Simply Good Foods Co (SMPL)

Short-term

Turnover ratios

Simply Good Foods Co's activity ratios provide insights into how efficiently the company manages its assets and operations.

Inventory turnover has fluctuated over the periods, averaging around 6 to 7 times per year. This indicates that the company is efficiently managing its inventory levels, with a faster turnover generally being favorable as it suggests minimal excess inventory.

Receivables turnover has also varied but generally remained above 8 times per year. This indicates that the company is collecting its receivables in a timely manner, which is a positive sign of effective credit management and liquidity.

Payables turnover has shown some variability as well, but it has consistently been around 14 times per year. A higher payables turnover ratio suggests that Simply Good Foods Co is paying its suppliers relatively quickly, which may help maintain good relationships and potentially take advantage of early payment discounts.

Working capital turnover has fluctuated but generally remained above 4 times per year. This ratio reflects how efficiently the company is using its working capital to generate sales. A higher turnover indicates better utilization of resources.

Overall, Simply Good Foods Co's activity ratios show a generally efficient management of assets and operations over the periods analyzed.

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Average number of days

The Days of Inventory on Hand (DOH) for Simply Good Foods Co have shown some fluctuations over the historical periods, ranging from a low of 37.95 days to a high of 100.91 days. The company has managed to reduce its inventory holding period from the high levels seen in the past. This indicates an improvement in inventory management efficiency, as the company is now able to turn over its inventory more quickly.

The Days of Sales Outstanding (DSO) have also varied, with the lowest being 32.06 days and the highest at 49.91 days. The trend shows some inconsistency in collecting receivables, although the company has managed to keep the DSO within a moderate range. Maintaining a lower DSO is crucial for improving cash flow and liquidity.

The Number of Days of Payables for Simply Good Foods Co ranged from a low of 19.79 days to a high of 38.42 days. The company has been able to effectively manage its payables, with a relatively stable trend over the periods analyzed. Extending the payment period allows the company to better manage its working capital and cash flow.

Overall, based on the activity ratios analyzed, Simply Good Foods Co has shown improvements in inventory management and maintaining a stable level of payables. However, there is room for further optimization in collecting receivables efficiently to enhance cash flow and liquidity.

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Long-term

The fixed asset turnover ratio for Simply Good Foods Co has shown fluctuations over the past few quarters, indicating the efficiency of the company in generating sales from its fixed assets. The ratio has generally been on an upward trend, with some variability in between. This suggests that the company has been able to utilize its fixed assets more effectively to generate revenue.

In contrast, the total asset turnover ratio, which measures the company's ability to generate sales from all assets, has been relatively stable over the same period. The ratio has hovered around 0.55 to 0.58, indicating that Simply Good Foods Co has been able to efficiently utilize both fixed and current assets to generate revenue.

Overall, the company's long-term activity ratios suggest that it has been effectively managing its assets to drive sales growth. The increasing trend in fixed asset turnover and the consistent total asset turnover ratio indicate that Simply Good Foods Co is making efficient use of its assets to generate revenue over time.