Post Holdings Inc (POST)

Short-term

Turnover ratios

Based on the activity ratios provided for Post Holdings Inc over the past five years, we can analyze the efficiency of the company in managing its inventory, receivables, payables, and working capital.

1. Inventory Turnover:
The inventory turnover ratio indicates how efficiently a company manages its inventory. Post Holdings Inc's inventory turnover has shown variability over the years, ranging from 5.44 to 7.98. A higher ratio signifies that the company is selling its inventory more quickly. The increase in inventory turnover from 2020 to 2022 suggests improved efficiency in managing inventory levels.

2. Receivables Turnover:
The receivables turnover ratio reflects how quickly a company collects its accounts receivable. Post Holdings Inc's receivables turnover has remained relatively stable, with values between 10.67 and 13.64. A higher ratio indicates a faster collection of receivables. The consistency in this ratio suggests that the company has been effective in managing its accounts receivable.

3. Payables Turnover:
The payables turnover ratio demonstrates how efficiently a company pays its suppliers. Post Holdings Inc's payables turnover has shown fluctuations over the years, with values ranging from 8.87 to 13.85. A higher ratio indicates that the company pays its suppliers more quickly. The variability in this ratio implies fluctuations in the company's payment policies.

4. Working Capital Turnover:
The working capital turnover ratio measures how effectively a company utilizes its working capital to generate sales. Post Holdings Inc's working capital turnover has fluctuated significantly, varying from 3.59 to 10.38. A higher ratio signifies that the company is efficiently using its working capital to generate revenue. The increase in this ratio from 2020 to 2023 suggests improved efficiency in generating sales using working capital.

In summary, Post Holdings Inc has demonstrated varying levels of efficiency in managing its inventory, receivables, payables, and working capital over the past five years. The company has shown improvements in inventory turnover and working capital turnover, while maintaining stability in receivables turnover. The fluctuations in payables turnover indicate variations in the company's payment practices. Overall, a comprehensive analysis of these activity ratios can provide insights into the operational effectiveness and financial health of Post Holdings Inc.

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Average number of days

To analyze Post Holdings Inc's activity ratios, we will focus on three key ratios: Days of Inventory on Hand (DOH), Days of Sales Outstanding (DSO), and Number of Days of Payables.

1. Days of Inventory on Hand (DOH):
- The trend in DOH shows a fluctuating pattern over the past five years, with a decrease from 67.08 days in 2020 to 49.00 days in 2024.
- A lower DOH in 2024 compared to previous years indicates that Post Holdings Inc has been managing its inventory more efficiently, holding inventory for a shorter period before it is sold.

2. Days of Sales Outstanding (DSO):
- DSO remained relatively stable over the five-year period, with a slight decrease from 34.21 days in 2020 to 26.85 days in 2024.
- This indicates that the company is collecting its accounts receivable in a timely manner, with a shorter collection period in 2024.

3. Number of Days of Payables:
- The trend in the number of days of payables shows fluctuation, with an increase from 41.17 days in 2020 to 31.43 days in 2024.
- A decrease in the number of days of payables suggests that the company is taking longer to pay its suppliers, which may impact cash flow and supplier relationships.

Overall, the analysis of these activity ratios indicates that Post Holdings Inc has improved its efficiency in managing inventory and collecting receivables. However, the increase in the number of days of payables raises a concern about the company's payment practices and liquidity management. Continuously monitoring and managing these activity ratios will be crucial for maintaining a healthy working capital cycle.

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Long-term

The fixed asset turnover ratio for Post Holdings Inc has been relatively stable over the past five years, ranging from 2.65 to 3.46. This indicates the company's ability to generate sales revenue from its fixed assets, such as property, plant, and equipment. A higher fixed asset turnover suggests that the company is utilizing its fixed assets more efficiently to generate sales.

On the other hand, the total asset turnover ratio has shown a consistent improvement over the same period, increasing from 0.39 to 0.62. This indicates that the company is generating more sales revenue for each dollar of total assets it holds. A higher total asset turnover ratio reflects a higher efficiency in asset utilization and indicates that the company is managing its assets effectively to drive sales growth.

Overall, the trend in both ratios suggests that Post Holdings Inc has been improving its efficiency in generating sales revenue in relation to both its fixed and total assets over the years. This is a positive sign of operational efficiency and effective asset utilization within the company.