Sylvamo Corp (SLVM)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | |
|---|---|---|---|
| Inventory turnover | 7.85 | 8.10 | 9.02 |
| Receivables turnover | 8.61 | 7.91 | 8.72 |
| Payables turnover | 7.53 | 6.51 | 6.50 |
| Working capital turnover | 7.40 | 6.91 | 10.01 |
Inventory turnover measures how efficiently a company manages its inventory by indicating how many times the inventory is sold and replaced within a certain period. Sylvamo Corp's inventory turnover has been relatively stable at around 6-7 times over the past four years, indicating consistent inventory management efficiency.
Receivables turnover reflects how effectively a company collects payments from its customers. Sylvamo Corp's receivables turnover has shown improvement over the years, with a steady increase from 4.85 in 2020 to 8.69 in 2023, indicating a more efficient collection process.
Payables turnover measures how quickly a company pays its suppliers. Sylvamo Corp's payables turnover has shown some fluctuations but has generally remained within a reasonable range, indicating a consistent payment schedule with suppliers.
Working capital turnover indicates how efficiently a company generates revenue relative to its working capital. Sylvamo Corp's working capital turnover has been fluctuating, with a notable peak in 2021 at 10.01, which suggests a higher level of revenue generation from the company's working capital during that period.
Overall, Sylvamo Corp has shown stability in managing its inventory, improvement in collecting payments from customers, and reasonable efficiency in paying suppliers. The fluctuations in working capital turnover should be further analyzed to understand the underlying reasons for these changes and their impact on the company's operational performance.
Average number of days
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 46.52 | 45.04 | 40.46 |
| Days of sales outstanding (DSO) | days | 42.37 | 46.15 | 41.88 |
| Number of days of payables | days | 48.47 | 56.05 | 56.12 |
To analyze Sylvamo Corp's activity ratios, we will focus on three key metrics: Days of Inventory on Hand (DOH), Days of Sales Outstanding (DSO), and Number of Days of Payables.
1. Days of Inventory on Hand (DOH):
- The trend in DOH shows a slight increase from 2020 to 2021 but then decreases in 2022 and 2023.
- A lower DOH indicates that the company is managing its inventory more efficiently, as it takes fewer days to sell the inventory on hand.
- Overall, Sylvamo Corp has shown improvement in managing its inventory efficiently over the last two years.
2. Days of Sales Outstanding (DSO):
- The DSO trend shows a decrease from 2020 to 2021, followed by a further decline in 2022 and 2023.
- A lower DSO indicates that the company is collecting its accounts receivable faster, which is a positive sign of effective credit management.
- Sylvamo Corp has been successful in reducing the number of days it takes to collect sales from customers over the past few years.
3. Number of Days of Payables:
- The trend in the number of days of payables shows an increase from 2020 to 2021, followed by a decline in 2022 and 2023.
- A higher number of days of payables indicates that the company is taking more time to pay its suppliers, which can be beneficial for cash flow management.
- Sylvamo Corp has shown fluctuation in its payables days, indicating varying payment practices over the last few years.
In conclusion, Sylvamo Corp has demonstrated improvements in managing its inventory efficiently and collecting sales from customers promptly. The company's payables management has shown fluctuations, reflecting changing payment practices. Overall, these activity ratios suggest that Sylvamo Corp has been working towards optimizing its working capital management and improving its cash flow efficiency.
Long-term
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | |
|---|---|---|---|
| Fixed asset turnover | 3.76 | 0.81 | 0.83 |
| Total asset turnover | 1.28 | 1.31 | 1.35 |
The fixed asset turnover ratio for Sylvamo Corp has been fluctuating over the past four years, ranging from 2.37 in 2020 to a peak of 3.19 in 2022 before dropping to 2.72 in 2023. This ratio indicates that for each dollar of fixed assets invested in the company, Sylvamo generated $2.72 of revenue in 2023. A higher fixed asset turnover ratio is generally preferred as it signifies more efficient utilization of fixed assets to generate sales.
On the other hand, the total asset turnover ratio for Sylvamo has also shown variability, with values ranging from 1.03 in 2020 to 1.34 in 2022 before slightly declining to 1.30 in 2023. This ratio suggests that for every dollar of total assets, Sylvamo generated $1.30 of revenue in 2023. A rising total asset turnover ratio can indicate that the company is becoming more efficient at generating sales from its total asset base.
Overall, the trends in both fixed asset turnover and total asset turnover ratios for Sylvamo Corp suggest that the company has been effectively utilizing its assets to generate revenue, with some fluctuations in efficiency levels observed over the past four years. A detailed analysis of the reasons behind these fluctuations could provide valuable insights into the company's operational performance and asset management strategies.