Prestige Brand Holdings Inc (PBH)
Activity ratios
Short-term
Turnover ratios
| Mar 31, 2024 | Mar 31, 2023 | Mar 31, 2022 | Mar 31, 2021 | Mar 31, 2020 | |
|---|---|---|---|---|---|
| Inventory turnover | 3.61 | 3.10 | 3.87 | 3.44 | 3.54 |
| Receivables turnover | 6.37 | 6.75 | 7.80 | 8.23 | 6.40 |
| Payables turnover | 12.85 | 8.01 | 8.36 | 8.61 | 6.59 |
| Working capital turnover | 4.36 | 4.88 | 7.25 | 6.39 | 4.46 |
The activity ratios of Prestige Brand Holdings Inc provide insights into the efficiency of its operations and management of its working capital.
1. Inventory turnover has shown some fluctuations over the past five years, ranging from 3.10 to 3.87, with the most recent ratio standing at 3.61. This indicates that the company is able to sell and replace its inventory approximately 3.61 times during the year, with a relatively stable trend.
2. Receivables turnover has also exhibited variability, with a high of 8.23 in 2021 and a low of 6.37 in 2024. Currently, the ratio is at 6.37, suggesting that the company collects its receivables approximately 6.37 times a year. The downward trend in receivables turnover may indicate a lengthening of the average collection period, which could impact cash flow.
3. Payables turnover has shown an increasing trend over the years, reaching 12.85 in 2024. This implies that the company is managing its payables efficiently by paying its suppliers approximately 12.85 times a year. A high payables turnover ratio can indicate favorable credit terms with suppliers.
4. Working capital turnover has displayed fluctuations, with the highest ratio of 7.25 in 2022 and the lowest of 4.36 in 2024. Currently, the ratio stands at 4.36, indicating that the company generates sales volume relative to its working capital at a rate of 4.36 times per year. A higher working capital turnover suggests effective utilization of working capital resources.
In general, analyzing these activity ratios can assist in assessing Prestige Brand Holdings Inc's operational efficiency, inventory management, collection of receivables, and management of payables. It is essential for the company to monitor these ratios closely to optimize its working capital and overall business performance.
Average number of days
| Mar 31, 2024 | Mar 31, 2023 | Mar 31, 2022 | Mar 31, 2021 | Mar 31, 2020 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 101.08 | 117.78 | 94.23 | 105.99 | 103.09 |
| Days of sales outstanding (DSO) | days | 57.34 | 54.06 | 46.79 | 44.37 | 57.05 |
| Number of days of payables | days | 28.40 | 45.58 | 43.66 | 42.39 | 55.42 |
Activity ratios are key indicators of how efficiently a company manages its assets and liabilities in relation to sales. Let's analyze the activity ratios of Prestige Brand Holdings Inc over the past five years.
1. Days of Inventory on Hand (DOH):
- DOH measures how many days, on average, inventory is held before being sold. A lower DOH indicates faster inventory turnover.
- Prestige Brand's DOH has fluctuated over the past five years, ranging from 94.23 days to 117.78 days. In 2024, the DOH was 101.08 days.
- The decrease in DOH from 2023 to 2022 indicates improved inventory management efficiency, but the increase in 2024 compared to 2022 suggests a slowdown in turning inventory into sales.
2. Days of Sales Outstanding (DSO):
- DSO shows the average number of days it takes for the company to collect payment after making a sale. A lower DSO implies faster collection of receivables.
- Prestige Brand's DSO has generally decreased over the years, with some fluctuations. In 2024, the DSO was 57.34 days.
- The increase in DSO from 2022 to 2023 and a slight increase in 2024 indicate a potential delay in collecting payments, which may affect the company's cash flow.
3. Number of Days of Payables:
- This ratio represents the average number of days it takes for the company to pay its suppliers. A higher number of days indicates a longer payment period.
- Prestige Brand's days of payables have varied over the years, with fluctuations observed. In 2024, the days of payables stood at 28.40 days.
- The decreasing trend in days of payables from 2022 to 2024 implies a relatively shorter time taken to settle payables, which could impact the company's working capital management.
In conclusion, while Prestige Brand has shown improvements in managing its sales outstanding and payables over the years, the recent increase in days of inventory on hand and DSO in 2024 may warrant further investigation into the company's inventory and receivables management practices. Overall, monitoring and optimizing these activity ratios are crucial for enhancing operational efficiency and liquidity management.
Long-term
| Mar 31, 2024 | Mar 31, 2023 | Mar 31, 2022 | Mar 31, 2021 | Mar 31, 2020 | |
|---|---|---|---|---|---|
| Fixed asset turnover | 14.71 | 16.02 | 15.24 | 13.47 | 17.20 |
| Total asset turnover | 0.34 | 0.34 | 0.30 | 0.28 | 0.27 |
The fixed asset turnover ratio for Prestige Brand Holdings Inc has shown a declining trend over the last five years, from 17.20 in 2020 to 14.71 in 2024. This indicates that the company generated $14.71 in sales for every $1 invested in fixed assets in 2024, down from $17.20 in 2020.
On the other hand, the total asset turnover ratio has remained relatively stable around 0.30 to 0.34 over the same period. This implies that the company generated approximately $0.30 to $0.34 in sales for every $1 of total assets during the last five years.
The declining trend in the fixed asset turnover ratio may suggest that there could be inefficiencies in the utilization of fixed assets to generate sales. However, the stable total asset turnover ratio indicates that the company has been effectively managing its total assets to generate sales consistently over the period.
Overall, while the fixed asset turnover ratio has been declining, the total asset turnover ratio has remained relatively stable for Prestige Brand Holdings Inc in recent years.