Kelly Services A Inc (KELYA)

Short-term

Turnover ratios

The analysis of Kelly Services, Inc.'s activity ratios reveals the following insights:

1. Receivables Turnover:
- The receivables turnover ratio indicates how efficiently the company collects payments from customers.
- Kelly Services, Inc. has shown a fluctuating trend in receivables turnover over the past five years, ranging from 3.33 to 4.18.
- A higher receivables turnover ratio is generally favorable as it suggests a faster turnaround of accounts receivable, indicating effective credit and collection policies.
- The company's receivables turnover ratio improved in 2023 compared to the previous year, which may indicate more efficient management of receivables.

2. Working Capital Turnover:
- The working capital turnover ratio measures the efficiency of a company in generating revenue relative to its working capital.
- Kelly Services, Inc. has shown a declining trend in working capital turnover over the past five years, ranging from 7.24 to 10.27.
- A higher working capital turnover ratio indicates that the company is generating more revenue per dollar of working capital invested.
- The decrease in the working capital turnover ratio over the years may suggest a reduction in revenue generation efficiency relative to the company's working capital levels.

Overall, while Kelly Services, Inc. has exhibited fluctuations in its receivables turnover, indicating varying levels of efficiency in collecting payments, the declining trend in working capital turnover raises some concerns about the company's revenue generation efficiency in relation to its working capital. Further analysis of the company's operational and financial strategies may be required to address these trends and enhance overall performance.

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Average number of days

Based on the activity ratios provided for Kelly Services, Inc., we can analyze the efficiency of the company's operations:

1. Days of Inventory on Hand (DOH):
- Unfortunately, specific data for Days of Inventory on Hand is not available for the years provided. This ratio typically indicates how many days, on average, inventory is held before being sold. A lower DOH is generally favorable as it signifies faster turnover of inventory.

2. Days of Sales Outstanding (DSO):
- Over the past five years, Kelly Services, Inc. has shown some fluctuation in its Days of Sales Outstanding. The DSO represents the average number of days it takes for the company to collect revenue after making a sale. In 2023, the DSO decreased to 87.60 days from 109.65 days in 2022, indicating an improvement in collecting receivables efficiently. However, compared to 2019, the DSO has slightly increased.

3. Number of Days of Payables:
- Regrettably, specific data for the Number of Days of Payables is not provided for the years in question. This ratio would have offered insights into how long the company takes to pay its suppliers, impacting its working capital management.

In conclusion, while the information regarding Kelly Services, Inc.'s activity ratios is limited, the analysis of Days of Sales Outstanding suggests that the company has made progress in managing its receivables efficiently compared to the previous years.

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Long-term

Kelly Services, Inc. has shown a consistent improvement in its fixed asset turnover ratio over the past five years, with a significant increase from 124.26 in 2019 to 196.57 in 2023. This indicates that the company has been more efficient in generating revenue from its fixed assets over the years.

On the other hand, the total asset turnover ratio has fluctuated slightly with a decreasing trend from 2.16 in 2019 to 1.87 in 2023. Despite this decline, the company is still generating revenue efficiently from its total assets, albeit at a slightly lower rate compared to the previous years.

Overall, the long-term activity ratios suggest that Kelly Services, Inc. has been able to improve its efficiency in utilizing fixed assets to generate revenue, while maintaining a relatively stable performance in generating revenue from its total assets.