The Marzetti Company (MZTI)

Short-term

Turnover ratios

The activity ratios for The Marzetti Company over the period from June 30, 2021, to June 30, 2025, demonstrate notable trends in inventory management, receivables collection, payables utilization, and overall working capital efficiency.

Inventory turnover fluctuated slightly over the period, starting at 8.86 in 2021, rising marginally to 9.13 in 2022, and maintaining a similar level at 9.06 in 2023. Subsequently, there was a decline to 8.31 in 2024, followed by a modest recovery to 8.59 in 2025. This indicates a relatively stable inventory management process, though the decline in 2024 suggests a possible accumulation of inventory or a slowdown in sales velocity, with a slight improvement observed in 2025.

Receivables turnover exhibited an initial decrease from 14.99 in 2021 to 12.37 in 2022, implying a slight loosening in receivables collection efficiency during that period. However, this ratio significantly increased to 15.85 in 2023, then continuously improved to 19.59 in 2024 and nearly 19.92 in 2025. Such trends indicate a progressive enhancement in receivables management, leading to faster collection of receivables and better cash flow management.

Payables turnover showed a steady increase, moving from 9.79 in 2021 to 12.83 in 2023, suggesting an extended period of favorable credit terms with suppliers or increased efficiency in managing payables. Thereafter, the ratio slightly declined to 12.12 in 2024 before rising again to 12.32 in 2025, maintaining a relatively stable and high level. This pattern reflects an effective balance in managing obligations to suppliers, likely leveraging credit terms prudently.

Working capital turnover experienced a significant rise from 5.88 in 2021 to 9.00 in 2022, indicating a substantial improvement in the utilization of working capital to generate sales. The ratio stabilized somewhat at 8.86 in 2023, then declined to 7.20 in 2024 before a moderate increase to 7.42 in 2025. The initial sharp increase suggests enhanced operational efficiency, while the subsequent decline and partial recovery may reflect fluctuations in sales volumes or working capital management strategies.

Overall, these activity ratios reveal that The Marzetti Company has improved its receivables collection efficiency significantly over the period, maintained stable inventory and payable management practices, and experienced variable but generally efficient use of working capital. The trends suggest a company that is progressively optimizing its operational processes, with particular strength in receivables management.

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Average number of days

The analysis of The Marzetti Company's activity ratios over the period from June 30, 2021, to June 30, 2025, reveals trends in inventory management, receivables collection, and payables payment behavior.

Days of Inventory on Hand (DOH):
The DOH figures indicate slight fluctuations around a narrow range, with a low point of approximately 39.99 days in June 2022 and an increase to about 43.93 days in June 2024. Overall, the data suggests a relatively stable inventory turnover cycle, with the company holding inventory for roughly 40 days on average. The minor increase noted in 2024 may imply a slight slowdown in inventory turnover or an adjustment in inventory management strategies.

Days of Sales Outstanding (DSO):
The DSO figures exhibit some variability, decreasing notably from 29.50 days in June 2022 to 23.02 days in June 2023, which indicates an improvement in receivables collection efficiency during that period. Subsequently, the DSO decreased further to approximately 18.63 days in June 2024 and slightly to 18.32 days in June 2025, reflecting increasingly prompt collection processes or tighter credit policies. This downward trend signifies enhanced cash flow management and shortened cash conversion cycles.

Number of Days of Payables:
The payables period shows a decreasing trend from 37.28 days in June 2021 to 28.45 days in June 2023, suggesting the company was paying its suppliers more quickly during this phase. From 2023 onward, the payables period stabilizes around 29 to 30 days, indicating consistent payment practices. The earlier reduction could reflect improved cash management or negotiated credit terms, whereas the stabilization indicates a balanced approach to managing payables without undue delay or haste.

Summary of Trends:
Overall, The Marzetti Company demonstrates a consistent activity profile characterized by stable inventory levels, progressively improved receivables collection times, and relatively steady payables management. The reduction in DSO over the analyzed period highlights enhanced efficiency in cash conversion, while the modest increases in DOH and stable payables suggest careful inventory and liabilities management. These trends collectively point toward improved operational efficiency and cash flow management over the recent years.

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Long-term

The long-term activity ratios of The Marzetti Company, as reflected in the asset turnover metrics, indicate an overall trend of increasing efficiency over the period from June 2021 through June 2023, followed by a slight decline in subsequent years. Specifically, the Fixed Asset Turnover ratio remained unavailable throughout the observed period, suggesting either a lack of data or negligible fixed asset utilization or changes that were not captured within this timeframe.

In contrast, the Total Asset Turnover ratio demonstrated a consistent upward trajectory from 1.33 in June 2021 to a peak of 1.64 in June 2023. This upward movement signifies improved overall asset efficiency in generating sales during this period. The increase from 1.33 to 1.64 reflects that the company was utilizing its total assets more effectively to generate revenue, possibly due to operational improvements or better asset management strategies.

Post-June 2023, the ratio experienced a marginal decline, moving from 1.64 down to 1.55 in June 2024 and further to 1.50 in June 2025. This downward trend suggests a slight reduction in the efficiency of asset utilization in generating sales, which could be attributed to factors such as increased asset base without a proportional increase in sales, operational challenges, or shifting market conditions.

Overall, the company's long-term activity ratios depict a period of enhanced asset efficiency culminating around mid-2023, followed by a modest decrease. The absence of fixed asset turnover data limits the ability to analyze specific fixed asset utilization, but the overall asset turnover trend provides valuable insights into the company's long-term operational efficiency dynamics during these years.