Patterson Companies Inc (PDCO)

Short-term

Turnover ratios

Patterson Companies Inc's activity ratios provide insights into its efficiency in managing its assets and liabilities.

1. Inventory Turnover: Patterson's inventory turnover has remained relatively stable over the past five years, ranging between 5.29 and 6.63. This indicates that the company is able to sell and replace its inventory multiple times throughout the year. A higher turnover generally suggests efficient inventory management.

2. Receivables Turnover: The receivables turnover ratio has fluctuated over the years, ranging from 12.00 to 14.53. This ratio indicates how quickly Patterson is collecting payments from its customers. A higher turnover is generally preferable as it signifies faster collection of receivables.

3. Payables Turnover: Patterson's payables turnover ratio has also varied, ranging from 4.98 to 7.73. This ratio reflects how quickly the company pays its suppliers. A higher turnover ratio may indicate that the company is managing its payments effectively.

4. Working Capital Turnover: Patterson's working capital turnover has shown improvement over the years, peaking at 14.72 in the latest year. This ratio indicates how efficiently the company is using its working capital to generate sales. A higher turnover implies that the company is effectively utilizing its working capital to support its operations.

Overall, Patterson Companies Inc's activity ratios reflect a mix of efficiency in managing inventory, receivables, payables, and working capital. It is essential for the company to continue monitoring and optimizing these ratios to ensure continued operational efficiency and financial health.

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Average number of days

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

1. Days of Inventory on Hand (DOH):
- The trend shows a slight improvement in inventory management efficiency over the past five years, with the number of days of inventory on hand decreasing from 69.06 days in 2020 to 55.08 days in 2024.
- This suggests that Patterson is turning over its inventory more quickly, which could be a positive sign of effective inventory management.

2. Days of Sales Outstanding (DSO):
- The trend in days of sales outstanding fluctuates slightly but shows a relatively stable pattern overall, ranging from 25.11 days in 2022 to 30.41 days in 2024.
- A lower DSO indicates that Patterson is collecting its accounts receivable faster, which is a positive sign of efficient credit management.

3. Number of Days of Payables:
- The trend in the number of days of payables also shows fluctuations, with the company taking between 47.23 days in 2021 and 73.30 days in 2020 to pay its suppliers.
- A longer period of payables turnover implies that Patterson is taking longer to settle its payables, which could have cash flow implications but could also indicate strong negotiating power with its suppliers.

In summary, Patterson Companies Inc's activity ratios demonstrate improvements in inventory turnover and stable collections of receivables, while the trend in payables turnover has shown fluctuations. These metrics are essential for evaluating the company's operational efficiency and liquidity management.

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Long-term

Patterson Companies Inc's long-term activity ratios provide insight into the efficiency of the company's utilization of its assets over the past five years. The fixed asset turnover ratio has shown a fluctuating trend, decreasing from 30.49 in 2022 to 28.67 in 2024. This suggests that the company is generating slightly fewer revenues from its fixed assets in recent years.

On the other hand, the total asset turnover ratio has indicated a more stable performance, ranging between 2.02 and 2.37 over the same period. This ratio measures the efficiency of the company in generating sales from all its assets, including fixed and current assets. The consistent performance of the total asset turnover ratio implies that Patterson Companies Inc has been maintaining a relatively stable level of sales relative to its total assets.

Overall, while the fixed asset turnover ratio has displayed some decline, the total asset turnover ratio suggests that the company has been effectively utilizing its assets to generate sales. Further analysis and comparison with industry benchmarks would provide a more comprehensive understanding of Patterson Companies Inc's long-term activity efficiency.