Boston Beer Company Inc (SAM)

Short-term

Turnover ratios

The inventory turnover ratio for Boston Beer Company Inc has shown fluctuations over the years, ranging from 4.52 to 9.99. This ratio measures how efficiently the company manages its inventory by indicating the number of times inventory is sold and replaced within a specific period. A higher inventory turnover is generally favorable as it signifies that the company is selling its products quickly, minimizing holding costs and potential obsolescence.

The receivables turnover ratio, reflecting the company's ability to collect outstanding receivables, varied from 12.60 to 31.29. A higher turnover ratio suggests that the company is efficient in collecting payments from customers, reducing the risk of bad debts and improving cash flow.

The payables turnover ratio, ranging from 5.57 to 14.66, indicates how quickly the company pays its suppliers. A higher turnover ratio implies that the company is settling its payables promptly, which can help maintain good relationships with suppliers and potentially take advantage of early payment discounts.

The working capital turnover ratio, fluctuating between 6.55 and 22.80, measures how effectively the company utilizes its working capital to generate revenue. A higher turnover ratio indicates that the company is efficiently using its working capital to support its operations and generate sales.

Overall, analyzing these activity ratios provides insights into Boston Beer Company Inc's operational efficiency and financial performance in managing inventory, receivables, payables, and working capital.

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Average number of days

The activity ratios of Boston Beer Company Inc provide insights into its efficiency in managing inventory, collecting receivables, and paying its suppliers.

1. Days of Inventory on Hand (DOH): This ratio shows the number of days it takes for the company to sell its inventory. Boston Beer's DOH ranged from a high of 80.72 days in June 2021 to a low of 36.55 days in December 2023. A lower DOH indicates faster inventory turnover, which can be positive for liquidity and profitability.

2. Days of Sales Outstanding (DSO): DSO measures how quickly the company collects its accounts receivable. Boston Beer's DSO varied from 11.66 days in December 2022 to 28.96 days in March 2022. A lower DSO is favorable as it signifies quicker cash conversion from sales.

3. Number of Days of Payables: This ratio indicates how long it takes the company to pay its suppliers. Boston Beer's payables days ranged from 24.89 days in December 2021 to 65.55 days in June 2021. A longer payable period can suggest better cash flow management, but it may also signal strained supplier relationships.

Overall, analyzing these activity ratios can help stakeholders assess Boston Beer's operational efficiency, cash flow management, and relationships with customers and suppliers.

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Long-term

The Fixed Asset Turnover ratio for Boston Beer Company Inc has been showing a generally increasing trend from 2.42 in March 2020 to 3.27 in December 2024. This indicates that the company is generating more sales revenue relative to its investment in fixed assets over time.

On the other hand, the Total Asset Turnover ratio has been more volatile, fluctuating between 1.11 and 1.61 during the same period. This metric measures how efficiently the company is using its total assets to generate revenue, and the fluctuating trend suggests varying levels of asset utilization efficiency over the years.

Overall, the increasing trend in Fixed Asset Turnover is a positive indicator of improved efficiency in utilizing fixed assets, while the fluctuating Total Asset Turnover ratio may indicate changing business conditions impacting the company's overall asset utilization efficiency.