Hershey Co (HSY)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Inventory turnover | 4.71 | 4.60 | 5.05 | 4.98 | 4.61 |
| Receivables turnover | — | — | — | — | — |
| Payables turnover | — | — | — | — | — |
| Working capital turnover | — | — | — | — | 7.50 |
1. Inventory Turnover:
- The inventory turnover ratio measures how efficiently a company manages its inventory. Hershey Co's inventory turnover has shown a generally upward trend over the past five years, from 4.61 in 2020 to 4.71 in 2024. This indicates that Hershey has been able to sell its inventory more frequently in recent years, which is positive for the company's cash flow and working capital management.
2. Receivables Turnover:
- Receivables turnover ratio helps assess how efficiently a company collects its outstanding receivables. Unfortunately, the data provided shows that Hershey did not have receivables turnover data available for the years 2020 to 2024. Without this information, it is challenging to evaluate the effectiveness of Hershey's receivables management.
3. Payables Turnover:
- Payables turnover ratio measures how efficiently a company pays its suppliers. Similar to receivables turnover, the data provided does not include payables turnover information for Hershey Co for the years 2020 to 2024. This makes it difficult to analyze Hershey's payment practices and relationship with suppliers.
4. Working Capital Turnover:
- The working capital turnover ratio reflects how effectively a company utilizes its working capital to generate sales. In this case, Hershey Co had a working capital turnover of 7.50 in 2020, indicating that for every dollar of working capital, the company generated $7.50 in sales. However, there is no data available for the subsequent years, making it challenging to track changes in the company's working capital efficiency over time.
In conclusion, while Hershey Co's inventory turnover has shown improvement, the lack of data for receivables turnover, payables turnover, and subsequent years' working capital turnover hinders a comprehensive assessment of the company's overall activity ratios. Going forward, it would be beneficial for investors and analysts to have access to complete and up-to-date financial information to better evaluate Hershey's operational efficiency and financial performance.
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 | 77.57 | 79.37 | 72.32 | 73.29 | 79.11 |
| Days of sales outstanding (DSO) | days | — | — | — | — | — |
| Number of days of payables | days | — | — | — | — | — |
Based on the provided data for Hershey Co, we can analyze the activity ratios as follows:
1. Days of Inventory on Hand (DOH):
- The days of inventory on hand measure how many days, on average, a company holds its inventory before selling it.
- Hershey Co's DOH has shown a decreasing trend from 79.11 days in 2020 to 77.57 days in 2024.
- A decreasing trend in DOH indicates that Hershey Co has been more efficient in managing its inventory levels, which may lead to lower carrying costs and potentially improved cash flows.
2. Days of Sales Outstanding (DSO):
- The days of sales outstanding ratio indicates how long it takes for a company to collect its accounts receivable.
- The data provided does not include information on DSO for Hershey Co, which could indicate either that the company has very efficient accounts receivable management practices or that this aspect was not specifically measured.
3. Number of Days of Payables:
- The number of days of payables ratio measures how long a company takes to pay its suppliers.
- The data provided does not include information on the number of days of payables for Hershey Co, which could imply that the company's payment terms with suppliers were not specifically analyzed or that the information was not available for the period in question.
Overall, the decreasing trend in Days of Inventory on Hand for Hershey Co indicates improved inventory management efficiency, which can positively impact the company's financial performance and working capital management. Additional information on Days of Sales Outstanding and Number of Days of Payables would provide a more comprehensive analysis of Hershey Co's overall activity ratios.
See also:
Long-term
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Fixed asset turnover | — | — | 3.76 | 3.47 | 3.57 |
| Total asset turnover | 0.87 | 0.94 | 0.95 | 0.86 | 0.89 |
The fixed asset turnover ratio measures how efficiently a company is utilizing its fixed assets to generate sales. Hershey Co's fixed asset turnover has shown a slight decline from 3.57 in 2020 to 3.47 in 2021, followed by an increase to 3.76 in 2022. However, there is missing data for 2023 and 2024.
On the other hand, the total asset turnover ratio indicates how effectively a company is using all its assets to generate revenue. Hershey Co's total asset turnover has fluctuated over the years, with a decrease from 0.89 in 2020 to 0.86 in 2021, followed by increases to 0.95 in 2022 and then a slight dip to 0.94 in 2023, before dropping to 0.87 in 2024.
Overall, Hershey Co's fixed asset turnover has shown some variability, while the total asset turnover has also fluctuated, reflecting changes in how efficiently the company is utilizing its assets to generate revenue. Further analysis would be needed to understand the reasons behind these fluctuations and to assess the company's long-term asset management efficiency.