Skyline Corporation (SKY)

Short-term

Turnover ratios

Skyline Corporation's Inventory turnover has shown a decreasing trend over the past five years, moving from 10.22 in 2020 to 5.84 in 2024. This indicates that the company is taking longer to sell its inventory, which may lead to potential issues related to obsolete or slow-moving inventory.

In terms of Receivables turnover, the company experienced fluctuations but generally maintained a relatively stable performance. The ratio declined in 2021 and 2022 before increasing significantly in 2023, suggesting that the company is collecting its receivables at a faster pace.

The Payables turnover ratio for Skyline Corporation has been irregular over the years, with a sharp increase in 2023. This signifies that the company is taking longer to pay its suppliers, which may indicate either cash flow constraints or strategic management of working capital.

The Working capital turnover ratio has been on a downward trend for Skyline Corporation, declining from 6.43 in 2020 to 3.82 in 2024. This implies that the efficiency of utilizing working capital to generate sales has decreased over time, potentially signaling inefficiencies in managing the company's current assets and liabilities.

Overall, analyzing these activity ratios provides insights into Skyline Corporation's operational efficiency, inventory management, accounts receivable collection, and payment practices, highlighting areas where the company may need to focus on improving its working capital management strategies.

---

Average number of days

Skyline Corporation's activity ratios provide insights into the efficiency of the company's operations.

1. Days of Inventory on Hand (DOH):
- The DOH ratio indicates how many days on average it takes for the company to sell its inventory.
- Skyline Corporation's DOH has fluctuated over the years, ranging from a low of 35.17 days on March 31, 2023, to a high of 62.53 days on March 31, 2024.
- A lower DOH is generally favorable as it suggests faster turnover of inventory and less holding costs.

2. Days of Sales Outstanding (DSO):
- The DSO ratio reflects how quickly the company collects its accounts receivable.
- Skyline Corporation's DSO has varied, with the lowest DSO of 9.44 days on March 31, 2023, and the highest DSO of 15.00 days on March 31, 2022.
- A lower DSO indicates better management of accounts receivable and efficient cash flow.

3. Number of Days of Payables:
- This ratio indicates the number of days it takes for the company to pay its suppliers.
- Skyline Corporation's payables days have shown fluctuations, with the lowest number of days at 7.77 days on March 31, 2023, and the highest at 17.87 days on March 31, 2022.
- A longer payables period may signify favorable cash flow management, but it could also strain supplier relationships if excessively extended.

Overall, an analysis of Skyline Corporation's activity ratios suggests varying efficiency levels in managing inventory, accounts receivable, and payables over the years, reflecting different aspects of the company's operational performance and financial health.

---

Long-term

The fixed asset turnover ratio measures how efficiently a company generates sales from its fixed assets. A higher fixed asset turnover ratio indicates better efficiency in asset utilization. In the case of Skyline Corporation, the fixed asset turnover ratio has fluctuated over the past five years, decreasing from 12.49 in 2020 to 6.94 in 2024. This decline suggests a potential decrease in the company's ability to generate sales from its fixed assets efficiently.

On the other hand, the total asset turnover ratio reflects how well a company utilizes all its assets to generate revenue. A higher total asset turnover ratio signifies better efficiency in generating sales from all assets. In the context of Skyline Corporation, the total asset turnover ratio has also experienced fluctuations, ranging from 1.05 in 2024 to 1.78 in 2022. The decline in the total asset turnover ratio from 2022 to 2024 may indicate challenges in effectively utilizing all assets to generate revenue.

Overall, the analysis of Skyline Corporation's long-term activity ratios reveals varying levels of efficiency in utilizing fixed and total assets to generate sales over the five-year period. It is essential for the company to assess and address the factors contributing to these fluctuations in order to enhance operational efficiency and profitability in the long term.