Pool Corporation (POOL)

Short-term

Turnover ratios

Inventory turnover measures how efficiently a company manages its inventory by calculating how many times inventory is sold and replaced within a given period. Pool Corporation's inventory turnover has been relatively consistent over the past five years, averaging around 2.8 times per year. This suggests that the company is effectively managing its inventory levels.

Receivables turnover reflects how quickly a company collects cash from its credit sales. Pool Corporation's receivables turnover has shown a fluctuating trend, with a peak in 2022 at 17.58 times and a slight decline to 16.16 times in 2023. Overall, the company collects cash from credit sales quite swiftly.

Payables turnover indicates how fast a company pays its suppliers. Pool Corporation's payables turnover has been decreasing over the last three years, indicating that the company is taking longer to pay its suppliers. However, the ratio remains relatively stable, suggesting that the company has a consistent approach to managing its payables.

Working capital turnover measures how effectively a company utilizes its working capital to generate sales. Pool Corporation's working capital turnover has experienced fluctuations but has generally remained above 4.5 times per year over the past five years. This indicates that the company efficiently converts its working capital into sales.

In summary, Pool Corporation demonstrates efficient management of its inventory and working capital, collects cash from credit sales swiftly, but has been slightly delaying payments to suppliers in recent years. These activity ratios collectively suggest solid operational performance and effective utilization of resources.

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Average number of days

Days of inventory on hand (DOH) measures how efficiently a company manages its inventory by indicating the number of days it takes to sell its average inventory. Pool Corporation has shown fluctuations in its inventory management over the past five years, with a peak of 136.76 days in 2022 and a low of 101.60 days in 2020. In 2023, the DOH decreased to 128.40 days, showing a slight improvement compared to the previous year.

Days of sales outstanding (DSO) reflects the average number of days it takes for a company to collect revenue after a sale is made. Pool Corporation's DSO has been relatively stable over the past five years, ranging between 20.76 days and 26.81 days. In 2023, the DSO increased slightly to 22.59 days compared to 20.76 days in 2022.

The number of days of payables measures how long a company takes to pay its suppliers. Pool Corporation has shown variability in its payment practices, with the number of days of payables ranging from 34.96 days to 47.83 days over the past five years. In 2023, the company extended its payment period to 47.83 days, indicating a slower payment cycle compared to the previous year.

Overall, Pool Corporation's activity ratios suggest that the company has made improvements in managing its inventory but experienced a slight increase in the collection period for its sales and an elongation of payment terms to suppliers in 2023. Monitoring and optimizing these activity ratios are crucial for the company to maintain efficient operations and cash flow management.

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Long-term

The fixed asset turnover ratio measures how efficiently a company is utilizing its fixed assets to generate revenue. Pool Corporation's fixed asset turnover has fluctuated over the past five years, ranging from as low as 24.75 in 2023 to as high as 36.37 in 2020. This indicates that the company's ability to generate revenue from its fixed assets has varied over time.

On the other hand, the total asset turnover ratio reflects how well the company is using all of its assets to generate sales. Pool Corporation's total asset turnover ratio has also shown variability, with values ranging from 1.62 in 2023 to 2.26 in 2020. A higher total asset turnover ratio generally suggests more efficient use of assets to generate revenue.

Overall, the fluctuating trends in both fixed asset turnover and total asset turnover ratios indicate that Pool Corporation's efficiency in utilizing its assets to generate sales has not been consistent over the past five years. Further analysis and comparison with industry benchmarks may provide additional insights into the company's long-term activity performance.