Hayward Holdings Inc (HAYW)

Short-term

Turnover ratios

Inventory turnover measures how efficiently a company is managing its inventory. Hayward Holdings Inc's inventory turnover has been relatively stable over the past eight quarters, ranging between 2.22 and 2.58. This indicates that, on average, the company is turning over its inventory approximately 2.40 times per year. A higher turnover ratio is generally preferred, as it suggests that inventory is being sold quickly, reducing the risk of obsolescence.

Receivables turnover reflects how effectively a company is collecting on credit sales. Hayward Holdings Inc's receivables turnover has varied significantly, from 3.31 to 12.97 over the same period. This fluctuation may indicate changes in the company's credit policies, customer payment behavior, or the overall economic environment. A higher turnover ratio is typically desirable, as it implies quicker collection of outstanding receivables.

Payables turnover measures how efficiently a company is managing its accounts payable. Hayward Holdings Inc's payables turnover has ranged from 7.48 to 13.27, showing varying payment patterns to suppliers. A lower turnover ratio may suggest that the company is taking longer to pay its suppliers, potentially indicating liquidity issues or favorable payment terms negotiated with vendors.

Working capital turnover assesses how effectively a company is generating revenue relative to its working capital. Hayward Holdings Inc's working capital turnover has decreased over the past eight quarters, indicating a declining ability to efficiently generate revenue in relation to its working capital. A higher turnover ratio is generally preferable, as it suggests that the company is effectively utilizing its resources to generate sales.

In summary, Hayward Holdings Inc's activity ratios reflect fluctuations in inventory management, receivables collection, payables management, and working capital efficiency over the analyzed period. Understanding these ratios can help assess the company's operational effectiveness and financial performance.

---

Average number of days

Hayward Holdings Inc's activity ratios provide insight into how efficiently the company manages its inventory, accounts receivable, and accounts payable.

1. Days of Inventory on Hand (DOH): The trend in DOH indicates how many days, on average, the company holds onto its inventory before selling it. A higher number of days suggests slower turnover and possible overstocking, tying up capital. Hayward Holdings' DOH has been relatively stable over the quarters, ranging between 120.22 to 164.55 days, with a peak in Q1 2023.

2. Days of Sales Outstanding (DSO): DSO measures the average number of days it takes for the company to collect payment from its customers after a sale. Lower DSO values are generally preferred, indicating a faster cash conversion cycle. Hayward Holdings' DSO has fluctuated significantly, ranging from 28.15 to 110.15 days. Notably, there was a sharp increase in Q4 2023 compared to the previous quarter, suggesting a possible delay in collecting receivables.

3. Number of Days of Payables: This ratio reflects how long the company takes to pay its suppliers. Longer payment periods can indicate favorable terms and improved cash flow, but could also strain supplier relationships. Hayward Holdings' trend in days of payables has been relatively stable, varying between 27.50 to 48.81 days. Q4 2023 saw an increase in the number of days of payables compared to the previous quarter, signaling potentially stretched payment terms.

In summary, Hayward Holdings Inc should closely monitor its activity ratios to ensure optimal management of inventory, receivables, and payables. The company may need to assess its inventory levels, collection processes, and payment terms to improve efficiency and cash flow management.

---

Long-term

Hayward Holdings Inc's long-term activity ratios, specifically the fixed asset turnover and total asset turnover, provide insights into how efficiently the company is utilizing its assets to generate sales.

The fixed asset turnover ratio measures how effectively the company is utilizing its fixed assets to generate revenue. From Q1 2022 to Q4 2023, the fixed asset turnover ratio has shown a declining trend, dropping from 10.25 to 6.24. This indicates that Hayward Holdings Inc is generating less revenue for each dollar invested in fixed assets over the period under review. The decreasing trend could imply that the company's fixed assets are not being utilized as efficiently as before or that sales have declined in relation to fixed assets.

On the other hand, the total asset turnover ratio reflects how efficiently the company is utilizing all its assets to generate revenue. Hayward Holdings Inc's total asset turnover ratio has also experienced a downward trend from 0.51 in Q2 2022 to 0.34 in Q4 2023. Similar to the fixed asset turnover ratio, this decline suggests that the company is generating less revenue for each dollar of total assets. It could indicate that either sales have decreased compared to total assets or that the company's asset base has grown faster than its revenue generation.

Overall, both the fixed asset turnover and total asset turnover ratios for Hayward Holdings Inc have displayed a declining pattern over the period, indicating potential inefficiencies in asset utilization and revenue generation. Further analysis and investigation into the company's operations and strategies may be necessary to address these trends and improve long-term activity efficiency.