Six Flags Entertainment Corporation (FUN)

Short-term

Turnover ratios

The inventory turnover of Six Flags Entertainment Corporation has shown significant fluctuations over the reported periods. The ratio started relatively high at 16.91 on March 31, 2020, decreased sharply to 0.50 by March 31, 2021, and then gradually increased to 15.84 by December 31, 2024. This indicates varying efficiencies in managing and selling inventory throughout the years.

The receivables turnover information is absent for most of the periods, making it challenging to assess the company's effectiveness in collecting outstanding receivables. However, data available as of June 30, 2024, and December 31, 2024, suggest an improvement in collecting receivables over time.

Similarly, payables turnover data is mostly missing, with figures available only for June 30, 2024, September 30, 2024, and December 31, 2024. The payables turnover ratios show a positive trend over these periods, indicating better management of payment obligations.

The working capital turnover ratios, although incomplete due to missing data in various reporting periods, show fluctuations in the efficiency of generating revenue from working capital. Notably, the ratio peaked at 9.38 on September 30, 2020, before dropping to 0.71 by December 31, 2020, and gradually recovering to 4.40 by June 30, 2021.

In conclusion, analyzing the activity ratios of Six Flags Entertainment Corporation reveals mixed trends in inventory turnover, improvements in receivables and payables turnover, and fluctuations in working capital turnover. The company's efficiency in managing these key aspects of its operations may require further scrutiny to ensure sustainable growth and profitability.

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Average number of days

Based on the provided data, let's analyze the activity ratios for Six Flags Entertainment Corporation:

1. Days of Inventory on Hand (DOH):
- The trend in DOH indicates the number of days it takes for Six Flags to sell its inventory.
- Initially, DOH was high, indicating slower inventory turnover (619.12 days in December 2020).
- However, there was a significant improvement in inventory management as DOH decreased to 23.05 days by December 2024.
- This improvement suggests better operational efficiency and inventory control.

2. Days of Sales Outstanding (DSO):
- DSO represents the average number of days it takes for Six Flags to collect its accounts receivable.
- No data is available for DSO until June 2024, which was at 22.17 days.
- Lower DSO indicates a faster collection of receivables, improving cash flow and liquidity.
- Further analysis beyond June 2024 is needed to track the trend and evaluate the efficiency of the company's credit policies.

3. Number of Days of Payables:
- This ratio depicts the average number of days it takes for Six Flags to pay its suppliers.
- No data is available until June 2024, where the number of days of payables was 44.69 days.
- A decrease in days of payables could indicate a better cash management strategy but may also strain relationships with suppliers.
- By December 2024, this ratio decreased to 34.70 days, suggesting improved payment terms with suppliers.

In summary, Six Flags Entertainment Corporation has shown positive trends in managing its inventory and payables, leading to better operational efficiency. Further monitoring of DSO post-June 2024 is necessary to assess the company's collection practices and cash flow management.

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Long-term

The fixed asset turnover ratio measures the efficiency of Six Flags Entertainment Corporation in generating revenue from its fixed assets. Over the analyzed period, the company's fixed asset turnover ratio fluctuated, reflecting changes in how effectively it utilized its fixed assets.

For example, the fixed asset turnover ratio declined significantly from March 2020 to September 2020, indicating a decrease in revenue generated per dollar of fixed assets. This may suggest underutilization or impairment of fixed assets during this period.

From September 2021 to December 2022, the fixed asset turnover ratio increased steadily, reaching its peak at 1.15 by September 2022. This improvement signifies enhanced efficiency in utilizing fixed assets to generate revenue.

However, the ratio tapered off to 0.48 by September 2024, indicating a potential decline in the efficiency of fixed asset utilization during that period. Overall, fluctuations in the fixed asset turnover ratio suggest variations in the company's ability to generate revenue from its fixed assets efficiently.

Moreover, the total asset turnover ratio, which measures Six Flags' ability to generate revenue from all its assets, showed a similar trend of fluctuation during the analysis period. The ratio ranged from a low of 0.05 in March 2021 to a high of 0.82 in March 2023.

Despite some fluctuations, the total asset turnover ratio generally improved over time, indicating Six Flags' enhanced ability to generate revenue from its total asset base. However, the ratio declined towards the end of the analyzed period, reaching 0.30 by December 2024.

The overall analysis of both fixed asset turnover and total asset turnover ratios implies that Six Flags Entertainment Corporation experienced varying levels of efficiency in utilizing its assets to generate revenue during the analyzed period.