Flowers Foods Inc (FLO)

Short-term

Turnover ratios

Flowers Foods Inc's activity ratios reflect the efficiency of the company's management in utilizing its assets to generate sales and cash flows.

1. Inventory Turnover: The inventory turnover ratio measures how many times a company sells and replaces its inventory in a given period. Flowers Foods Inc's inventory turnover has shown a slight decrease over the years, from 11.36 in 2020 to 9.81 in 2024. This indicates that the company is taking longer to sell its inventory, which may tie up capital and potentially lead to increased storage costs.

2. Receivables Turnover: The receivables turnover ratio gauges how efficiently a company collects on its credit sales. However, the data provided shows that Flowers Foods Inc did not have any receivables turnover figures reported for any of the years, which may suggest that the company does not extend credit terms to customers or does not rely significantly on credit sales.

3. Payables Turnover: The payables turnover ratio evaluates how quickly a company pays its suppliers. Similar to receivables turnover, there are no payables turnover figures available for Flowers Foods Inc. This could indicate that the company manages its payables in a manner that does not generate turnover ratios or it does not heavily rely on trade credit.

4. Working Capital Turnover: The working capital turnover ratio measures how efficiently a company utilizes its working capital to generate revenue. Flowers Foods Inc's working capital turnover has significantly fluctuated over the years, from 8.60 in 2020 to a peak of 178.24 in 2023, before declining to 47.36 in 2024. The sharp increase in 2023 suggests a significant improvement in utilizing working capital, while the subsequent decrease in 2024 may indicate changes in the company's operational and financial strategies.

In conclusion, while the inventory turnover ratios point to a possible inefficiency in managing inventory, the lack of data for receivables and payables turnover ratios makes it challenging to fully assess Flowers Foods Inc's efficiency in managing its working capital and operating cycle. Monitoring these ratios over time can provide insights into the company's operational efficiency and liquidity management.

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Average number of days

Based on the provided data for Flowers Foods Inc, we can analyze the following activity ratios:

1. Days of Inventory on Hand (DOH):
- The company had 32.13 days of inventory on hand as of December 31, 2020, which increased to 34.14 days by December 31, 2021.
- This trend continued with the DOH reaching 35.35 days on December 31, 2022, and further increasing to 37.56 days on December 31, 2023.
- However, there was a slight decrease in the DOH to 37.20 days by December 31, 2024.
- Overall, the increasing trend in DOH indicates that Flowers Foods Inc might be holding onto its inventory for a longer period, which could potentially tie up capital and impact liquidity.

2. Days of Sales Outstanding (DSO):
- The data provided does not include information on Days of Sales Outstanding (DSO), which measures the average number of days it takes for a company collect revenue after a sale. Without this data, we cannot analyze the efficiency of Flowers Foods Inc in collecting its accounts receivable.

3. Number of Days of Payables:
- Similar to DSO, the information on the Number of Days of Payables is not provided in the data set. This ratio typically reflects the average number of days a company takes to pay its suppliers.
- Without this data, it is challenging to assess how effectively Flowers Foods Inc manages its payables and potential cash flow implications.

In summary, the analysis of activity ratios for Flowers Foods Inc based on the provided data shows an increasing trend in Days of Inventory on Hand. However, the lack of information on Days of Sales Outstanding and Number of Days of Payables limits a comprehensive assessment of the company's overall efficiency in managing its working capital and cash flow.

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Long-term

Flowers Foods Inc's fixed asset turnover ratio, which measures the efficiency of the company in generating sales from its fixed assets, has shown some fluctuations over the years. In 2020, the ratio was at a relatively high 6.22, indicating that the company was generating $6.22 in sales for every $1 of fixed assets. However, this ratio declined to 3.97 in 2021, indicating a decrease in efficiency. It then improved to 5.58 in 2022 before data became unavailable for 2023 and 2024.

On the other hand, the total asset turnover ratio, which assesses the company's ability to generate sales from all its assets, remained relatively stable and increased slightly over the years. The ratio was 1.32 in 2020 and 1.33 in 2021, indicating that the company generated $1.33 in sales for every $1 of total assets. The ratio continued to improve, reaching 1.50 in 2024, suggesting an enhanced efficiency in utilizing all assets to generate revenue.

In summary, the fixed asset turnover ratio showed more variability compared to the total asset turnover ratio, indicating fluctuations in the company's efficiency in utilizing fixed assets to generate sales. The upward trend in the total asset turnover ratio suggests an overall improvement in the company's ability to generate sales from all its assets.