Simply Good Foods Co (SMPL)

Short-term

Turnover ratios

Inventory turnover measures how efficiently a company manages its inventory levels. Simply Good Foods Co's inventory turnover has been relatively consistent over the past five years, ranging from 5.76 to 8.33 times. This indicates that the company is able to sell and replace its inventory multiple times within a given period, with a peak in turnover in 2020.

Receivables turnover reflects how quickly the company collects its accounts receivable. Simply Good Foods Co's receivables turnover has also remained stable, ranging from 8.57 to 9.10 times over the same period. This suggests that the company has been effective in collecting payments owed by customers.

Payables turnover measures how quickly the company pays its suppliers. Simply Good Foods Co's payables turnover has shown variation, with a peak in 2019 and a dip in 2022. This may indicate changes in payment terms or supplier relationships. Overall, the company has been able to manage its payables effectively, with turnover ratios ranging from 9.98 to 15.27 times.

Working capital turnover assesses how efficiently a company utilizes its working capital to generate sales. Simply Good Foods Co's working capital turnover has fluctuated over the past five years, with a peak in 2021. A higher turnover ratio indicates better utilization of working capital to drive sales revenue.

In summary, Simply Good Foods Co has shown consistency in managing its inventory and collecting receivables efficiently. While payables turnover has fluctuated, the company has generally maintained effective relationships with its suppliers. The working capital turnover indicates fluctuations in how efficiently the company utilizes its capital to generate sales.

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Average number of days

Days of inventory on hand (DOH) measures how many days, on average, the company holds its inventory before selling it. Simply Good Foods Co's inventory turnover has been relatively stable over the years, ranging from 43.81 days in 2020 to 63.34 days in 2022. A higher DOH indicates slower inventory turnover, which could tie up cash and increase holding costs.

Days of sales outstanding (DSO) indicates how many days it takes for the company to collect payment after making a sale. Simply Good Foods Co's DSO has varied slightly, with the range from 40.11 days in 2020 to 42.61 days in 2023. A higher DSO suggests slower collections and potential cash flow issues.

Number of days of payables signifies the average number of days the company takes to pay its suppliers. Simply Good Foods Co's payables period has fluctuated over the years, from 23.90 days in 2020 to 36.58 days in 2021. A longer payables period may indicate better liquidity management as the company holds onto cash longer.

Overall, Simply Good Foods Co has managed its activity ratios reasonably well, with inventory turnover being relatively stable, DSO showing minor fluctuations, and payables period varying but generally in line with industry norms. Further analysis and comparison with industry benchmarks can provide better insights into the company's efficiency in managing working capital.

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Long-term

The long-term activity ratios of Simply Good Foods Co over the past five years show the company's efficiency in utilizing its fixed assets and total assets to generate sales revenue.

The fixed asset turnover ratio has exhibited a fluctuating trend, ranging from 49.98 to 68.91, with an average of approximately 59.10. This indicates that the company has been successful in generating sales revenue relative to its investment in fixed assets. A higher fixed asset turnover ratio suggests that Simply Good Foods Co is efficient in its utilization of fixed assets to drive sales.

On the other hand, the total asset turnover ratio has shown a less volatile pattern, ranging from 0.41 to 0.59, with an average of approximately 0.52. This indicates that the company is generating sales revenue relative to its total assets. A higher total asset turnover ratio implies that Simply Good Foods Co is efficient in generating revenue from all its assets, both fixed and current.

Overall, the fluctuating but generally solid performance in both fixed asset turnover and total asset turnover ratios suggests that Simply Good Foods Co has been effectively managing its assets to drive sales growth over the past five years. It is important for the company to continue monitoring and improving these ratios to ensure long-term financial success.