McCormick & Company Incorporated (MKC)

Short-term

Turnover ratios

McCormick & Company's activity ratios, based on the provided data, can provide insights into how effectively the company manages its resources related to inventory, receivables, and payables.

1. Inventory Turnover:
- The inventory turnover ratio measures how efficiently McCormick & Company sells its inventory. From 2020 to 2024, the trend shows a slight fluctuation in inventory turnover, ranging from 3.04 to 3.69. This indicates that on average, the company turns its inventory into sales approximately 3 to 4 times a year.

2. Receivables Turnover:
- The receivables turnover ratio indicates how efficiently the company collects payments from its customers. McCormick & Company's receivables turnover ratio improved over the years, increasing from 10.60 in 2020 to 11.45 in 2024. This suggests that the company is collecting payments more quickly from its customers.

3. Payables Turnover:
- The payables turnover ratio reflects how quickly McCormick & Company pays its suppliers. The data shows a slight fluctuation in payables turnover, ranging from 3.20 to 3.72. A higher turnover ratio generally indicates that the company is paying its suppliers more quickly.

4. Working Capital Turnover:
- The absence of data for working capital turnover for all years suggests that it might not be applicable or relevant to analyze for McCormick & Company. This could be due to the nature of the company's operations or the way it manages its working capital.

In conclusion, based on the activity ratios analyzed, McCormick & Company appears to effectively manage its inventory, receivables, and payables. The company demonstrates efficient inventory turnover, improved receivables turnover, and relatively consistent payables turnover over the years.

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Average number of days

Based on the provided data on activity ratios for McCormick & Company Incorporated, we can analyze the following key metrics:

1. Days of Inventory on Hand (DOH):
- The days of inventory on hand for McCormick fluctuated over the past five years, ranging from a high of 120 days on November 30, 2022, to a low of 98.85 days on November 30, 2023. Overall, the company maintained an average of approximately 111 days of inventory on hand during this period.

2. Days of Sales Outstanding (DSO):
- The days of sales outstanding, indicating how long it takes for the company to collect revenue after a sale, remained relatively stable for McCormick. The DSO decreased from 34.44 days on November 30, 2020, to 31.89 days on November 30, 2024. This suggests efficient management of accounts receivable.

3. Number of Days of Payables:
- The number of days of payables represents how long it takes for the company to pay its suppliers. McCormick's payables period ranged from 98.21 days on November 30, 2023, to 114.15 days on November 30, 2020. This indicates variations in the company's payment cycles over the years.

Overall, McCormick & Company Incorporated has shown variations in its activity ratios over the past five years, with some stability in DSO and fluctuations in DOH and payables days. Efficient management of inventory, receivables, and payables is crucial for maintaining healthy working capital and operating efficiency.

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Long-term

Based on the provided data for McCormick & Company Incorporated's long-term activity ratios, we can analyze the fixed asset turnover and total asset turnover ratios over the five-year period from November 30, 2020, to November 30, 2024.

1. Fixed Asset Turnover:
- The fixed asset turnover ratio indicates how efficiently a company is using its fixed assets to generate sales.
- The fixed asset turnover ratio for McCormick & Company has shown a slight fluctuation over the period.
- It increased from 5.45 in November 30, 2020, to 5.54 in November 30, 2021, displaying initial efficiency.
- However, the ratio decreased in the subsequent years, dropping to 5.30 in November 30, 2022, then to 5.03 in November 30, 2023, and finally to 4.76 in November 30, 2024.
- The declining trend in fixed asset turnover suggests that the company may be less effective in utilizing its fixed assets to generate sales as the ratio decreases over time.

2. Total Asset Turnover:
- The total asset turnover ratio measures how efficiently a company is utilizing its total assets to generate revenue.
- McCormick & Company's total asset turnover ratio has remained relatively stable over the five-year period.
- It increased from 0.46 in November 30, 2020, to 0.49 in November 30, 2021, indicating better asset utilization.
- Subsequently, the ratio hovered around 0.48 to 0.52 in the following years, with minor fluctuations.
- The consistent total asset turnover ratio suggests that the company has been maintaining a relatively steady level of efficiency in generating revenue with its total assets.

In conclusion, while the total asset turnover ratio remained relatively stable for McCormick & Company Incorporated, the declining trend in the fixed asset turnover ratio indicates a potential decrease in the efficiency of utilizing fixed assets to generate sales over the five-year period. Further analysis and comparison with industry peers may provide additional insights into the company's operational efficiency and asset utilization strategies.