Pool Corporation (POOL)

Short-term

Turnover ratios

Pool Corporation's inventory turnover has shown a declining trend over the years, decreasing from 3.59 in 2020 to 2.90 in 2024. This suggests that the company is holding onto its inventory for a longer period before selling it, which may indicate inefficiencies in inventory management or challenges in selling products efficiently.

For receivables turnover, the data is not available for any of the years provided, indicating that there is no information on how quickly the company is collecting payments from customers. This lack of data limits our ability to assess the effectiveness of Pool Corporation's credit and collection policies.

Similarly, payables turnover data is unavailable for all the years, making it difficult to evaluate how quickly the company is paying its suppliers. This ratio is important as it provides insights into the company's payment practices and relationships with creditors.

When looking at the working capital turnover, we see fluctuations in the ratio over the years, with a peak of 6.16 in 2020 and a low of 4.60 in 2022. A higher working capital turnover indicates that the company effectively utilizes its working capital to generate sales. The fluctuation in this ratio may suggest changes in the efficiency of Pool Corporation's working capital management.

Overall, while the interpretation of the inventory turnover and working capital turnover ratios provides some insights into Pool Corporation's operational efficiency, the lack of data for receivables turnover and payables turnover limits a comprehensive analysis of the company's activity ratios.

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Average number of days

Days of Inventory on Hand (DOH) Analysis:
- The Days of Inventory on Hand for Pool Corporation has increased steadily over the past five years, from 101.60 days as of December 31, 2020, to 125.98 days as of December 31, 2024.
- This indicates that the company is taking longer to sell its inventory, which could suggest issues with inventory management, slow-moving inventory, or changes in demand for its products.
- Pool Corporation may need to focus on optimizing its inventory management practices to reduce carrying costs and improve overall efficiency.

Days of Sales Outstanding (DSO) Analysis:
- The data provided does not include information on the Days of Sales Outstanding (DSO) for Pool Corporation for the years 2020 to 2024.
- DSO is a crucial metric that measures how long it takes for a company to collect its accounts receivable. The absence of this data makes it challenging to assess the efficiency of Pool Corporation's accounts receivable management during these years.
- A lower DSO typically indicates faster cash conversion and better liquidity, while a higher DSO may signal potential issues with credit policies or collection processes.

Number of Days of Payables Analysis:
- Similar to DSO, the data does not provide information on the Number of Days of Payables for Pool Corporation for the years 2020 to 2024.
- The Number of Days of Payables measures how long a company takes to pay its suppliers. It is important for managing working capital and cash flow effectively.
- Without this data, it is challenging to evaluate Pool Corporation's ability to manage its payables and utilize cash efficiently within its operations.

In conclusion, while the Days of Inventory on Hand data suggests potential areas for improvement in inventory management, the absence of information on DSO and Payables hinders a comprehensive assessment of Pool Corporation's overall activity ratios and working capital management. Further insights would be needed to provide a more thorough analysis.

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Long-term

1. Fixed Asset Turnover:
- Pool Corporation's fixed asset turnover ratio shows a notable fluctuation over the years, declining from 36.37 in 2020 to 12.59 in 2021, then increasing to 31.90 in 2022.
- The ratio being significantly above 1 indicates that Pool Corporation is efficiently generating sales revenue from its fixed assets.
- The sharp decline in 2021 may suggest a potential decrease in sales generated by the fixed assets or an increase in the book value of fixed assets.
- The subsequent increase in 2022 could suggest improved utilization of fixed assets or increased sales volume.

2. Total Asset Turnover:
- Pool Corporation's total asset turnover ratio shows a decreasing trend from 2.26 in 2020 to 1.58 in 2024.
- This decline indicates that the company is generating less revenue relative to its total assets over the years.
- A total asset turnover ratio below 1 implies that Pool Corporation may have excess assets compared to its sales revenue generation.
- The decreasing trend may indicate inefficiencies in asset utilization or a decrease in sales volume relative to total assets held by the company.

Overall, while Pool Corporation's fixed asset turnover ratio demonstrates significant fluctuations and highlights the efficiency of utilizing fixed assets, the declining trend in the total asset turnover ratio indicates potential inefficiencies in utilizing total assets to generate revenue over the years. Monitoring these ratios can provide insights into the company's operational efficiency and asset management strategies.