Boston Beer Company Inc (SAM)

Short-term

Turnover ratios

Based on the provided data, we can analyze Boston Beer Company Inc's activity ratios as follows:

1. Inventory Turnover:
The inventory turnover ratio measures how efficiently a company manages its inventory by showing how many times a company sold and replaced its inventory during a specific period. Boston Beer's inventory turnover has been improving steadily from 7.04 in 2020 to 9.55 in 2024. This indicates that the company is selling its inventory at a faster rate over the years, which is a positive sign of efficient inventory management.

2. Receivables Turnover:
The receivables turnover ratio reflects how many times a company collects its accounts receivable during a period. Boston Beer's receivables turnover has fluctuated over the years but generally remained stable, ranging from 18.97 to 31.29. A higher receivables turnover ratio suggests that the company is efficient in collecting payments from customers, which is critical for maintaining healthy cash flow.

3. Payables Turnover:
The payables turnover ratio measures how quickly a company pays its suppliers. Boston Beer's payables turnover has shown a decreasing trend from 14.66 in 2021 to 12.82 in 2024. A lower payables turnover ratio may indicate that the company is taking longer to pay its suppliers, which could impact supplier relationships and cash management.

4. Working Capital Turnover:
The working capital turnover ratio measures how efficiently a company utilizes its working capital to generate revenue. Boston Beer's working capital turnover has fluctuated over the years, with a notable peak in 2021 at 22.80. A higher working capital turnover ratio indicates that the company is effectively using its working capital to support business operations and generate sales.

Overall, the analysis of Boston Beer Company Inc's activity ratios shows improvements in inventory turnover and working capital turnover, stable receivables turnover, and a slight decline in payables turnover. These ratios provide insights into the company's operational efficiency, management of assets and liabilities, and the effectiveness of its working capital utilization.

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Average number of days

The activity ratios of Boston Beer Company Inc reveal insights into its operational efficiency and liquidity management over the past five years:

1. Days of Inventory on Hand (DOH):
- The company's DOH decreased from 51.83 days in December 2020 to 38.21 days by December 2024.
- A decreasing trend in DOH indicates that Boston Beer has been able to manage its inventory levels more effectively, possibly through improved inventory management strategies or strong demand forecasting.

2. Days of Sales Outstanding (DSO):
- DSO remained relatively stable over the period, ranging from 18.66 days in December 2020 to 12.35 days in December 2024.
- The consistent DSO suggests that Boston Beer has maintained a steady collection process for its sales, ensuring timely receipt of payments from customers.

3. Number of Days of Payables:
- The number of days of payables saw a significant decline from 48.16 days in December 2020 to 28.46 days by December 2024.
- The reduction in payables days indicates that the company has been settling its payables at a faster rate, which could be a strategic move to maintain good relationships with suppliers or take advantage of potential discounts for early payment.

Overall, the trend in these activity ratios reflects Boston Beer Company's efforts to optimize its inventory levels, manage receivables efficiently, and handle payables effectively, thereby enhancing its operational performance and cash flow management.

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Long-term

The fixed asset turnover ratio measures how efficiently a company utilizes its fixed assets to generate sales. For Boston Beer Company Inc, the ratio has shown a steady improvement from 2.79 in 2020 to 3.27 in 2024. This indicates that the company is becoming more efficient in utilizing its fixed assets to generate revenue over the years.

Total asset turnover ratio reflects how well a company utilizes all its assets to generate sales. Boston Beer Company Inc's total asset turnover has also displayed an upward trend, increasing from 1.26 in 2020 to 1.61 in 2024. This suggests that the company is effectively utilizing all its assets to generate revenue, which is a positive indicator of operational efficiency and profitability.

Overall, both the fixed asset turnover and total asset turnover ratios for Boston Beer Company Inc have shown improvement over the years, signaling increased efficiency in asset utilization and revenue generation. These trends indicate positive financial health and effective management of the company's assets.