Hawkins Inc (HWKN)

Short-term

Turnover ratios

The activity ratios of Hawkins Inc, encompassing inventory turnover, receivables turnover, payables turnover, and working capital turnover, provide insights into the efficiency of the company's operations and management of its working capital.

1. Inventory Turnover:
- The inventory turnover ratio has shown an increasing trend over the past five years, indicating that Hawkins Inc is selling its inventory more frequently. This suggests efficient inventory management and a reduced risk of inventory obsolescence.

2. Receivables Turnover:
- The receivables turnover ratio has also demonstrated a generally increasing trend, reflecting the company's ability to collect its accounts receivable more rapidly. This implies effective credit policies and proactive collection efforts.

3. Payables Turnover:
- The payables turnover ratio has fluctuated slightly but remains relatively stable over the years. A higher turnover ratio indicates that Hawkins Inc is paying its suppliers more quickly, potentially benefiting from discounts and maintaining good relationships with suppliers.

4. Working Capital Turnover:
- The working capital turnover ratio has exhibited variability but has generally improved over the years. This signifies that Hawkins Inc is generating more revenue per unit of working capital invested, showcasing efficient utilization of resources and capital management.

Overall, the trend analysis of Hawkins Inc's activity ratios suggests that the company has been increasingly efficient in managing its inventory, receivables, payables, and working capital, which is a positive indicator of its operational effectiveness and financial health.

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Average number of days

Activity ratios, such as the days of inventory on hand (DOH), days of sales outstanding (DSO), and number of days of payables, provide insights into how efficiently a company manages its inventories, collects its receivables, and pays its suppliers.

For Hawkins Inc, the trend in Days of Inventory on Hand (DOH) shows a fluctuating pattern over the last five years, with a decrease from 55.20 days in 2022 to 37.53 days in 2024. This indicates that the company has been managing its inventory more efficiently in recent years, possibly by reducing excess inventory levels and improving inventory turnover.

In terms of Days of Sales Outstanding (DSO), Hawkins Inc has also shown improvement in receivables management, with the DSO decreasing from 57.88 days in 2022 to 45.46 days in 2024. This suggests that the company is collecting its receivables more quickly, which could lead to improved cash flow and reduced credit risk.

The Number of Days of Payables for Hawkins Inc has varied over the years, but it has generally remained stable, with a slight increase from 25.46 days in 2023 to 28.37 days in 2024. This indicates that the company has been maintaining consistent payment terms with suppliers, which could help in managing working capital effectively.

Overall, the trends in activity ratios for Hawkins Inc suggest a positive shift towards better inventory management, receivables collection, and payables handling, which can contribute to improved liquidity and operational efficiency.

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Long-term

Hawkins Inc's long-term activity ratios indicate the efficiency with which the company utilizes its fixed and total assets to generate sales revenue. The fixed asset turnover ratio has shown a declining trend over the past five years, decreasing from 5.03 in 2023 to 4.40 in 2024. This indicates that the company is generating fewer sales relative to its investment in fixed assets. However, the current ratio of 4.40 still suggests that Hawkins Inc is relatively efficient in utilizing its fixed assets to generate sales compared to the base year of 2020.

In contrast, the total asset turnover ratio has shown fluctuations over the same period, with a peak of 1.58 in 2023, followed by a decline to 1.40 in 2024. This suggests that the company's efficiency in generating sales relative to its total assets has varied over the years. Despite the fluctuations, the total asset turnover ratio in 2024 is still higher than the base year of 2020, indicating that Hawkins Inc is utilizing its total assets more effectively to generate revenue.

Overall, while the fixed asset turnover ratio has shown a declining trend, the total asset turnover ratio has exhibited fluctuations, with both ratios indicating varying levels of efficiency in the utilization of assets to generate sales revenue. Continued monitoring of these ratios will be essential to assess Hawkins Inc's long-term asset management efficiency and identify any areas for improvement.