HNI Corp (HNI)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Inventory turnover | 11.99 | 11.96 | 12.57 | 11.59 | 13.78 |
| Receivables turnover | — | 9.85 | 10.81 | 9.10 | 9.37 |
| Payables turnover | 12.24 | 12.14 | 13.69 | 9.01 | 9.97 |
| Working capital turnover | 53.75 | 33.71 | 31.87 | 127.74 | 34.36 |
By analyzing the activity ratios of HNI Corp over the years, we can gain insights into the efficiency of the company's operations:
1. Inventory Turnover: This ratio indicates the number of times inventory is sold and replaced over a period. We observe a slight decline in inventory turnover from 2020 to 2022, but then a stabilization in later years. This suggests that the company might be managing its inventory levels efficiently.
2. Receivables Turnover: It measures how quickly the company collects cash from its credit sales. There was a fluctuation in receivables turnover over the years, with an increase in 2022 followed by a missing value in 2024. This could indicate changes in the company's credit policies or customer payment behavior.
3. Payables Turnover: This ratio shows how quickly a company pays its suppliers. HNI Corp demonstrated a significant increase in payables turnover from 2020 to 2022, which may imply improved payment practices or negotiation with suppliers.
4. Working Capital Turnover: It reflects the efficiency of utilizing working capital to generate sales. The company's working capital turnover saw a substantial increase in 2021, indicating a more efficient use of working capital to support business activities.
Overall, while there were fluctuations in some activity ratios, HNI Corp seems to be effectively managing its inventory, receivables, payables, and working capital to support its operations and generate sales. It is essential for the company to continue monitoring and optimizing these ratios to ensure operational efficiency and financial health.
Average number of days
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 30.43 | 30.51 | 29.04 | 31.48 | 26.49 |
| Days of sales outstanding (DSO) | days | — | 37.05 | 33.75 | 40.10 | 38.96 |
| Number of days of payables | days | 29.82 | 30.06 | 26.66 | 40.53 | 36.62 |
HNI Corp's activity ratios provide insights into how efficiently the company manages its inventory, collects receivables, and pays its suppliers.
1. Days of Inventory on Hand (DOH):
- The DOH measures how many days, on average, HNI Corp holds onto its inventory before selling it.
- The trend shows an increase in inventory holding period from 26.49 days in 2020 to 30.43 days in 2024. This suggests that the company may be carrying more inventory or facing challenges in selling products quickly.
2. Days of Sales Outstanding (DSO):
- The DSO ratio indicates the average number of days it takes for HNI Corp to collect its accounts receivable.
- The DSO fluctuated over the years, with the highest being 40.10 days in 2021 and the lowest being "— days" in 2024. A lower DSO indicates that the company is collecting receivables more efficiently.
3. Number of Days of Payables:
- This ratio represents how long HNI Corp takes to pay its suppliers.
- The number of days of payables decreased from 36.62 days in 2020 to 29.82 days in 2024. A lower number of days of payables suggests that the company is paying its suppliers more promptly.
Overall, analyzing these activity ratios can help assess HNI Corp's operational efficiency, inventory management, accounts receivable collection, and supplier payment practices. The company may need to focus on optimizing inventory levels, improving accounts receivable collection, and maintaining healthy supplier relationships to enhance overall performance in the future.
Long-term
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Fixed asset turnover | 4.77 | 4.38 | 6.70 | 5.96 | 5.32 |
| Total asset turnover | 1.35 | 1.26 | 1.67 | 1.46 | 1.37 |
HNI Corp's fixed asset turnover ratio has shown an increasing trend from 5.32 in 2020 to 6.70 in 2022, indicating the company's ability to generate sales in relation to its investment in fixed assets has improved over the years. However, there was a noticeable decline in 2023 to 4.38, followed by a slight recovery to 4.77 in 2024.
In contrast, the total asset turnover ratio, which measures the company's efficiency in generating sales from its total assets, has also shown a similar pattern. The ratio increased from 1.37 in 2020 to 1.67 in 2022, reflecting an improvement in the company's overall asset utilization. However, there was a significant drop to 1.26 in 2023, although it showed a slight recovery to 1.35 in 2024.
Overall, the fixed asset turnover and total asset turnover ratios of HNI Corp suggest that the company has been effectively utilizing its assets to generate sales, with some fluctuations in performance observed in recent years.