Papa John's International Inc (PZZA)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Inventory turnover | 41.95 | 40.93 | 41.36 | 46.86 | 48.54 |
| Receivables turnover | — | — | — | — | — |
| Payables turnover | — | — | — | — | — |
| Working capital turnover | — | — | — | — | 103.39 |
Papa John's International Inc's inventory turnover has been consistently high over the years, indicating efficient management of inventory with a decreasing trend from 48.54 in 2020 to 41.95 in 2024. This suggests that the company is selling its inventory quickly, which is generally a positive sign.
The receivables turnover and payables turnover ratios are not provided for all years, indicating that information on the efficiency of collecting receivables and managing payables is not available for analysis.
The working capital turnover ratio for 2020 is 103.39. This high ratio indicates that Papa John's is effectively using its working capital to generate sales revenue. However, data for the following years is not available, making it difficult to assess the trend in working capital efficiency over time.
Overall, Papa John's seems to be effectively managing its inventory, but further information on receivables turnover, payables turnover, and working capital turnover would provide a more comprehensive analysis of the company's operational efficiency.
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 | 8.70 | 8.92 | 8.82 | 7.79 | 7.52 |
| Days of sales outstanding (DSO) | days | — | — | — | — | — |
| Number of days of payables | days | — | — | — | — | — |
Based on the provided data for Papa John's International Inc, we can analyze the activity ratios as follows:
1. Days of Inventory on Hand (DOH):
- The DOH measures how efficiently a company manages its inventory. A lower number of days indicates better inventory management.
- Papa John's DOH has shown a slight increasing trend from 7.52 days in 2020 to 8.70 days in 2024.
- This increase could suggest potential inefficiencies in managing inventory, such as overstocking or slower turnover.
2. Days of Sales Outstanding (DSO):
- DSO indicates how long it takes for a company to collect revenue after making a sale. Unfortunately, the data provided did not include DSO figures for Papa John's.
- Without DSO data, it is challenging to assess the company's efficiency in collecting receivables from customers.
3. Number of Days of Payables:
- This ratio reflects how long a company takes to pay its suppliers. A longer number of days indicates a longer duration before settling payables.
- The data does not provide specifics on Papa John's days of payables, which prevents us from evaluating the company's payment practices.
Overall, the trend in Papa John's DOH suggests room for improvement in managing inventory efficiently. However, the lack of data on DSO and days of payables limits a comprehensive evaluation of the company's overall activity ratios. Companies may want to monitor and improve all three activity ratios to optimize working capital management and enhance operational efficiency.
Long-term
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Fixed asset turnover | — | — | 8.42 | 4.91 | 9.03 |
| Total asset turnover | 2.32 | 2.44 | 2.43 | 2.34 | 2.08 |
The fixed asset turnover ratio measures how efficiently a company utilizes its fixed assets to generate revenue. In the case of Papa John's International Inc, the trend of the fixed asset turnover ratio over the years shows fluctuations.
In 2020, the fixed asset turnover ratio was 9.03, indicating that for every dollar of fixed assets, the company generated $9.03 in revenue. This high ratio suggests effective utilization of fixed assets to drive sales.
However, by 2021, the fixed asset turnover ratio decreased to 4.91, implying a decline in the efficiency of using fixed assets to generate revenue. This decrease may raise concerns about the company's asset utilization efficiency.
In 2022, the fixed asset turnover ratio improved to 8.42, indicating a better utilization of fixed assets compared to the previous year. This increase suggests that the company may have implemented strategies to enhance the efficiency of utilizing fixed assets.
Unfortunately, data for 2023 and 2024 are not available (represented as "—"), making it challenging to assess the trend further.
It is essential for Papa John's International Inc to consistently monitor and improve its fixed asset turnover ratio to ensure optimal utilization of its fixed assets and drive revenue growth over the long term.
Additionally, the total asset turnover ratio represents how effectively the company uses its total assets to generate revenue. Analyzing Papa John's International Inc's total asset turnover ratio reveals a relatively stable trend over the years.
In 2020, the total asset turnover ratio was 2.08, meaning that for every dollar of total assets, the company generated $2.08 in revenue. The ratio increased to 2.34 in 2021, indicating an improvement in asset utilization efficiency.
Subsequently, in 2022 and 2023, the total asset turnover ratio continued to increase to 2.43 and 2.44, respectively, suggesting continued efficiency in utilizing total assets to drive revenue growth.
However, in 2024, the total asset turnover ratio slightly decreased to 2.32, indicating a potential slowdown in the company's ability to generate revenue from its total assets compared to the previous year.
Overall, analyzing both the fixed asset turnover and total asset turnover ratios provides insights into Papa John's International Inc's efficiency in utilizing its assets to generate revenue, highlighting the importance of maintaining or improving asset utilization efficiency for sustainable business growth.