MillerKnoll Inc (MLKN)

Short-term

Turnover ratios

The analysis of MillerKnoll Inc.'s activity ratios over the specified periods reveals several noteworthy trends and considerations.

Inventory Turnover:
The inventory turnover ratio exhibits a generally upward trend from May 2022 through May 2023, increasing from 5.84 to 6.56, indicating improved inventory management and more efficient inventory utilization. This suggests the company is selling and replacing inventory more frequently, which could reduce holding costs and mitigate obsolete stock risks. However, post-May 2023, the ratio experiences a decline, with fluctuations observed down to 5.02 by May 2025, reflecting potential challenges in inventory turnover efficiency or adjustments in inventory levels relative to sales activity.

Receivables Turnover:
Receivables turnover displays variability but overall growth, notably surging from approximately 10.88 in May 2023 to a peak of 24.34 in August 2023, implying enhanced collection efficiency during this period. The high receivables turnover in late 2023 and 2024 indicates that the company is collecting receivables more rapidly, which improves cash flow liquidity. Nonetheless, subsequent declines below pre-peak levels, such as 9.73 in May 2025, suggest some cyclicality or changing credit policies that slightly lengthen the receivables collection cycle over time. The intermittent missing data points indicate periods of reporting gaps but do not alter overall trends.

Payables Turnover:
Payables turnover ratios show fluctuations but present a general downward trend from a high of 12.43 in September 2023 to 8.28 in May 2025. A decreasing payables turnover suggests the company is taking longer to pay its suppliers, which may enhance cash retention but could also impact supplier relationships if extended excessively. The ratio’s decline indicates potentially more conservative liquidity management or strategic delaying of payments.

Working Capital Turnover:
This ratio demonstrates considerable volatility, with values rising sharply to 20.00 in August 2023 and reaching as high as 16.75 in June 2023, before reverting to more modest levels (around 7.86 to 9.53). The elevated figures in mid to late 2023 imply that the company efficiently utilizes its working capital to generate sales during those periods, possibly due to increased sales volume or optimized working capital management. The subsequent decline suggests a normalization or slight strain on working capital efficiency, potentially due to operational adjustments or seasonal effects.

Overall Assessment:
The activity ratios collectively suggest that MillerKnoll Inc. experienced periods of operational efficiency improvements, particularly in receivables and inventory management, during 2023. The peaks in receivables turnover and working capital turnover coincide with periods of heightened operational performance or strategic shifts toward liquidity enhancement. The subsequent declines in inventory and receivables turn ratios indicate either normalization or challenges related to inventory restocking cycles or credit collection cycles. The declining payables turnover ratio suggests an extended payment policy, possibly reflecting strategic cash management.

In summary, the company's activity ratios show a pattern of improving operational efficiency through late 2022 into mid-2023, followed by some stabilization and normalizing activity levels towards late 2024 and early 2025. These trends offer insights into the company's evolving inventory, receivable, and payable management strategies that impact overall working capital and liquidity management.

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Average number of days

The activity ratios for MillerKnoll Inc., encompassing days of inventory on hand, days of sales outstanding (DSO), and days of payables, reveal a dynamic operational profile over the analyzed period.

Inventory Management (Days of Inventory on Hand):
From May 2022 to August 2023, the company’s inventory days generally declined from approximately 62.55 days to a low of 55.13 days, indicating a trend toward improved inventory turnover and potentially more efficient inventory management. However, starting in late 2023 and into early 2024, inventory days increased notably, reaching approximately 70.63 days by February 2025, suggesting a buildup of inventory levels. This rise may reflect strategic stockpiling, supply chain adjustments, or slower inventory sell-through.

Receivables Collection (Days of Sales Outstanding):
DSO fluctuated modestly, generally remaining within a range of about 15 to 34 days throughout the period. Early in 2022, DSO hovered around 32-33 days, indicating a relatively prompt collection cycle. Notably, in June 2023, DSO dropped sharply to 16.73 days, suggesting a significant improvement in receivables collection, possibly due to tighter credit policies or collection efforts. In subsequent periods, DSO stabilized around 15-37 days, reflecting consistent collection patterns with periodic slight increases.

Payables Management (Number of Days of Payables):
The company’s payables period showed a gradual lengthening trend over time. Starting from roughly 37.82 days in May 2022, the payables days decreased slightly to about 29-30 days in 2023 but then extended to approximately 35-44 days by the end of the observed period. The increase in days payable indicates a tendency to extend payment cycles, potentially to optimize working capital or due to vendor relationships and credit terms.

Overall Analysis:
The activity ratios depict a company that initially improved inventory turnover, maintained stable receivable collections, and managed payables with slight variations. Later, the increase in days inventory and payable days suggests shifts towards inventory accumulation and extended payment terms, which might reflect strategic adjustments to cash flow management or operational conditions. The stable yet fluctuating DSO indicates steady receivables management, with occasional improvements in collection efficiency. Monitoring these activity ratios over time can help assess operational efficiency and liquidity management strategies.

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Long-term

The analysis of MillerKnoll Inc.'s long-term activity ratios reveals significant variations over the reporting periods, highlighting trends in asset utilization efficiency.

Starting with the Fixed Asset Turnover ratio, there is notable fluctuation across the periods. In the period ending May 31, 2022, the ratio stands at a high of 12.99, indicating very efficient utilization of fixed assets to generate sales. However, this rate declines sharply in subsequent months, with the lowest observed at 4.41 as of August 31, 2022. The ratio then exhibits a recovery trend, reaching a peak of 14.79 on June 3, 2023, before decreasing again to 8.46 as of August 31, 2023. Towards the later periods, data gaps are observed, with some measurements missing, limiting the ability to assess current fixed asset utilization uniformly. The elevated values, such as the 14.79 in June 2023, suggest periods of high fixed asset efficiency, whereas the lower figures indicate less effective utilization or potential underutilization or restructuring of fixed assets.

The Total Asset Turnover ratio displays a more consistent pattern, generally remaining within the narrow range from approximately 0.88 to 0.97 during most periods, indicating relatively stable overall asset utilization for generating sales. Initially, from May 2022 through May 2023, the ratio fluctuates modestly around 0.93 to 0.98, implying steady efficiency. A notable increase occurs in June 2023, reaching 1.86, which significantly exceeds previous levels and suggests a period of enhanced total asset efficiency, potentially driven by contextual factors such as improved sales performance, asset simplification, or restructuring. Following this spike, the ratio stabilizes around 1.86 to 1.88 in subsequent months, maintaining consistent asset productivity. Toward the latest periods, the ratio settles near 0.89 to 0.93, indicating a return to more typical levels of overall asset utilization efficiency.

In summary, MillerKnoll's long-term activity ratios exhibit variability reflective of operational adjustments, asset management strategies, or shifting sales dynamics. The sharp fluctuations in fixed asset turnover suggest periods of varying fixed asset efficiency, while the total asset turnover indicates a general baseline of stable performance with occasional peaks highlighting periods of enhanced asset productivity.