Penn National Gaming Inc (PENN)

Short-term

Turnover ratios

Activity ratios provide insights into how effectively a company manages its assets and liabilities to generate sales. Let's analyze the activity ratios of PENN Entertainment Inc over the past five years.

1. Receivables Turnover:
- Receivables turnover measures how efficiently a company collects on credit sales. A higher turnover indicates faster collection.
- PENN's receivables turnover has been declining over the years, from 59.77 in 2019 to 19.95 in 2023. This suggests the company may be experiencing challenges in collecting its receivables efficiently.

2. Payables Turnover:
- Payables turnover measures how quickly a company pays its suppliers. A higher turnover indicates faster payment.
- PENN's payables turnover has fluctuated but generally increased over the period, from 73.31 in 2019 to 109.31 in 2023. This indicates that the company is managing its payables more effectively, possibly taking advantage of favorable credit terms.

3. Working Capital Turnover:
- Working capital turnover measures how efficiently a company utilizes its working capital to generate sales revenue.
- PENN's working capital turnover has shown significant improvement, from 2.92 in 2020 to 37.65 in 2023. This suggests that the company is utilizing its working capital more effectively to drive sales growth.

Overall, while there are areas for improvement such as managing receivables more efficiently, PENN Entertainment Inc has demonstrated progress in optimizing its payables and working capital turnover to drive business operations and sales growth.

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Average number of days

Days of Inventory on Hand (DOH) for PENN Entertainment Inc are not provided in the table, so we cannot analyze the efficiency of inventory management over time.

Days of Sales Outstanding (DSO) have increased steadily from 6.11 days in 2019 to 18.30 days in 2023. This indicates that the average collection period for accounts receivable has lengthened over the years, suggesting that the company may be facing challenges in collecting payments from customers promptly.

The Number of Days of Payables has fluctuated over the years, with a general decreasing trend from 6.49 days in 2020 to 3.34 days in 2023. This decrease implies that the company is taking less time to pay its suppliers, which may indicate improved cash management or negotiation leverage with suppliers.

Overall, the trend in the activity ratios suggests that PENN Entertainment Inc may be facing challenges in efficiently managing its receivables while improving its payables turnover, potentially impacting its cash flow and liquidity position.

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Long-term

PENN Entertainment Inc's long-term activity ratios indicate the efficiency of the company in utilizing its fixed assets and total assets to generate sales revenue over the last five years.

The fixed asset turnover ratio has shown an improving trend from 2019 to 2023, indicating that PENN has been more effective in generating sales from its fixed assets. The ratio increased from 1.04 in 2019 to 1.81 in 2023, reflecting a better utilization of fixed assets to generate sales. This signifies that PENN has been able to generate more revenue per dollar invested in fixed assets, which is a positive sign of operational efficiency.

On the other hand, the total asset turnover ratio has shown fluctuations over the same period. The ratio fluctuated between 0.24 and 0.40, indicating that PENN has varied efficiency in generating sales from all its assets. The ratio was lowest in 2020 at 0.24, suggesting lower revenue generation compared to the value of total assets. However, it improved in the following years, reaching 0.40 in 2023, indicating that PENN has been more effective in utilizing all its assets to generate sales revenue.

Overall, the increasing trend in fixed asset turnover and the fluctuating trend in total asset turnover suggest that PENN has been improving its efficiency in generating sales from its assets, especially fixed assets. It is important for the company to continue monitoring and managing its assets efficiently to ensure sustainable growth and profitability.