate sales from its assets, demonstrating improved efficiency in utilizing its assets to generate revenues over the long term.