Patterson Companies Inc (PDCO)

Short-term

Turnover ratios

Based on the activity ratios of Patterson Companies Inc, we can observe the following trends:

1. Inventory Turnover:
- The inventory turnover ratio remained relatively stable over the period, ranging between 6.41 and 6.63.
- This indicates that the company is efficiently managing its inventory and selling through its stock of goods multiple times during the year.

2. Receivables Turnover:
- The receivables turnover ratio varied, showing values of 13.56, 12.00, and some missing values.
- A higher turnover ratio suggests that the company is collecting its receivables more frequently, reflecting good credit management practices.

3. Payables Turnover:
- The payables turnover ratio also fluctuated, with values of 7.03 and 6.96, and some missing values.
- A higher turnover ratio for payables indicates that the company is paying off its suppliers more quickly.

4. Working Capital Turnover:
- The working capital turnover ratio increased from 9.80 to 14.72, demonstrating a more efficient use of working capital over the period.
- A higher turnover ratio indicates that the company is generating more revenue for each unit of working capital employed.

Overall, the activity ratios suggest that Patterson Companies Inc has been effectively managing its inventory, receivables, payables, and working capital, which are all crucial for maintaining operational efficiency and liquidity.

---

Average number of days

Patterson Companies Inc's activity ratios provide insights into how efficiently the company manages its inventory, collects its receivables, and pays its suppliers.

1. Days of Inventory on Hand (DOH): In the period ending April 30, 2024, Patterson Companies Inc held inventory for an average of 55.08 days, which is relatively steady compared to previous years. A lower DOH indicates more efficient inventory management, while a higher DOH may suggest excess inventory or slow-moving items.

2. Days of Sales Outstanding (DSO): In the period ending April 27, 2024, the company took an average of 30.41 days to collect on its sales, which increased from 26.93 days in the previous year. A lower DSO indicates efficient credit management and prompt collection of receivables, while a higher DSO may suggest potential issues with credit policies or collection procedures.

3. Number of Days of Payables: As of April 27, 2024, Patterson Companies Inc took an average of 52.44 days to pay its suppliers, which is consistent with the previous year's figure of 51.90 days. A longer payment period could indicate a better cash flow position but may also strain relationships with suppliers if extended beyond typical terms.

Overall, Patterson Companies Inc's activity ratios suggest a stable inventory management process, a slight increase in the collection period for receivables, and consistent payment terms with suppliers. These ratios are vital for assessing the company's operational efficiency and liquidity position.

---

Long-term

Long-term activity ratios provide insights into how effectively a company is utilizing its assets to generate sales revenue over an extended period. For Patterson Companies Inc, the fixed asset turnover ratio remained relatively stable at around 30.49 for the fiscal years ending in April 2022 and 2023. However, there was a slight decrease to 28.67 in April 2024, suggesting a potential decrease in the efficiency of utilizing fixed assets to generate sales.

In contrast, the total asset turnover ratio for Patterson Companies Inc declined from 2.37 in April 2022 to 2.25 in April 2023 and remained at 2.27 for both April 2024 and the following year. This indicates a decrease in the company's ability to generate sales relative to its total asset base over the long term.

Overall, the declining trend in both fixed asset turnover and total asset turnover ratios for Patterson Companies Inc may signal a need for further analysis to identify potential inefficiencies in asset utilization and revenue generation strategies.