Rollins Inc (ROL)

Short-term

Turnover ratios

Rollins, Inc.'s activity ratios provide insight into how efficiently the company manages its assets and liabilities to generate revenue.

1. Inventory Turnover: Rollins, Inc. consistently maintains a high inventory turnover ratio, which indicates that the company effectively sells and replenishes its inventory. The increasing trend from Q2 2022 to Q4 2023 suggests improved efficiency in managing inventory.

2. Receivables Turnover: The receivables turnover ratio measures how quickly the company collects on its credit sales. Rollins, Inc. demonstrates a relatively stable performance in collecting receivables, with Q1 2022 showing the highest turnover. This could indicate effective credit management practices.

3. Payables Turnover: The payables turnover ratio reflects how efficiently the company pays its suppliers. Rollins, Inc. shows fluctuations in payables turnover over the quarters, with Q3 2023 registering the lowest turnover. This variance may signify changes in payment terms or supplier relationships.

4. Working Capital Turnover: The working capital turnover ratio indicates how efficiently the company utilizes its working capital to generate sales. The extremely high value in Q1 2022 suggests a significant amount of revenue generated relative to the working capital employed, which could be driven by seasonal factors or specific business strategies.

Overall, reviewing these activity ratios provides a comprehensive view of Rollins, Inc.'s management of inventory, receivables, payables, and working capital in its operations.

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Average number of days

To analyze Rollins, Inc.'s activity ratios, we will focus on days of inventory on hand (DOH), days of sales outstanding (DSO), and number of days of payables.

1. Days of Inventory on Hand (DOH): Rollins, Inc. exhibited relatively stable inventory management over the past eight quarters, with DOH ranging between 8.16 days and 8.87 days. This indicates that the company efficiently manages its inventory levels, aiming to balance the need for maintaining sufficient inventory to meet demand while minimizing holding costs.

2. Days of Sales Outstanding (DSO): The trend in DSO for Rollins, Inc. shows some variability quarter to quarter, fluctuating between 24.18 days and 28.98 days. Lower DSO values reflect a shorter time frame for the company to collect its accounts receivable, indicating effective credit management and a timely conversion of sales into cash.

3. Number of Days of Payables: Rollins, Inc. has also shown consistency in managing its payables, with the number of days of payables ranging from 10.64 days to 19.57 days over the analyzed periods. A longer repayment period can provide the company with additional working capital and potential liquidity benefits.

In conclusion, based on the activity ratios analyzed, Rollins, Inc. demonstrates effective management of its inventory, accounts receivable, and accounts payable, showcasing a balanced approach in its operating cycle. The stability and efficiency in these ratios suggest that the company is effectively managing its working capital and optimizing cash flow.

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Long-term

Long-term activity ratios provide insights into how effectively a company is utilizing its assets to generate sales over an extended period.

Fixed Asset Turnover:
- The fixed asset turnover ratio for Rollins, Inc. has been steadily increasing from Q1 2022 to Q4 2023.
- This indicates that the company is generating more sales per dollar of fixed assets invested, demonstrating improved efficiency in utilizing its long-term assets to generate revenue.
- The upward trend suggests that Rollins, Inc. has been effectively managing and utilizing its fixed assets over time.

Total Asset Turnover:
- The total asset turnover ratio fluctuated over the quarters, but generally remained above 1, indicating that Rollins, Inc. is generating more revenue relative to its total assets.
- The Q1 2023 figure stands out as an outlier compared to the trend, possibly indicative of a particular event or seasonality affecting asset utilization during that period.
- Despite some fluctuations, the overall trend in total asset turnover for Rollins, Inc. suggests a generally efficient utilization of total assets to generate revenue.

In summary, Rollins, Inc. has shown consistent improvement in its fixed asset turnover and generally maintained an efficient utilization of total assets to generate revenue over the quarters analyzed. This indicates effective management of long-term assets and a strong ability to generate sales in relation to its asset base.