Jack In The Box Inc (JACK)

Short-term

Turnover ratios

Inventory turnover indicates how efficiently a company manages its inventory by showing how many times it sells and replaces its inventory during a specific period. Jack In The Box Inc has seen a significant increase in its inventory turnover ratio from 187.81 in 2019 to 224.08 in 2023, indicating that the company is managing its inventory more efficiently.

Receivables turnover ratio measures how well a company collects outstanding payments from its customers. Jack In The Box Inc has shown a steady improvement in this ratio over the years, with a current ratio of 16.98 in 2023, compared to 21.00 in 2019. This indicates that the company has been able to collect payments from its customers more effectively.

Payables turnover ratio reflects how well the company manages its payables by measuring how quickly it pays its suppliers. Jack In The Box Inc has maintained a stable payables turnover ratio over the years, ranging from 9.00 in 2019 to 13.02 in 2021. The current ratio of 10.28 in 2023 indicates that the company is managing its payments to suppliers efficiently.

Working capital turnover ratio shows how effectively a company utilizes its working capital to generate sales. Unfortunately, the data provided does not include this ratio for Jack In The Box Inc. However, based on the other activity ratios, we can infer that the company is likely using its working capital efficiently to generate sales.

In conclusion, Jack In The Box Inc has shown strong efficiency in managing its inventory, receivables, and payables over the years. The company's ability to improve or maintain these activity ratios reflects positively on its operational efficiency and financial management.

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Average number of days

To analyze Jack In The Box Inc's activity ratios, we will focus on Days of Inventory on Hand (DOH), Days of Sales Outstanding (DSO), and Number of Days of Payables.

1. Days of Inventory on Hand (DOH):
- The DOH measures how many days it takes for a company to sell its inventory. A lower DOH indicates that the company is efficiently managing its inventory turnover.
- Jack In The Box Inc's DOH has decreased over the past five years, from 2.64 days in 2022 to 1.63 days in 2023. This suggests that the company is improving its inventory management and selling its inventory at a faster rate.

2. Days of Sales Outstanding (DSO):
- DSO represents the average number of days it takes for a company to collect payment after a sale. A lower DSO is preferable as it signifies faster cash collection.
- Jack In The Box Inc's DSO has fluctuated over the years, with a peak of 28.02 days in 2020 and a low of 17.38 days in 2019. In 2023, the DSO stands at 21.50 days, indicating moderate efficiency in collecting payments from customers.

3. Number of Days of Payables:
- This ratio shows how long a company takes to pay its suppliers. A longer payment period may indicate better cash flow management but can also strain supplier relationships.
- Jack In The Box Inc's days of payables have varied, with a peak of 40.56 days in 2019 and a low of 28.03 days in 2021. In 2023, the company's number of days of payables is 35.52 days, suggesting a moderate payment period maintained by the company.

Overall, the trends in Jack In The Box Inc's activity ratios indicate improvements in inventory management and payment efficiency over the years. The company appears to be balancing its inventory turnover, cash collection, and payment periods to optimize its working capital management.

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Long-term

The fixed asset turnover ratio of Jack In The Box Inc has shown a consistent improvement over the past five years, indicating the company's ability to generate sales from its fixed assets efficiently. The ratio has increased from 2.42 in 2019 to 4.11 in 2023. This suggests that the company is utilizing its fixed assets more effectively to generate revenue.

On the other hand, the total asset turnover ratio has fluctuated over the same period, with a peak in 2021 at 0.65 and a low in 2020 at 0.54. The ratio has decreased to 0.56 in 2023. This suggests that the company's total asset efficiency in generating sales has been inconsistent.

Overall, the improvement in the fixed asset turnover ratio indicates that Jack In The Box Inc has been managing its fixed assets efficiently, while the fluctuation in the total asset turnover ratio suggests that the company's overall asset utilization in generating sales has not been as stable. Further analysis of the company's operational strategies and future prospects would be necessary to understand the factors driving these trends in long-term activity ratios.