Grocery Outlet Holding Corp (GO)

Short-term

Turnover ratios

Inventory turnover ratio measures how efficiently a company manages its inventory by calculating how many times the inventory is sold and replaced within a specific period. For Grocery Outlet Holding Corp, the inventory turnover ratio has been fluctuating over the years, ranging from a high of 9.96 in March 2020 to a low of 7.13 in June 2022. Generally, a higher inventory turnover ratio indicates efficient inventory management.

Receivables turnover ratio evaluates how quickly a company collects its accounts receivable. Unfortunately, data for Grocery Outlet Holding Corp's receivables turnover ratio is not available, possibly indicating that the company operates on a cash basis or has negligible accounts receivable.

Payables turnover ratio measures how well a company pays its suppliers. Similarly, data for Grocery Outlet Holding Corp's payables turnover ratio is not provided, which could suggest that the company pays its suppliers promptly or does not rely heavily on trade credit.

Working capital turnover ratio assesses how effectively a company utilizes its working capital to generate sales. Grocery Outlet Holding Corp's working capital turnover ratio has shown variability, with values ranging from a low of 14.43 in March 2022 to a high of 41.94 in March 2024. A higher working capital turnover ratio implies that the company efficiently generates sales using its working capital.

In summary, the analysis of activity ratios for Grocery Outlet Holding Corp indicates fluctuations in inventory turnover and working capital turnover ratios over the years, emphasizing the importance of monitoring these ratios to assess the company's operational efficiency and financial performance.

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Average number of days

Based on the provided data for Grocery Outlet Holding Corp, let's analyze the activity ratios:

1. Days of Inventory on Hand (DOH):
- The days of inventory on hand have shown fluctuations over the quarters, ranging from a low of 36.63 days (March 31, 2020) to a high of 51.17 days (June 30, 2022).
- The average DOH over the period is approximately 45.46 days.
- A lower DOH indicates faster inventory turnover and more efficient management of inventory, while a higher DOH may suggest slower inventory turnover or potential issues with managing stock levels.

2. Days of Sales Outstanding (DSO):
- The data provided does not include information on days of sales outstanding, indicating that detailed information for this ratio is not available.
- DSO is a measure of how long it takes for a company to collect revenue after a sale, and a lower DSO is generally preferred as it signifies quicker collection of 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.
- The number of days of payables reflects how long it takes for a company to pay its suppliers, and a longer period may indicate favorable credit terms with suppliers.

In conclusion, while we can observe the trend in the days of inventory on hand for Grocery Outlet Holding Corp, further information on days of sales outstanding and number of days of payables would provide a more comprehensive analysis of the company's working capital management and efficiency in converting inventory into sales and cash.

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Long-term

Long-term activity ratios provide insights into how effectively a company is utilizing its assets to generate sales over an extended period. Two key ratios used to assess long-term activity are fixed asset turnover and total asset turnover.

Fixed asset turnover ratio measures how efficiently a company is using its fixed assets to generate revenue. Grocery Outlet Holding Corp's fixed asset turnover ratio has shown variability over the reporting periods, ranging from 2.32 to 7.23. The notable fluctuation suggests changes in the company's efficiency in using its fixed assets to drive sales. The ratio experienced a significant spike in December 2020 before stabilizing around the 6 mark in subsequent periods.

Total asset turnover ratio indicates the company's overall efficiency in utilizing all its assets to generate revenue. Grocery Outlet Holding Corp's total asset turnover ratio has gradually increased from 1.15 in December 2021 to 1.38 in December 2024. This upward trend indicates an improvement in the company's ability to generate sales relative to its total asset base.

Analyzing both ratios together provides a comprehensive view of Grocery Outlet Holding Corp's performance in leveraging its assets to drive revenue over the long term. The company's efficiency in utilizing both fixed and total assets to generate sales can offer insights into its operational effectiveness and potential for future growth.