Pilgrims Pride Corp (PPC)

Short-term

Turnover ratios

Based on the provided data, let's analyze Pilgrims Pride Corp's activity ratios:

1. Inventory Turnover:
- The inventory turnover ratio shows how efficiently the company manages its inventory. Pilgrims Pride Corp's inventory turnover has shown a consistent range between 8.17 and 9.35 over the past few years.
- An increasing trend in inventory turnover indicates that the company is selling its inventory more frequently, which is positive as it minimizes the risk of obsolescence.

2. Receivables Turnover:
- The receivables turnover ratio measures how effectively the company collects its accounts receivable. Pilgrims Pride Corp's receivables turnover has ranged between 13.92 and 17.77 over the period analyzed.
- A higher receivables turnover ratio suggests that the company is efficient in collecting payments from its customers, which is favorable for its liquidity position.

3. Payables Turnover:
- The payables turnover ratio indicates how quickly the company pays its suppliers. Pilgrims Pride Corp's payables turnover has ranged from 10.26 to 13.81 during the analyzed period.
- A higher payables turnover ratio may suggest that the company is managing its payables efficiently, but it could indicate a shorter time frame for paying suppliers.

4. Working Capital Turnover:
- The working capital turnover ratio shows how effectively the company utilizes its working capital to generate sales. Pilgrims Pride Corp's working capital turnover has varied between 6.95 and 16.02.
- A higher working capital turnover ratio indicates that the company efficiently utilizes its working capital to generate revenue, which is a positive sign of operational efficiency.

In conclusion, Pilgrims Pride Corp has shown relatively stable and efficient activity ratios over the analyzed period, indicating effective management of inventory, receivables, payables, and working capital. It is crucial for the company to maintain these levels to ensure optimal operational performance and financial health.

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Average number of days

Activity ratios provide insights into how efficiently a company manages its assets and operations. Let's analyze the activity ratios of Pilgrims Pride Corp based on the provided data:

1. Days of Inventory on Hand (DOH):
- The average DOH for Pilgrims Pride Corp ranged from around 39 to 45 days over the past few years.
- A decreasing trend in DOH from 2022 to 2024 may indicate more efficient inventory management.
- However, the DOH has been relatively stable around 40-45 days, suggesting the company could potentially optimize its inventory levels further.

2. Days of Sales Outstanding (DSO):
- The DSO for Pilgrims Pride Corp varied between 20 to 26 days during the same period.
- There was a slight increase in DSO in 2022, followed by a decline in 2023 and 2024, indicating fluctuations in the collection of receivables.
- Lower DSO values generally indicate faster collection of receivables, which may improve the company's cash flow and liquidity.

3. Number of Days of Payables:
- The number of days of payables ranged from approximately 26 to 36 days for Pilgrims Pride Corp.
- There was an increasing trend in payables days from 2020 to 2023, followed by a decrease in 2024.
- A longer payable period could imply better cash management, but it may also indicate strained relationships with suppliers.

Overall, analyzing these activity ratios together can provide a holistic view of how efficiently Pilgrims Pride Corp is managing its inventory, sales, and payables. The company may consider further optimizing its inventory levels, enhancing its receivables collection process, and maintaining a balanced approach to managing payables to improve its operational efficiency and financial performance.

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Long-term

The Fixed Asset Turnover ratio for Pilgrims Pride Corp has shown a generally increasing trend over the past four years, starting at 4.56 in March 2020 and reaching 5.69 in December 2024. This indicates that the company is generating more revenue from its fixed assets over time, which is a positive sign of efficient asset utilization.

On the other hand, the Total Asset Turnover ratio has displayed some fluctuations during the same period, with a peak of 1.90 in September 2022 and a low of 1.56 in September 2021. Despite the fluctuations, the ratio has generally shown an upward trend, indicating that the company is becoming more effective at generating sales from its total assets.

Overall, the increasing Fixed Asset Turnover ratio and the general upward trend in Total Asset Turnover ratio suggest that Pilgrims Pride Corp is effectively utilizing its assets to generate revenue and improve operational efficiency over the long term.