Rollins Inc (ROL)

Short-term

Turnover ratios

Rollins Inc's activity ratios provide insights into how efficiently the company manages its resources in terms of inventory, receivables, payables, and working capital turnover.

1. Inventory Turnover:
- The inventory turnover ratio measures how many times a company's inventory is sold and replaced over a period.
- Rollins Inc's inventory turnover has been increasing steadily from 68.83 in 2020 to 71.87 in 2021, 77.15 in 2022, 77.43 in 2023, and then decreasing slightly to 71.97 in 2024.
- The higher turnover indicates that Rollins Inc is selling its inventory more frequently, which can be a positive sign of efficient inventory management.

2. Receivables Turnover:
- The receivables turnover ratio reflects how efficiently a company is collecting on its credit sales.
- Rollins Inc's receivables turnover decreased significantly from 107.60 in 2020 to 14.62 in 2021, and then remained relatively stable around 14.22 to 14.34 from 2022 to 2024.
- The sharp decline in receivables turnover in 2021 could indicate potential issues with credit collection efficiency which may need to be addressed.

3. Payables Turnover:
- The payables turnover ratio shows how efficiently a company pays its suppliers.
- Rollins Inc's payables turnover has been consistently increasing from 32.86 in 2020 to 57.33 in 2024.
- A higher payables turnover suggests that Rollins Inc is managing its payables more effectively, potentially negotiating better credit terms with its suppliers.

4. Working Capital Turnover:
- The working capital turnover ratio indicates how effectively a company is using its working capital to generate sales revenue.
- Data for Rollins Inc's working capital turnover is unavailable for the years reviewed (marked as "—").
- Without this information, it is challenging to assess how efficiently Rollins Inc is utilizing its working capital to support its sales operations.

In conclusion, while Rollins Inc demonstrates efficient management of its inventory and payables, there may be room for improvement in credit collection practices based on the declining receivables turnover ratio. Additionally, further information on working capital turnover would provide a more comprehensive picture of the company's overall operational efficiency.

---

Average number of days

Rollins Inc's activity ratios reflect its efficiency in managing inventory, collecting receivables, and paying its payables.

Firstly, the days of inventory on hand (DOH) decreased from 5.30 days in December 2020 to 4.71 days in December 2023, indicating faster turnover of inventory. However, there was a slight increase to 5.07 days by December 2024.

Secondly, the days of sales outstanding (DSO) increased from 3.39 days in December 2020 to around 25 days in the following years, indicating slower collections from customers. This longer collection period may affect cash flow and liquidity.

Lastly, the number of days of payables decreased from 11.11 days in December 2020 to 6.37 days by December 2024. A decreasing trend in payables days suggests that the company is paying its suppliers more quickly, which could impact its cash conversion cycle.

Overall, while Rollins Inc has managed to reduce its inventory holding period and payables days, it needs to address the increasing collection period for receivables to enhance its overall efficiency and cash flow management.

---

Long-term

The fixed asset turnover ratio of Rollins Inc has shown a positive trend over the five-year period, increasing from 12.14 in 2020 to 27.14 in 2024. This indicates that the company has been able to generate more revenue relative to its investment in fixed assets, reflecting improved efficiency in utilizing these assets for sales generation.

On the other hand, the total asset turnover ratio has been less consistent, fluctuating between 1.17 and 1.27 during the period. This ratio measures the company's ability to generate sales from its total assets, including both fixed and current assets. The fluctuation in this ratio suggests varying levels of effectiveness in utilizing all assets to generate revenue.

Overall, the upward trend in fixed asset turnover indicates increasing efficiency in utilizing fixed assets, while the fluctuation in total asset turnover suggests potential challenges or changes in the company's overall asset utilization for revenue generation over the years.