Sun Country Airlines Holdings Inc (SNCY)

Short-term

Turnover ratios

Sun Country Airlines Holdings Inc's activity ratios provide insights into how efficiently the company manages its assets and liabilities to generate revenue.

1. Inventory Turnover:
- The inventory turnover ratio indicates how many times a company sells and replaces its inventory within a period. Sun Country Airlines Holdings Inc's inventory turnover has shown a generally increasing trend from 2021 to 2023, indicating that the company is managing its inventory more efficiently. However, there was a slight decrease in 2024 to 66.23, which could suggest inventory management challenges that need attention.

2. Receivables Turnover:
- The receivables turnover ratio represents how efficiently the company collects payments from its customers. Sun Country Airlines Holdings Inc has shown a consistent improvement in its receivables turnover from 19.79 in 2021 to 30.93 in 2024. This indicates that the company is collecting payments from customers at a faster pace over the years, which is a positive sign of effective credit management.

3. Payables Turnover:
- The payables turnover ratio measures how quickly a company pays its suppliers. Sun Country Airlines Holdings Inc has seen a gradual increase in its payables turnover from 10.30 in 2021 to 12.37 in 2024. This suggests that the company is managing its payables more efficiently, possibly negotiating better terms with suppliers or optimizing its payment processes.

4. Working Capital Turnover:
- The working capital turnover ratio shows how effectively a company utilizes its working capital to generate revenue. Sun Country Airlines Holdings Inc's working capital turnover was reported only for 2021 at 6.36. The absence of data for the following years implies a limitation in assessing the company's working capital efficiency in subsequent periods.

In conclusion, Sun Country Airlines Holdings Inc has shown improvements in its inventory turnover, receivables turnover, and payables turnover ratios over the years, indicating enhanced efficiency in managing its assets and liabilities. Monitoring these activity ratios can help stakeholders evaluate the company's operational performance and financial health.

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Average number of days

Sun Country Airlines Holdings Inc's activity ratios provide insights into how efficiently the company manages its working capital and operating cycle.

1. Days of Inventory on Hand (DOH):
- The company held inventory for an average of 4.77 days over the four-year period.
- A decrease in DOH from 2021 to 2023 indicates a more efficient inventory management approach.
- However, an increase in DOH in 2024 to 5.51 days may suggest a buildup of excess inventory compared to the previous year.

2. Days of Sales Outstanding (DSO):
- Customers took, on average, 14.74 days to pay the company for goods or services.
- A consistent decline in DSO from 2021 to 2024 highlights improved collection efficiency and quicker cash conversion from sales.
- The reduction in DSO reflects a positive trend that may indicate stronger customer relationships and effective credit management practices.

3. Number of Days of Payables:
- The company took an average of 33.47 days to pay its suppliers over the period.
- A decline in the number of days of payables from 2021 to 2024 signifies a shorter time the company takes to settle its payables.
- The decreasing trend in payables days reflects a potential improvement in negotiation terms with suppliers or more efficient cash flow management.

Overall, the analysis of Sun Country Airlines Holdings Inc's activity ratios suggests an improvement in efficiency in managing inventory, collecting receivables, and settling payables over the four-year period. The company has shown progress in optimizing its working capital management, which is essential for maintaining a healthy cash flow and sustainable operations.

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Long-term

The long-term activity ratios for Sun Country Airlines Holdings Inc provide insights into how efficiently the company is utilizing its assets to generate revenue.

1. Fixed Asset Turnover:
- The fixed asset turnover ratio measures how effectively the company is generating revenue from its fixed assets.
- From the data provided, we observe an increasing trend in the fixed asset turnover ratio over the years.
- In December 31, 2021, the ratio was 1.16, which increased to 1.65 by December 31, 2022 before slightly declining to 1.39 by December 31, 2023, and then rose to 1.49 by December 31, 2024.
- This indicates that the company is becoming more efficient in generating revenue from its fixed assets, although there was a slight dip in 2023.

2. Total Asset Turnover:
- The total asset turnover ratio measures how well the company is utilizing all its assets to generate sales.
- Similarly, there is an increasing trend in the total asset turnover ratio over the years.
- The ratio increased from 0.43 in December 31, 2021 to 0.67 by December 31, 2024.
- This indicates that the company is improving in generating revenue from all its assets over time.

In conclusion, based on the fixed asset turnover and total asset turnover ratios, Sun Country Airlines Holdings Inc is showing improvement in efficiently utilizing its assets to generate revenue over the analyzed period.