The Hain Celestial Group Inc (HAIN)

Short-term

Turnover ratios

The activity ratios of The Hain Celestial Group Inc provide insights into the efficiency of the company's operations in managing its inventory, receivables, payables, and working capital.

1. Inventory turnover:
- The inventory turnover ratio measures how efficiently the company is managing its inventory levels. A higher ratio indicates that the company is selling its inventory more quickly. The trend shows a fluctuation in inventory turnover, with a slight decrease in recent years (6.66 in 2024 compared to 7.86 in 2020). This may suggest potential inventory management issues or changes in the company's sales patterns.

2. Receivables turnover:
- The receivables turnover ratio reflects how quickly the company collects payments from its customers. A higher ratio indicates faster collections. The trend in Hain Celestial's receivables turnover has shown a gradual decline over the years (9.37 in 2024 compared to 12.01 in 2020), suggesting a potential slowdown in collections efficiency or changes in credit policies.

3. Payables turnover:
- The payables turnover ratio measures how efficiently the company is paying its suppliers. A higher ratio implies that the company is paying off its suppliers more quickly. The payables turnover ratio for Hain Celestial fluctuates over the years, with a significant decrease in 2023 (14.17) followed by a rebound in 2024 (9.70). This variability may indicate changes in payment terms or supplier relationships.

4. Working capital turnover:
- The working capital turnover ratio evaluates how efficiently the company is utilizing its working capital to generate sales. A higher ratio suggests that the company is effectively utilizing its resources. The trend for Hain Celestial's working capital turnover has been fluctuating but relatively stable over the years, with a slight decrease in 2024 (6.09) compared to 2019 (7.88).

In conclusion, the analysis of Hain Celestial's activity ratios indicates areas where the company may need to improve operational efficiency, such as inventory management and collections processes. Further investigation into the underlying reasons for these trends could provide valuable insights for the company's management and stakeholders.

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Average number of days

The activity ratios for The Hain Celestial Group Inc over the past five years reflect its efficiency in managing inventory, collecting receivables, and paying suppliers.

1. Days of Inventory on Hand (DOH):
- The trend for DOH shows a fluctuating pattern over the past five years, ranging from 46.43 days in 2020 to 63.27 days in 2022. In 2024, the company held inventory for an average of 54.82 days.
- A decrease in DOH indicates the company is selling inventory more quickly, which could be due to improved inventory management practices or increased demand for its products.
- However, the increase in 2022 compared to 2021 suggests a potential buildup of inventory, which may lead to higher carrying costs and the risk of obsolescence.

2. Days of Sales Outstanding (DSO):
- The DSO indicates the average number of days it takes the company to collect its accounts receivable. The trend has been relatively stable, with a slight increase in 2024 to 38.97 days.
- A lower DSO is preferable as it signifies faster collection of cash and efficient credit management. The company should monitor this ratio to ensure timely collection of receivables to maintain healthy cash flows.

3. Number of Days of Payables:
- The trend for the number of days of payables has been fluctuating over the period, with the highest being 37.64 days in 2024 and the lowest at 25.77 days in 2023.
- An increase in days of payables may indicate that the company is taking longer to settle its payables, which can be beneficial in managing cash flow. However, it could also signal strained relationships with suppliers if payment terms are stretched too far.
- The company should aim to strike a balance between optimizing cash flow by delaying payments and maintaining good relationships with suppliers to avoid any negative impacts on the supply chain.

In conclusion, The Hain Celestial Group Inc should focus on optimizing its inventory management practices, closely monitor accounts receivable collection, and maintain a balanced approach to managing payables to enhance its overall efficiency and financial performance.

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Long-term

The long-term activity ratios of The Hain Celestial Group Inc, as indicated by the fixed asset turnover and total asset turnover ratios, have shown some fluctuations over the past five years.

The fixed asset turnover ratio measures the efficiency of the company in generating sales revenue from its investment in fixed assets. The trend of this ratio for The Hain Celestial Group Inc has been relatively stable, ranging from a high of 7.10 in 2020 to a low of 5.93 in 2023. The current fixed asset turnover ratio of 6.42 for June 30, 2024, suggests that the company is effectively utilizing its fixed assets to generate sales.

On the other hand, the total asset turnover ratio reflects the company's ability to generate sales revenue from its total assets. The trend for this ratio has been fluctuating, starting from 0.94 in 2020, dropping to 0.77 in 2022, and then slightly increasing to 0.79 in 2024. This indicates that the company's efficiency in utilizing its total assets to generate sales has varied over the years.

Overall, the fixed asset turnover ratio indicates that The Hain Celestial Group Inc has consistently used its fixed assets efficiently to generate sales. However, the total asset turnover ratio suggests that the company's ability to generate sales revenue from its total assets has shown some inconsistency over the past five years. Further analysis would be needed to understand the factors driving these fluctuations and how they may impact the company's long-term performance.