Kenvue Inc. (KVUE)

Short-term

Turnover ratios

Kenvue Inc.'s activity ratios provide insights into how efficiently the company manages its assets and liabilities to generate sales.

1. Inventory Turnover:
The inventory turnover ratio measures how effectively Kenvue Inc. is able to sell its inventory during a specific period. The trend shows an improvement from 4.66 in December 2023 to 8.73 in December 2024. This indicates that the company is selling its inventory at a faster rate, which is generally a positive sign as it reduces holding costs and potential obsolescence.

2. Receivables Turnover:
The receivables turnover ratio reflects how efficiently Kenvue Inc. is able to collect outstanding receivables from its customers. The trend shows a slight fluctuation but remains relatively stable, ranging from 6.43 to 7.38. A higher ratio suggests that the company is collecting its receivables quickly, which is beneficial for maintaining a steady cash flow.

3. Payables Turnover:
The payables turnover ratio indicates how many times Kenvue Inc. pays its suppliers over a specific period. The ratio has been increasing consistently from 3.46 in December 2023 to 6.16 in December 2024. A higher payables turnover ratio indicates that the company is efficiently managing its trade credit, potentially negotiating better terms with suppliers.

4. Working Capital Turnover:
The working capital turnover ratio measures how effectively Kenvue Inc. utilizes its working capital to generate sales. The data provided shows that only the ratio for December 31, 2023, is available (23.27), while subsequent periods have missing data. A high working capital turnover ratio signifies that the company is efficiently using its current assets to support sales activities.

In summary, Kenvue Inc.'s activity ratios reflect improving efficiency in managing inventory, collecting receivables, and paying suppliers. These trends indicate that the company is making effective use of its resources to drive sales and maintain a healthy financial position.

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Average number of days

Kenvue Inc.'s activity ratios provide insights into how efficiently the company manages its working capital.

1. Days of Inventory on Hand (DOH):
- Kenvue Inc. has shown an improving trend in managing its inventory holdings. The number of days of inventory on hand decreased from 78.40 days as of December 31, 2023, to 41.81 days by December 31, 2024. This indicates that the company has been able to sell its inventory more quickly over time.

2. Days of Sales Outstanding (DSO):
- The days of sales outstanding for Kenvue Inc. show a fluctuating pattern, with a slight increase in the most recent period. DSO was 49.48 days as of December 31, 2023, and increased to 51.42 days by December 31, 2024. This implies that the company is taking slightly longer to collect its accounts receivable.

3. Number of Days of Payables:
- Kenvue Inc. has managed to reduce its payment period to suppliers significantly. The number of days of payables decreased from 105.43 days on December 31, 2023, to 59.24 days by December 31, 2024. This indicates that the company is taking longer to pay its suppliers, potentially improving its cash flow position.

Overall, Kenvue Inc. has made progress in managing its working capital efficiently, particularly in terms of inventory and payables turnover. However, the company may need to focus on improving its accounts receivable collection process to maintain a healthy liquidity position.

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Long-term

Kenvue Inc.'s long-term activity ratios provide insights into how efficiently the company utilizes its assets to generate revenue.

1. Fixed Asset Turnover: This ratio measures how well a company's fixed assets generate sales. From December 31, 2023, to December 31, 2024, Kenvue Inc.'s Fixed Asset Turnover ratio increased steadily from 7.49 to 8.31. This indicates that the company's fixed assets became more productive over the period, generating more sales per unit of fixed assets.

2. Total Asset Turnover: Total Asset Turnover ratio indicates the efficiency with which a company utilizes all its assets to generate revenue. Kenvue Inc.'s Total Asset Turnover ratio also increased gradually from 0.55 on December 31, 2023, to 0.60 on December 31, 2024. This suggests that the company improved its overall asset utilization efficiency, generating more revenue for each dollar of assets held.

Overall, the increasing trend in both the Fixed Asset Turnover and Total Asset Turnover ratios signifies an improvement in the efficiency of asset utilization at Kenvue Inc. over the period under review. This indicates positive operational performance and effective management of the company's assets to drive revenue growth.