HNI Corp (HNI)

Short-term

Turnover ratios

HNI Corp's activity ratios provide insights into the efficiency of the company's management of inventory, receivables, payables, and working capital.

1. Inventory Turnover:
HNI Corp's inventory turnover has fluctuated over the past five years, ranging from 11.59 to 13.78. This ratio indicates how many times the company's inventory is sold and replaced during the year. A higher ratio implies that the company is managing its inventory efficiently by quickly selling products. HNI Corp's inventory turnover has generally been high, indicating effective inventory management.

2. Receivables Turnover:
The receivables turnover ratio measures how efficiently a company collects cash from its credit customers. HNI Corp's receivables turnover has ranged from 8.15 to 10.81 over the past five years. A higher ratio suggests that the company is collecting cash more quickly from credit sales. HNI Corp's receivables turnover has been relatively stable, indicating effective credit management practices.

3. Payables Turnover:
The payables turnover ratio reflects how quickly a company pays its suppliers. HNI Corp's payables turnover ratio has varied between 9.01 and 13.69. A higher ratio suggests that the company is taking longer to pay its suppliers, which can be beneficial for managing cash flow. HNI Corp's payables turnover has shown some fluctuation, possibly indicating changes in payment terms with suppliers.

4. Working Capital Turnover:
The working capital turnover ratio indicates how efficiently a company is utilizing its working capital to generate sales. HNI Corp's working capital turnover has shown significant fluctuations, ranging from 31.87 to 127.74. A higher ratio implies that the company is generating more sales per dollar of working capital invested. HNI Corp's working capital turnover has varied widely, suggesting changes in the company's sales efficiency over the years.

Overall, HNI Corp's activity ratios demonstrate the company's effectiveness in managing its inventory, receivables, payables, and working capital to support its operational activities and generate sales.

---

Average number of days

Activity ratios provide insights into how efficiently a company is managing its assets and liabilities related to sales and production. Let's analyze the activity ratios of HNI Corp based on the data provided:

1. Days of Inventory on Hand (DOH):
- In 2023, HNI Corp had 30.51 days of inventory on hand, indicating that it takes approximately 30.51 days for the company to sell its inventory.
- The trend over the past five years shows fluctuations in inventory management efficiency. It peaked in 2021 at 31.48 days before decreasing in 2022 and increasing slightly in 2023.

2. Days of Sales Outstanding (DSO):
- HNI Corp had 37.05 days of sales outstanding in 2023, meaning it takes about 37.05 days to collect its accounts receivable from customers.
- The trend shows variability in collecting payments from customers, with the DSO increasing in 2021 and then decreasing in 2023.

3. Number of Days of Payables:
- HNI Corp had 30.06 days of payables in 2023, indicating that it takes around 30.06 days to pay its suppliers for goods or services.
- The trend in payables management shows fluctuations, with the number of days of payables varying year to year.

Overall, analyzing the activity ratios provides insights into the efficiency of HNI Corp's inventory management, accounts receivable collection, and payables payment processes. Monitoring these ratios over time can help assess the company's operational performance and effectiveness in managing working capital.

---

Long-term

HNI Corp's fixed asset turnover ratio has exhibited fluctuations over the past five years, ranging from 4.38 in 2023 to 6.70 in 2022. This ratio indicates the efficiency with which the company generates sales from its investment in fixed assets. A higher fixed asset turnover ratio is generally preferred as it implies that the company is effectively utilizing its fixed assets to generate revenue. HNI Corp's declining trend in fixed asset turnover from 2022 to 2023 could suggest potential inefficiencies in utilizing its fixed assets during that period.

On the other hand, HNI Corp's total asset turnover ratio has shown a similar pattern of variance, with values ranging from 1.26 in 2023 to 1.67 in 2022. The total asset turnover ratio indicates how well the company is utilizing all its assets to generate sales. A higher total asset turnover ratio is indicative of better asset utilization efficiency. HNI Corp's declining trend in total asset turnover from 2022 to 2023 could imply potential challenges in effectively leveraging its total assets to drive sales.

In summary, HNI Corp's fixed asset turnover and total asset turnover ratios have displayed fluctuations over the past five years, signaling potential shifts in the company's efficiency in generating sales from its fixed and total assets. Further analysis and comparison with industry benchmarks may provide additional insights into the company's long-term activity performance.