Middleby Corp (MIDD)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Inventory turnover | 3.71 | 3.23 | 3.35 | 4.18 | 4.31 |
| Receivables turnover | 6.28 | 6.43 | 5.63 | 6.91 | 6.61 |
| Payables turnover | 15.31 | 12.82 | 9.21 | 12.36 | 14.53 |
| Working capital turnover | 3.63 | 3.99 | 4.10 | 4.40 | 4.80 |
Middleby Corp's activity ratios provide insight into the efficiency with which the company manages its inventory, receivables, payables, and working capital.
1. Inventory turnover: Middleby's inventory turnover has fluctuated over the past five years, ranging from a low of 3.23 in 2022 to a high of 4.31 in 2019. The ratio indicates how many times the company's inventory is sold and replaced within a given period. A higher turnover ratio generally indicates better inventory management efficiency.
2. Receivables turnover: Middleby's receivables turnover has also varied, with a peak of 6.91 in 2020 and a low of 5.63 in 2021. This ratio reflects how many times the company collects its accounts receivable in a year. A higher turnover ratio suggests effective credit and collection management.
3. Payables turnover: The payables turnover ratio for Middleby has shown an increasing trend over the years, reaching 15.31 in 2023. This ratio demonstrates how efficiently the company pays its suppliers. A higher turnover ratio could signify the company's ability to manage its payables effectively.
4. Working capital turnover: Middleby's working capital turnover has gradually declined from 4.80 in 2019 to 3.63 in 2023. This ratio measures how effectively the company utilizes its working capital to generate sales revenue. A decreasing trend in this ratio may indicate a need for better working capital management.
Overall, a thorough analysis of Middleby Corp's activity ratios suggests that the company has been relatively efficient in managing its inventory and receivables, while also exhibiting improvements in payables turnover. However, the declining trend in working capital turnover warrants further investigation into the company's working capital management practices.
Average number of days
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 98.25 | 113.05 | 108.88 | 87.25 | 84.69 |
| Days of sales outstanding (DSO) | days | 58.16 | 56.73 | 64.81 | 52.83 | 55.22 |
| Number of days of payables | days | 23.84 | 28.47 | 39.62 | 29.52 | 25.12 |
Activity ratios provide insights into how efficiently a company is managing its assets and liabilities to generate sales. Let's analyze Middleby Corp's activity ratios over the past five years:
1. Days of Inventory on Hand (DOH):
- Middleby Corp's average DOH over the past five years is 98.04 days. This indicates that, on average, the company takes approximately 98 days to sell its inventory.
- The trend shows an increasing pattern from 2019 to 2022, suggesting a longer time taken to turn inventory into sales. However, in 2023, there was a slight improvement in inventory management efficiency.
2. Days of Sales Outstanding (DSO):
- The company's average DSO over the past five years is 57.35 days. This means it takes about 57 days for Middleby Corp to collect its accounts receivable.
- The trend fluctuates over the years, indicating variability in the company's collection efficiency. It peaked in 2021 before decreasing in 2022 and 2023.
3. Number of Days of Payables:
- Middleby Corp's average number of days of payables over the past five years is 29.31 days. This suggests that, on average, the company takes approximately 29 days to pay its suppliers and vendors.
- The trend shows fluctuations, with a general decrease from 2019 to 2022, indicating quicker payment to vendors. In 2023, there was a slight increase in the number of days of payables.
In summary, Middleby Corp has shown varying efficiency in managing its inventory, receivables, and payables over the past five years. The company needs to focus on optimizing inventory turnover and maintaining a balance between collecting receivables timely and managing payables effectively to improve its overall liquidity and operational efficiency.
Long-term
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Fixed asset turnover | 7.92 | 9.16 | 8.53 | 7.29 | 8.40 |
| Total asset turnover | 0.59 | 0.59 | 0.51 | 0.48 | 0.59 |
The fixed asset turnover ratio measures how efficiently a company utilizes its fixed assets to generate sales. Middleby Corp's fixed asset turnover has been fluctuating over the past five years, ranging from 7.29 to 9.16. The trend indicates that the company is generating $7.29 to $9.16 in sales for each dollar invested in fixed assets.
In comparison, the total asset turnover ratio reflects how well the company leverages all its assets to generate revenue. Middleby Corp's total asset turnover has remained relatively stable around 0.59 over the same period. This means that the company generates $0.59 in sales for every dollar of total assets it holds.
Overall, Middleby Corp's fixed asset turnover demonstrates variations in efficiency in utilizing fixed assets, while the total asset turnover suggests consistent performance in leveraging all assets to drive sales. Investors and stakeholders may find these ratios helpful in evaluating the company's operational efficiency and asset utilization over time.