Callaway Golf Company (MODG)

Short-term

Turnover ratios

Inventory turnover indicates how efficiently a company manages its inventory levels. Topgolf Callaway Brands Corp's inventory turnover has fluctuated over the past five years, ranging from 1.65 to 2.64. The improvement from 2022 to 2023 suggests better inventory management in the most recent year, although the ratio is still relatively low compared to industry standards.

Receivables turnover reflects how quickly a company collects payments from its customers. Topgolf Callaway Brands Corp's receivables turnover has generally been high, indicating effective credit management and prompt collection of receivables. The slight decline in 2023 from the previous two years may warrant further investigation.

Payables turnover illustrates how efficiently a company pays its suppliers. The payables turnover for Topgolf Callaway Brands Corp has shown variation but has generally been stable over the years. The company pays its suppliers relatively quickly, with a ratio consistently above 9.

Working capital turnover measures how efficiently a company utilizes its working capital to generate sales. Topgolf Callaway Brands Corp's working capital turnover has fluctuated over the years, with a notable increase from 2020 to 2021 before declining again in 2023. The company's ability to generate sales relative to its working capital has varied, indicating some changes in operational efficiency.

Overall, while Topgolf Callaway Brands Corp demonstrates effective management of receivables and payables, there may be opportunities to further optimize inventory management and working capital utilization to enhance overall operational efficiency.

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Average number of days

Days of Inventory on Hand (DOH) measures how many days it takes for a company to sell its inventory. A decreasing trend in DOH indicates better inventory management efficiency. Topgolf Callaway Brands Corp's DOH has fluctuated over the past five years, with a significant increase in 2022 followed by a decrease in 2023. This suggests a possible improvement in inventory turnover efficiency.

Days of Sales Outstanding (DSO) measures how long it takes a company to collect its accounts receivable. A lower DSO indicates faster collection of receivables, which is preferable. Topgolf Callaway Brands Corp's DSO has shown some fluctuations but has generally decreased over the years, indicating improved efficiency in collecting receivables, especially from 2019 to 2021.

Number of Days of Payables measures the number of days a company takes to pay its suppliers. A higher number of days suggests the company is taking longer to settle its payables. Topgolf Callaway Brands Corp's number of days of payables has varied over the years, showing an increasing trend between 2021 and 2023.

Overall, the company has shown improvement in inventory turnover efficiency and accounts receivable collection efficiency over the years, while there is a trend of taking longer to pay its suppliers. Further analysis and comparison with industry benchmarks would provide a better understanding of the company's performance in managing its working capital effectively.

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Long-term

The fixed asset turnover ratio for Topgolf Callaway Brands Corp has shown a decreasing trend over the past five years. This ratio indicates the efficiency with which the company utilizes its fixed assets to generate revenue. The downward trend suggests that the company may not be utilizing its fixed assets as effectively in recent years compared to previous years.

On the other hand, the total asset turnover ratio has been relatively stable over the same period. This ratio measures how efficiently the company uses all its assets to generate sales. A consistent total asset turnover ratio could indicate that Topgolf Callaway Brands Corp is effectively managing its total assets to generate revenue.

Overall, the fixed asset turnover ratio declining while the total asset turnover ratio remains stable may imply that the company is potentially experiencing challenges in effectively utilizing its fixed assets to generate sales. This could be a point of concern for stakeholders as it may indicate inefficiencies in the company's operations related to its fixed assets. Further analysis and investigation into the reasons behind these trends would be necessary to fully understand the company's long-term activity ratios.