Newell Brands Inc (NWL)

Short-term

Turnover ratios

Newell Brands Inc's inventory turnover has fluctuated over the past five years, ranging from 3.01 to 4.04 times. The decreasing trend from 2019 to 2022 suggests potential inefficiencies in managing inventory levels. However, there was a slight improvement in 2023, indicating a more optimal inventory management.

The receivables turnover ratio has been relatively consistent, with values ranging from 5.28 to 7.57 times. This indicates that Newell Brands is efficient in collecting payments from customers, with a higher ratio suggesting quicker collections.

In terms of payables turnover, Newell Brands experienced fluctuations in this ratio over the years, indicating changes in the company's payment practices. The highest payables turnover was in 2018, while the lowest was in 2021. A higher payables turnover ratio could suggest that the company is taking longer to pay its bills.

The working capital turnover ratio has shown an increasing trend over the years. A higher working capital turnover ratio signifies that Newell Brands is generating more revenue per unit of working capital invested. This improvement reflects the company's ability to efficiently utilize its working capital to drive sales.

In summary, while Newell Brands has shown varying trends in its activity ratios over the past five years, the company appears to be making efforts to enhance its efficiency in managing inventory, receivables, payables, and working capital turnover.

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Average number of days

The activity ratios of Newell Brands Inc provide insights into how efficiently the company manages its inventory, receivables, and payables.

1. Days of Inventory on Hand (DOH): The trend in DOH indicates an improving efficiency in managing inventory over the years. In 2023, the company held inventory for an average of 96.68 days before selling it, which is lower compared to previous years. This suggests that Newell Brands is selling its inventory faster, potentially reducing carrying costs and improving cash flow.

2. Days of Sales Outstanding (DSO): The trend in DSO fluctuates over the years but generally shows a decreasing pattern. In 2023, the company collected its accounts receivable in an average of 53.63 days, which is an improvement compared to prior years. A lower DSO indicates faster collection of receivables, which can enhance liquidity and reduce credit risk.

3. Number of Days of Payables: The number of days of payables also varied over the years but shows a decreasing trend in recent years. In 2023, Newell Brands took, on average, 63.34 days to pay its suppliers and vendors. A longer payment period can help improve cash flow management, but it's important to maintain a balance to maintain good relationships with suppliers.

Overall, the activity ratios suggest that Newell Brands Inc has been making progress in enhancing its operational efficiency, particularly in managing inventory, receivables, and payables. These improvements can contribute to better cash flow management and overall financial performance.

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Long-term

The long-term activity ratios of Newell Brands Inc have shown varying trends over the past five years. The Fixed Asset Turnover, which measures the efficiency of utilizing fixed assets to generate sales, has generally decreased over the period from 2019 to 2023. This suggests that the company is generating fewer sales relative to its investment in fixed assets.

On the other hand, the Total Asset Turnover, which indicates how effectively the company is using all its assets to generate sales, has fluctuated but tends to show an increasing trend from 2019 to 2023. This implies that the company has been better at generating sales with its total assets over the years, although the ratio remains relatively low.

Overall, the trends in these long-term activity ratios indicate that Newell Brands Inc may need to further assess and potentially optimize its utilization of fixed assets to improve efficiency in generating sales. Additionally, the company should continue to focus on enhancing its overall asset turnover to better utilize its resources in generating revenue.