ODP Corp (ODP)

Short-term

Turnover ratios

From the activity ratios provided for ODP Corp, we can assess the efficiency of the company in managing its inventory, receivables, payables, and working capital over the past five years.

1. Inventory Turnover: ODP Corp has maintained a relatively stable inventory turnover ratio, ranging between 9.74 and 11.05. This indicates that the company efficiently turns over its inventory, with an average of approximately 10 times a year during the period under review.

2. Receivables Turnover: The company's receivables turnover ratio has been consistently high, with values ranging from 15.31 to 17.05. This suggests that ODP Corp collects its accounts receivable quickly, on average more than 15 times a year over the past five years.

3. Payables Turnover: ODP Corp's payables turnover ratio has also been stable, varying between 8.81 and 11.01. This indicates that the company efficiently manages its accounts payable, with an average turnover of around 10 times per year during the period analyzed.

4. Working Capital Turnover: The working capital turnover ratio provides insight into how effectively the company utilizes its working capital to generate sales. The significant increase from 2019 to 2020 signifies a substantial improvement in the utilization of working capital. However, the lack of a working capital turnover ratio for the most recent year hinders a direct comparison.

Overall, based on the activity ratios, ODP Corp appears to have maintained efficient management of its inventory, receivables, and payables over the past five years. The improvement in working capital turnover from 2019 to 2020 suggests enhanced efficiency in utilizing resources to generate revenue.

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Average number of days

Days of inventory on hand (DOH) for ODP Corp has been relatively stable over the past five years, with a slight decrease from 37.46 days in 2021 to 36.05 days in 2023. This suggests that the company is managing its inventory efficiently, taking around 36 days to sell its inventory.

Days of sales outstanding (DSO) has shown a more variable trend, decreasing from 49.01 days in 2019 to 22.75 days in 2023. This indicates that ODP Corp has improved its collection efficiency, taking around 23 days to collect its accounts receivable.

The number of days of payables has fluctuated over the years, with a decrease from 41.43 days in 2021 to 35.58 days in 2023. This indicates that the company is taking around 36 days to pay its suppliers, demonstrating a stable payment cycle.

Overall, ODP Corp's activity ratios suggest that the company has been effectively managing its inventory, improving its collection efficiency, and maintaining a stable payment cycle over the past five years. These ratios reflect a healthy balance between the company's operations and financial management.

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Long-term

The long-term activity ratios of ODP Corp indicate the efficiency of the company in generating revenue from its fixed and total assets over the years. The fixed asset turnover has exhibited a generally increasing trend from 2019 to 2023, reaching a peak of 24.08 in 2022 before slightly decreasing to 21.76 in 2023. This indicates that the company has been able to effectively utilize its fixed assets to generate sales, with a higher ratio suggesting better asset utilization.

Furthermore, the total asset turnover ratio also shows a consistent improvement over the same period, increasing from 1.44 in 2019 to 2.01 in 2023. This indicates that the company has been successful in generating revenue relative to its total asset base, reflecting efficient asset management and effective use of resources to drive sales.

Overall, the upward trend in both fixed asset turnover and total asset turnover ratios suggests that ODP Corp has enhanced its operational efficiency and productivity in converting assets into sales, which is a positive indicator of the company's performance and ability to generate revenue.