Skyline Corporation (SKY)

Short-term

Turnover ratios

Activity ratios provide insight into how efficiently a company manages its operations and resources. Let's analyze the activity ratios of Skyline Corporation based on the provided data:

1. Inventory Turnover:
- Skyline Corporation's inventory turnover has fluctuated over the years, from 6.82 in 2021 to 4.83 in 2024, and then increasing significantly to 8.84 in 2023. A higher inventory turnover ratio indicates that the company is selling its inventory more quickly, which could be a positive sign. However, the significant decline in 2024 may raise concerns about potential inventory management issues.

2. Receivables Turnover:
- The receivables turnover ratio shows how efficiently Skyline collects its accounts receivable. The trend shows an improvement from 24.72 in 2021 to 38.73 in 2023 before decreasing to 31.33 in 2024. A higher turnover indicates efficient collection of credit sales, reflecting positively on cash flow management.

3. Payables Turnover:
- The payables turnover ratio measures how efficiently the company pays its suppliers. Skyline's payables turnover ratio has shown variability, from 19.81 in 2021 to 40.00 in 2023, suggesting that the company is managing its payables effectively. However, a sudden increase in 2023 could indicate a change in payment terms or supplier relationships.

4. Working Capital Turnover:
- The working capital turnover ratio signifies how efficiently Skyline utilizes its working capital to generate revenue. The decreasing trend from 6.02 in 2021 to 3.83 in 2024 indicates a potential decline in revenue generation per unit of working capital. A higher ratio is generally preferable as it indicates better utilization of resources.

In conclusion, while Skyline Corporation demonstrates varying levels of efficiency in managing its inventory, receivables, payables, and working capital over the years, it is crucial for the company to maintain consistency and strive for improvement in these activity ratios to enhance operational performance and financial health.

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Average number of days

To analyze Skyline Corporation's activity ratios, we will look at its Days of Inventory on Hand (DOH), Days of Sales Outstanding (DSO), and Number of Days of Payables.

1. Days of Inventory on Hand (DOH):
- March 31, 2021: 53.50 days
- March 31, 2022: 54.44 days
- March 31, 2023: 41.29 days
- March 31, 2024: 75.59 days
- March 31, 2025: Not provided

The DOH indicates the average number of days it takes for the company to convert its inventory into sales. A lower DOH is generally preferable as it signifies efficient inventory management. Skyline Corporation's DOH has fluctuated over the years, with a significant decrease in 2023 compared to the previous years, indicating improved inventory turnover efficiency.

2. Days of Sales Outstanding (DSO):
- March 31, 2021: 14.77 days
- March 31, 2022: 14.97 days
- March 31, 2023: 9.42 days
- March 31, 2024: 11.65 days
- March 31, 2025: Not provided

The DSO measures the average number of days it takes for the company to collect its accounts receivable. A lower DSO suggests effective credit management and faster collection of receivables. Skyline Corporation's DSO has shown improvement over the years, with a notable decrease in 2023, indicating a more efficient collection process.

3. Number of Days of Payables:
- March 31, 2021: 18.43 days
- March 31, 2022: 20.79 days
- March 31, 2023: 9.13 days
- March 31, 2024: 12.05 days
- March 31, 2025: Not provided

The Number of Days of Payables reflects the average number of days it takes for the company to pay its suppliers. A higher number of days may indicate that the company is taking longer to settle its payables. Skyline Corporation's payables period has varied, with a significant decrease in 2023 compared to the previous years, suggesting faster payment to suppliers.

Overall, based on the activity ratios analyzed, Skyline Corporation has shown improvements in its inventory turnover, accounts receivable collection, and payment to suppliers over the years, indicating effective management of its working capital and operational efficiency.

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Long-term

The Fixed Asset Turnover ratio for Skyline Corporation has shown a positive trend from 11.22 in 2021 to 16.60 in 2022, indicating an improvement in the efficiency of utilizing fixed assets to generate sales. However, there was a slight decrease to 14.72 in 2023. It's concerning that the data is unavailable for 2024 and 2025, as this limits the ability to assess the company's performance in these years.

On the other hand, the Total Asset Turnover ratio has also shown a positive trend from 1.55 in 2021 to 1.79 in 2022, and then a slight decrease to 1.67 in 2023. However, there was a significant drop to 1.05 in 2024, which could imply a decrease in overall efficiency in utilizing all assets to generate revenue.

Overall, the trend in both ratios suggests that Skyline Corporation has been relatively effective in generating sales from its fixed and total assets, though the fluctuation in the Total Asset Turnover ratio warrants further investigation to understand the underlying factors contributing to the changes in efficiency over time.