Flowers Foods Inc (FLO)

Short-term

Turnover ratios

Flowers Foods Inc's activity ratios provide insights into the efficiency with which the company manages its resources and operations.

1. Inventory Turnover: The inventory turnover ratio indicates how many times the company sells and replaces its inventory during a specific period. Flowers Foods Inc has maintained relatively consistent inventory turnover over the years, with a peak in 2020. The high turnover rate suggests that the company efficiently manages its inventory levels and successfully turns inventory into sales.

2. Receivables Turnover: The receivables turnover ratio shows how quickly the company collects payments from customers. Flowers Foods Inc has shown steady improvement in its receivables turnover, indicating effective credit management and prompt collection of receivables. A higher turnover rate implies that the company efficiently converts credit sales into cash.

3. Payables Turnover: The payables turnover ratio reflects how well the company manages its trade payables. Flowers Foods Inc has experienced fluctuations in its payables turnover, with a decrease in 2022. A higher turnover rate indicates that the company pays its suppliers promptly, which can help maintain good relationships and possibly negotiate favorable credit terms.

4. Working Capital Turnover: The working capital turnover ratio measures how effectively the company utilizes its working capital to generate sales. Flowers Foods Inc has shown a significant improvement in this ratio from 2019 to 2023. A high turnover rate signifies that the company efficiently utilizes its working capital to support revenue-generating activities.

In conclusion, Flowers Foods Inc's activity ratios reflect efficient management of inventory, receivables, payables, and working capital over the years. These ratios demonstrate strong operational performance and effective resource utilization strategies within the company.

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Average number of days

Activity ratios provide insight into how efficiently a company manages its assets and liabilities. Let's analyze the activity ratios of Flowers Foods Inc based on the given data.

1. Days of Inventory on Hand (DOH):
The trend of DOH shows a slight increase from 2019 to 2021, indicating that the company may be carrying more inventory relative to its sales. However, in 2023, there was a slight increase followed by a decrease compared to the previous year, suggesting improved inventory management efficiency.

2. Days of Sales Outstanding (DSO):
The DSO trend indicates a decrease in the number of days it takes for the company to collect on its sales from 2019 to 2023. This implies that Flowers Foods Inc has been more efficient in collecting its accounts receivable over the years, which is a positive sign for cash flow management.

3. Number of Days of Payables:
The trend of days of payables shows fluctuations over the years, with an overall increase from 2019 to 2023. A higher number of days of payables suggests that the company is taking longer to pay its suppliers, which can be advantageous for cash flow management. However, companies need to strike a balance to maintain good relationships with suppliers.

Overall, analyzing these activity ratios together provides a comprehensive view of how Flowers Foods Inc manages its working capital components - inventory, accounts receivable, and accounts payable. The company's effective management of these ratios can contribute to its overall operational efficiency and financial health.

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Long-term

The long-term activity ratios of Flowers Foods Inc indicate the efficiency of the company in utilizing its assets to generate revenue over the last five years.

Fixed asset turnover, which measures how well the company generates sales from its investments in fixed assets, has been quite stable, ranging from 5.29 in 2023 to a high of 6.27 in 2020. This indicates that Flowers Foods has been able to efficiently utilize its fixed assets to generate sales consistently over the years.

On the other hand, total asset turnover, which shows the company's ability to generate sales from all its assets, has shown a slight increasing trend from 1.30 in 2019 to 1.49 in 2023. This suggests that Flowers Foods has been able to generate more sales relative to its total assets, indicating improved efficiency in asset utilization.

Overall, the steady performance in fixed asset turnover and the increasing trend in total asset turnover suggest that Flowers Foods has been effectively managing its assets to drive revenue generation, which is a positive signal for long-term operational efficiency and financial health.