H B Fuller Company (FUL)

Short-term

Turnover ratios

H B Fuller Company's inventory turnover, which measures how efficiently the company manages its inventory, has been relatively consistent over the past five years, ranging from 5.36 to 6.29 times. A decreasing trend in inventory turnover may indicate overstocking or slow-moving inventory.

The receivables turnover ratio, reflecting how quickly the company collects its outstanding receivables, shows a slight increase from 5.33 to 6.39 times over the same period. This improvement suggests the company has been more effective in collecting payments from its customers.

The payables turnover ratio, indicating how quickly the company pays its suppliers, fluctuated between 4.86 and 6.43 times. A lower turnover may imply that the company is taking longer to pay its bills, possibly to take advantage of supplier credit terms.

The working capital turnover ratio, demonstrating how effectively the company utilizes its working capital, has fluctuated but generally increased from 5.67 to 6.77 times. A higher turnover indicates that the company is generating more revenue relative to its working capital, which is a positive sign of efficiency.

Overall, H B Fuller Company's activity ratios highlight its ability to manage its inventory, collect receivables, payables, and use working capital efficiently over the analyzed period.

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Average number of days

H B Fuller Company's activity ratios, namely Days of Inventory on Hand (DOH), Days of Sales Outstanding (DSO), and Number of Days of Payables, provide insights into the efficiency of the company's operations in managing inventory, collecting receivables, and paying its liabilities.

1. Days of Inventory on Hand (DOH):
- The DOH for H B Fuller Company has shown a slight increase over the years, from 58.01 days in November 2020 to 68.07 days in November 2024. This indicates that the company is holding inventory for a longer period before selling it, which may tie up capital and increase carrying costs.

2. Days of Sales Outstanding (DSO):
- The DSO for H B Fuller Company has demonstrated improvement over the years, decreasing from 67.36 days in November 2020 to 57.10 days in November 2024. A decreasing trend in DSO suggests that the company is collecting receivables more efficiently, leading to faster conversion of sales into cash.

3. Number of Days of Payables:
- The number of days of payables for H B Fuller Company has fluctuated over the years, ranging from 56.80 days in November 2020 to 71.55 days in November 2024. An increase in the number of days of payables may indicate that the company is taking longer to settle its obligations to suppliers, potentially signaling cash flow management strategies.

In summary, while H B Fuller Company has seen improvements in its Days of Sales Outstanding, it may need to address the slight increase in Days of Inventory on Hand and the fluctuating trend in the Number of Days of Payables to enhance the overall efficiency of its operations.

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Long-term

The fixed asset turnover ratio measures how efficiently a company is utilizing its fixed assets to generate sales. H B Fuller Company's fixed asset turnover has shown a general increasing trend over the years, from 4.16 in November 28, 2020, to 4.71 in November 27, 2021, reaching a peak of 5.11 in December 3, 2022, before declining to 4.26 in December 2, 2023, and further dropping to 4.05 in November 30, 2024. This indicates that the company improved its efficiency in utilizing fixed assets to generate sales, reaching a peak in 2022 but experienced a slight decline in recent years.

On the other hand, the total asset turnover ratio reflects how effectively a company is using its total assets to generate revenue. H B Fuller Company's total asset turnover ratio has also demonstrated a fluctuating pattern over the years, starting at 0.69 in November 28, 2020, increasing to 0.77 in November 27, 2021, peaking at 0.84 in December 3, 2022, before declining to 0.74 in December 2, 2023, and slightly decreasing further to 0.72 in November 30, 2024. This suggests that the company has been relatively consistent in generating sales from its total assets, with some fluctuations in efficiency observed throughout the period.

Overall, these ratios indicate fluctuations in H B Fuller Company's efficiency in generating sales from both fixed and total assets over the years, with some improvements and declines observed. It is essential for the company to monitor these ratios to ensure optimal asset utilization and sustainable growth in the long term.