Graco Inc (GGG)

Short-term

Turnover ratios

Graco Inc's inventory turnover has been gradually declining over the years from 2.78 in 2020 to 2.45 in 2024. This indicates that the company is selling its inventory at a slower rate. However, the turnover ratio is still relatively stable, suggesting that Graco Inc manages its inventory efficiently.

The receivables turnover ratio is not available for the years provided, meaning there is no data to analyze the effectiveness of the company in collecting its accounts receivable.

Similarly, the payables turnover ratio is not provided, making it difficult to assess how efficiently Graco Inc is managing its accounts payable.

On the other hand, the working capital turnover ratio has shown fluctuations over the years, ranging from 1.94 in 2024 to 2.66 in 2022. A higher ratio indicates that the company is generating more revenue per unit of working capital invested. The decreasing trend in this ratio could imply that Graco Inc is becoming less efficient in utilizing its working capital to generate sales.

Overall, while the company's inventory turnover remains stable, the lack of data for receivables and payables turnover ratios limits a comprehensive analysis of Graco Inc's activity ratios. The fluctuation in the working capital turnover ratio requires further investigation into the company's working capital management practices.

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Average number of days

The Days of Inventory on Hand (DOH) for Graco Inc increased from 131.14 days as of December 31, 2020, to 149.07 days as of December 31, 2024. This trend indicates that the company is holding onto inventory for a longer period, which may tie up valuable resources and impact cash flow efficiency.

The Days of Sales Outstanding (DSO) and Number of Days of Payables data are not available for analysis. However, typically, lower DSO suggests that the company is collecting its accounts receivable more efficiently, while a longer period of payables indicates a favorable payment term, potentially benefiting cash flow.

In summary, the increase in Days of Inventory on Hand for Graco Inc warrants further investigation into the company's inventory management practices to ensure optimal utilization of resources and improved operational efficiency.

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Long-term

The fixed asset turnover ratio measures how efficiently a company utilizes its fixed assets to generate sales. In the case of Graco Inc, the trend in the fixed asset turnover ratio has been declining from 4.70 in December 31, 2020, to 3.36 in December 31, 2022. This decline suggests that Graco Inc is becoming less efficient in generating sales from its fixed assets over the years. However, it's worth noting that the data for December 31, 2023, and December 31, 2024, are not available to provide a complete trend analysis.

Total asset turnover ratio, on the other hand, indicates how well a company utilizes its total assets to generate revenue. Graco Inc's total asset turnover ratio fluctuated from 0.83 in December 31, 2020, to 0.67 in December 31, 2024, with a peak value of 0.88 in December 31, 2022. The decrease in the total asset turnover ratio indicates a reduction in the company's ability to generate sales relative to its total assets during the period under review.

Overall, the decreasing trend in both fixed asset turnover and total asset turnover ratios suggests potential inefficiencies in Graco Inc's utilization of assets to drive sales in the long term. It would be prudent for the company to closely monitor and address these trends to improve operational efficiency and profitability.