Sonoco Products Company (SON)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Inventory turnover | 4.89 | 6.86 | 7.11 | 7.06 | 6.91 | 6.55 | 5.93 | 5.32 | 5.27 | 5.53 | 5.39 | 5.59 | 8.06 | 8.40 | 8.64 | 8.92 | 9.30 | 9.31 | 7.99 | 8.54 |
| Receivables turnover | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — |
| Payables turnover | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — |
| Working capital turnover | — | 2.87 | 13.53 | 13.73 | 7.66 | 6.47 | 8.33 | 9.58 | 11.63 | 10.69 | 10.36 | 11.22 | 42.06 | 21.99 | 22.42 | 12.59 | 16.42 | 6.59 | 7.87 | 35.50 |
Activity ratios provide insights into how effectively a company manages its assets and liabilities to generate revenue.
1. Inventory Turnover: Sonoco Products Company has seen fluctuations in its inventory turnover ratio over the years. The ratio declined steadily from 8.54 in March 2020 to 4.89 in December 2024. A higher ratio indicates that the company is efficiently selling its inventory.
2. Receivables Turnover: Data for receivables turnover is missing, so we cannot analyze how quickly Sonoco collects on its credit sales. This ratio helps assess the effectiveness of the company's credit policies and its ability to manage outstanding receivables.
3. Payables Turnover: Similar to receivables turnover, data for payables turnover is unavailable. This ratio is crucial for evaluating how efficiently the company is managing its payables and cash flows.
4. Working Capital Turnover: The working capital turnover ratio measures how well Sonoco is utilizing its working capital to generate sales. The company's ratio varied significantly over the years, ranging from 2.87 in September 2024 to 42.06 in December 2021. A higher ratio suggests better efficiency in utilizing working capital.
Overall, analyzing these activity ratios enables a deeper understanding of Sonoco Products Company's operational efficiency and financial performance in managing its inventory, receivables, payables, and working capital.
Average number of days
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 74.72 | 53.22 | 51.33 | 51.68 | 52.81 | 55.71 | 61.56 | 68.63 | 69.31 | 66.02 | 67.72 | 65.31 | 45.31 | 43.44 | 42.26 | 40.91 | 39.25 | 39.20 | 45.69 | 42.73 |
| Days of sales outstanding (DSO) | days | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — |
| Number of days of payables | days | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — |
Sonoco Products Company's Days of Inventory on Hand (DOH) ratio has fluctuated over the years, indicating changes in its inventory management efficiency. The company maintained its inventory for an average of around 40 to 70 days during the period under review. A higher DOH value suggests slower inventory turnover, which could tie up capital and lead to potential obsolescence risks.
On the other hand, the Days of Sales Outstanding (DSO) and Number of Days of Payables ratios were not available, indicating a lack of transparency or specific data for analysis. The DSO ratio helps evaluate the efficiency of the company in collecting receivables, while the payables period reflects the time taken to pay off suppliers.
Overall, further insights into the DSO and payables ratios would provide a more comprehensive assessment of Sonoco Products Company's liquidity position and working capital management.
Long-term
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Fixed asset turnover | — | — | — | — | — | 3.05 | 4.01 | 4.20 | 3.61 | 3.64 | 3.40 | 3.66 | 4.31 | 3.68 | 3.50 | 3.55 | 4.21 | 4.21 | 4.22 | 4.31 |
| Total asset turnover | 0.50 | 0.73 | 0.92 | 0.93 | 0.94 | 0.94 | 0.99 | 1.02 | 1.02 | 1.01 | 0.94 | 0.86 | 1.10 | 1.12 | 1.09 | 1.00 | 0.99 | 0.90 | 0.91 | 1.06 |
Based on the provided data for Sonoco Products Company, we can analyze the long-term activity ratios, specifically the Fixed Asset Turnover and Total Asset Turnover ratios.
1. Fixed Asset Turnover Ratio:
- The Fixed Asset Turnover ratio measures how efficiently a company is utilizing its fixed assets to generate sales.
- The trend of Sonoco's Fixed Asset Turnover ratio shows fluctuations over the years, ranging between 3.05 and 4.31.
- The ratio peaked at 4.31 on December 31, 2024, which indicates that Sonoco generated $4.31 in sales for every dollar invested in fixed assets.
- However, the ratio declined to 3.05 on September 30, 2023, suggesting a potential decrease in the efficiency of utilizing fixed assets during that period.
- It is important for Sonoco to monitor and improve this ratio over time to ensure optimal utilization of fixed assets for revenue generation.
2. Total Asset Turnover Ratio:
- The Total Asset Turnover ratio reflects how efficiently a company is using its total assets to generate revenue.
- Sonoco's Total Asset Turnover ratio varied between 0.50 and 1.12 during the periods analyzed.
- The ratio reached its peak at 1.12 on September 30, 2021, indicating that Sonoco generated $1.12 in sales for each dollar of total assets.
- However, the ratio decreased to 0.50 on December 31, 2024, which implies a decline in the efficiency of utilizing total assets to generate revenue.
- Sonoco needs to focus on improving this ratio by effectively utilizing its assets to enhance its revenue-generating capabilities.
In conclusion, analyzing the Fixed Asset Turnover and Total Asset Turnover ratios can provide insights into Sonoco Products Company's operational efficiency and asset utilization, highlighting areas of strength and areas for improvement in its long-term activity management.