Rollins Inc (ROL)

Short-term

Turnover ratios

Rollins, Inc.'s activity ratios provide insights into how effectively the company manages its assets and liabilities to generate sales.

Inventory turnover has been consistently high over the past five years, indicating that the company efficiently manages its inventory levels and quickly converts it into sales. This suggests effective inventory management practices.

Receivables turnover has remained relatively stable over the years, indicating that the company efficiently collects on its credit sales. A consistent or slightly increasing trend in receivables turnover is a positive sign, as it shows the company is efficient in collecting payments from customers.

Payables turnover has fluctuated over the years but generally increased from 2019 to 2023. A higher payables turnover implies that the company is paying its suppliers more frequently, which could indicate strong supplier relationships or efficient working capital management.

The data provided does not include information on the Working Capital Turnover ratio for Rollins, Inc., which makes it challenging to assess how efficiently the company is utilizing its working capital to generate sales. This ratio would have provided insights into how effectively the company is managing its current assets and liabilities to support its operations.

Overall, the high inventory turnover, stable receivables turnover, and improving payables turnover reflect effective management of operating assets and liabilities by Rollins, Inc., contributing to its operational efficiency and financial performance.

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Average number of days

Activity ratios provide insight into how efficiently a company manages its operations and resources. Let's analyze Rollins, Inc.'s activity ratios over the past five years.

1. Days of Inventory on Hand (DOH): The trend in the Days of Inventory on Hand shows a fluctuating pattern over the years. In 2023, the DOH decreased slightly to 8.29 days compared to 8.30 days in 2022. This indicates that Rollins, Inc. has been able to manage its inventory more efficiently in the latest year. However, the DOH was higher in 2021 and 2020, suggesting slower inventory turnover during those years. The lowest DOH was recorded in 2019 at 7.15 days, indicating better inventory management efficiency.

2. Days of Sales Outstanding (DSO): The Days of Sales Outstanding remained relatively consistent over the past five years, with a slight decrease to 25.56 days in 2023 compared to 25.64 days in 2022. This implies that Rollins, Inc. typically collects receivables within approximately 25 days. Consistency in DSO indicates stability in the company's accounts receivable management practices.

3. Number of Days of Payables: The trend in the Number of Days of Payables indicates some variability in the company's payment cycle. In 2023, the Days of Payables increased to 12.22 days compared to 11.94 days in the previous year, suggesting a slightly longer period before Rollins, Inc. pays its suppliers. Notably, there was a significant increase in 2020, indicating a delay in payments that year, which was not consistent with the typical payment cycle observed in other years.

Overall, Rollins, Inc. has shown varying levels of efficiency in managing its inventory, receivables, and payables over the past five years. The company has generally maintained stable collection practices, while experiencing fluctuations in inventory turnover and payment cycles. Further analysis may be needed to understand the factors driving these changes and to identify potential areas for improvement in operational efficiency.

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Long-term

The long-term activity ratios of Rollins, Inc., as indicated by the fixed asset turnover and total asset turnover, provide insights into the company's efficiency in generating sales relative to its asset base.

1. Fixed Asset Turnover:
- The fixed asset turnover ratio has been steadily increasing over the years, indicating that Rollins, Inc. is generating more revenues for each dollar invested in fixed assets.
- In 2023, the fixed asset turnover ratio reached 24.26, signifying a significant improvement in the company's ability to utilize its fixed assets efficiently to drive sales.
- This trend suggests that Rollins, Inc. has been effectively managing its long-term assets to generate higher sales volumes and improve operational efficiency.

2. Total Asset Turnover:
- The total asset turnover ratio represents the efficiency of the company in utilizing all its assets to generate sales.
- Although there have been fluctuations in the total asset turnover ratio over the years, it has generally remained relatively stable around the range of 1.16 to 1.27.
- In 2023, the total asset turnover ratio decreased to 1.18, indicating a slight decline in the company's overall efficiency in generating sales from its total asset base.
- Despite the slight dip, Rollins, Inc. continues to effectively utilize its assets to generate revenue, albeit at a slightly lower rate compared to the previous year.

Overall, the analysis of Rollins, Inc.'s long-term activity ratios suggests that the company has shown significant improvements in leveraging its fixed assets efficiently to drive higher sales. While the total asset turnover ratio fluctuated, the company has maintained a reasonable level of efficiency in utilizing all its assets to generate revenues.