Middleby Corp (MIDD)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Inventory turnover | 2.86 | 2.67 | 2.40 | 2.46 | 3.02 |
| Receivables turnover | — | — | — | — | — |
| Payables turnover | — | — | — | — | — |
| Working capital turnover | 2.58 | 3.62 | 3.96 | 4.10 | 4.41 |
Middleby Corp's activity ratios provide insight into how efficiently the company is managing its assets and generating revenues.
1. Inventory Turnover:
- The inventory turnover ratio measures how many times a company sells and replaces its inventory during a specific period. Middleby Corp's inventory turnover has seen a slight decline over the years, from 3.02 in 2020 to 2.86 in 2024. This trend indicates that the company is selling its inventory less frequently, which could imply potential issues with sales or excessive inventory levels.
2. Receivables Turnover:
- The receivables turnover ratio indicates how efficiently a company is collecting on its credit sales. In this case, the data shows that no specific values were provided for Middleby Corp's receivables turnover from 2020 to 2024. This lack of information makes it challenging to assess the company's effectiveness in collecting outstanding receivables.
3. Payables Turnover:
- The payables turnover ratio measures how quickly a company pays off its suppliers. Similarly, the data indicates that no values were provided for Middleby Corp's payables turnover from 2020 to 2024, making it difficult to evaluate the company's payment efficiency towards its suppliers.
4. Working Capital Turnover:
- The working capital turnover ratio reflects how efficiently a company is utilizing its working capital to generate sales. Middleby Corp's working capital turnover has shown a decreasing trend from 4.41 in 2020 to 2.58 in 2024. This decline suggests a decrease in sales relative to the amount of working capital employed by the company, indicating potential inefficiencies in capital utilization or a decline in revenue generation.
In conclusion, Middleby Corp's activity ratios highlight areas where the company may need to focus on improving its operational efficiency, such as inventory management, accounts receivable collection, payables management, and working capital utilization to enhance overall performance and profitability.
Average number of days
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 127.73 | 136.50 | 152.10 | 148.67 | 120.87 |
| Days of sales outstanding (DSO) | days | — | — | — | — | — |
| Number of days of payables | days | — | — | — | — | — |
Middleby Corp's activity ratios provide insight into how efficiently the company manages its resources.
1. Days of Inventory on Hand (DOH):
- The trend shows an increase in Days of Inventory on Hand from 120.87 days in 2020 to 152.10 days in 2022, before decreasing to 127.73 days in 2024.
- A higher DOH indicates that Middleby Corp holds inventory for a longer period before selling, which may tie up working capital and increase storage costs.
2. Days of Sales Outstanding (DSO):
- The data shows that Days of Sales Outstanding are not available for the years 2020 to 2024.
- DSO measures the average number of days it takes for Middleby Corp to collect payments from its customers after making a sale. The absence of data for this ratio suggests limited visibility regarding the company's receivables management.
3. Number of Days of Payables:
- Similarly, the information regarding the Number of Days of Payables is not provided for the years 2020 to 2024.
- A longer period of payables indicates that Middleby Corp takes more time to pay its suppliers, which could be a strategy to manage cash flow or negotiate better terms.
Overall, the analysis of Middleby Corp's activity ratios highlights fluctuations in inventory management efficiency and underscores the importance of monitoring working capital components to optimize the company's operational performance and liquidity position.
Long-term
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Fixed asset turnover | — | — | 9.09 | 8.53 | 7.30 |
| Total asset turnover | 0.53 | 0.58 | 0.59 | 0.51 | 0.48 |
The fixed asset turnover ratio for Middleby Corp has shown a consistent uptrend over the past few years, increasing from 7.30 in 2020 to 9.09 in 2022. This indicates that the company is generating more revenue for each dollar invested in fixed assets, reflecting the efficient utilization of these long-term assets to generate sales.
On the other hand, the total asset turnover ratio has varied slightly over the same period, with a peak of 0.59 in 2022. This ratio measures the company's ability to generate sales from its total assets, including both fixed and current assets. The slight decline in 2023 and 2024 suggests that while the company is efficient in utilizing its fixed assets, there may be room for improvement in the overall utilization of all assets to generate revenue.
Overall, the increasing trend in fixed asset turnover indicates positive operational efficiency and effective management of long-term assets, while the fluctuation in total asset turnover suggests potential opportunities for further optimization in asset utilization to drive sales growth.