Packaging Corp of America (PKG)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Inventory turnover | 5.87 | 6.02 | 6.54 | 6.49 | 6.71 |
| Receivables turnover | — | — | — | — | — |
| Payables turnover | — | — | — | — | — |
| Working capital turnover | 3.76 | 3.92 | 5.19 | 4.18 | 3.38 |
Based on the provided data, we can analyze the activity ratios of Packaging Corp of America as follows:
1. Inventory Turnover:
- The inventory turnover ratio measures how efficiently a company manages its inventory. Packaging Corp of America's inventory turnover has been decreasing over the years, from 6.71 in 2020 to 5.87 in 2024. This indicates that the company is selling its inventory at a slightly slower pace over the years.
2. Receivables Turnover:
- The receivables turnover ratio evaluates how efficiently a company collects its accounts receivable. In this case, the data indicates that the receivables turnover figures are missing for all the years provided, suggesting that specific information on this ratio is not available for analysis.
3. Payables Turnover:
- The payables turnover ratio assesses how effectively a company is managing its accounts payable. Similar to receivables turnover, the payables turnover data is not provided, making it challenging to analyze how effectively Packaging Corp of America is managing its payables.
4. Working Capital Turnover:
- The working capital turnover ratio evaluates how efficiently a company utilizes its working capital to generate sales. Packaging Corp of America's working capital turnover has fluctuated over the years, with the highest being 5.19 in 2022 and the lowest being 3.76 in 2024. This suggests that the company's ability to generate sales using its working capital has varied during the period.
In conclusion, based on the available data, we can see a mixed performance in the activity ratios of Packaging Corp of America. The inventory turnover has shown a declining trend, while the working capital turnover has fluctuated over the years. However, without data on receivables and payables turnover, a comprehensive assessment of the company's overall efficiency in managing its assets and liabilities is limited.
Average number of days
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 62.21 | 60.59 | 55.85 | 56.24 | 54.38 |
| Days of sales outstanding (DSO) | days | — | — | — | — | — |
| Number of days of payables | days | — | — | — | — | — |
Packaging Corp of America's activity ratios reflect how efficiently the company manages its resources. The Days of Inventory on Hand (DOH) increased from 54.38 days in 2020 to 62.21 days in 2024, indicating that the company is holding inventory for a longer period. This could suggest either issues with production efficiency or changing demand patterns.
The Days of Sales Outstanding (DSO) and Number of Days of Payables data are not available, indicating that we don't have information on the average time it takes for the company to collect receivables or pay its suppliers. Without this data, it is challenging to assess the company's effectiveness in managing its receivables and payables turnover.
In conclusion, while the increase in Days of Inventory on Hand may raise some concerns about inventory management, a comprehensive analysis incorporating accounts receivable and payables turnover ratios would provide a more complete picture of Packaging Corp of America's overall efficiency in managing its working capital.
Long-term
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Fixed asset turnover | — | — | 2.02 | 2.19 | 2.08 |
| Total asset turnover | 0.95 | 0.90 | 1.06 | 0.99 | 0.90 |
To analyze Packaging Corp of America's long-term activity ratios, we can focus on two key metrics: fixed asset turnover and total asset turnover.
1. Fixed Asset Turnover:
- The fixed asset turnover ratio shows how efficiently the company is utilizing its fixed assets to generate revenue.
- In 2020, the fixed asset turnover ratio was 2.08, indicating that for each dollar invested in fixed assets, the company generated $2.08 in sales.
- The ratio improved to 2.19 in 2021, suggesting an increase in the efficiency of asset utilization.
- However, there was a slight decline in 2022, with the ratio falling to 2.02. This may signal a decrease in the productivity of fixed assets in generating revenue.
- Notably, data for 2023 and 2024 are unavailable, making it difficult to assess the trend beyond 2022.
2. Total Asset Turnover:
- The total asset turnover ratio measures how effectively the company is using all its assets to generate revenue.
- In 2020, the total asset turnover ratio was 0.90, indicating that each dollar of assets generated $0.90 in sales.
- The ratio improved to 0.99 in 2021 and further increased to 1.06 in 2022. These improvements suggest better efficiency in utilizing all assets to drive revenue.
- However, there was a slight decline in 2023, with the ratio returning to 0.90. This could signal a potential decrease in the overall efficiency of asset utilization for revenue generation.
- In 2024, the total asset turnover ratio was 0.95, showing a slight improvement compared to 2023.
In conclusion, while Packaging Corp of America showed mixed performance in its long-term activity ratios over the years analyzed, there were overall improvements in asset turnover efficiency, particularly in total asset turnover. However, fluctuations in these ratios in certain years may warrant further investigation into the company's operational efficiency and asset management strategies.