Constellation Brands Inc Class A (STZ)

Short-term

Turnover ratios

The analysis of activity ratios for Constellation Brands Inc Class A reveals the following trends:

1. Inventory Turnover: This ratio indicates the number of times inventory is sold and replaced during a specific period. Over the period from February 29, 2020, to November 30, 2024, the inventory turnover ratio fluctuated between 2.34 and 3.21. There was a general downward trend in the later periods, with the ratio decreasing to 2.34 by May 31, 2024, before slightly increasing to 2.39 by August 31, 2024.

2. Receivables Turnover: The data provided does not contain information on receivables turnover for any of the periods, suggesting that this ratio was not calculated or disclosed by Constellation Brands Inc Class A.

3. Payables Turnover: Similar to receivables turnover, payables turnover information is not available for the periods provided, indicating that the company did not disclose this ratio.

4. Working Capital Turnover: This ratio reflects how efficiently a company is utilizing its working capital to generate sales. Over the specified period, the working capital turnover ratio ranged from 4.85 to 57.26. There was significant volatility in this ratio, notably increasing from 4.85 on February 28, 2021, to 17.91 on February 28, 2023, before reaching its peak at 57.26 on November 30, 2023. Subsequently, the ratio decreased to 13.90 by August 31, 2024.

Overall, the analysis of these activity ratios indicates varying levels of efficiency and operational performance for Constellation Brands Inc Class A over the years, with notable fluctuations in working capital turnover and inventory turnover ratios.

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Average number of days

Based on the provided data, let's analyze the activity ratios for Constellation Brands Inc Class A:

1. Days of Inventory on Hand (DOH):
- The trend in DOH shows an increase from 119.61 days on February 29, 2020, to 155.87 days on November 30, 2024.
- The company holds inventory for an average of around 140 days in recent periods, indicating a longer inventory turnover cycle.
- The increasing trend in DOH could suggest inefficiencies in managing inventory levels or potential challenges in sales forecasting.

2. Days of Sales Outstanding (DSO):
- The DSO data is not available for analysis as it is marked as "— days" for all periods.
- Lack of information on DSO makes it difficult to assess the average number of days it takes for the company to collect its accounts receivable.
- Typically, a lower DSO indicates more efficient credit management and quicker cash conversion cycle.

3. Number of Days of Payables:
- Similar to DSO, the data for the number of days of payables is not provided and marked as "— days" for all periods.
- Without information on payables days, it is challenging to evaluate the average time the company takes to settle its outstanding supplier payments.
- A longer payable period may suggest favorable payment terms with suppliers, improving cash flow, while a shorter period could indicate stronger supplier relationships.

In summary, the analysis of activity ratios for Constellation Brands Inc Class A indicates a concerning trend in the Days of Inventory on Hand, with increasing inventory holding periods over the years. However, without data on DSO and payables days, a comprehensive assessment of the company's working capital management and operational efficiency is limited.

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See also:

Constellation Brands Inc Class A Short-term (Operating) Activity Ratios (Quarterly Data)

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Long-term

The fixed asset turnover ratio for Constellation Brands Inc Class A has fluctuated over the years, ranging from a low of 1.27 to a high of 1.61. This ratio measures how efficiently the company is utilizing its fixed assets to generate sales. A higher ratio indicates better utilization of fixed assets to generate revenue.

On the other hand, the total asset turnover ratio has shown a more stable trend, gradually increasing over time from 0.31 to 0.45. This ratio reflects the company's ability to generate sales relative to its total assets. A higher total asset turnover ratio suggests that the company is generating more sales per dollar of assets.

Overall, the analysis of Constellation Brands Inc Class A's long-term activity ratios indicates that the company has been improving its efficiency in utilizing both fixed and total assets to generate sales over the years, with a more significant improvement in total asset turnover compared to fixed asset turnover.

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See also:

Constellation Brands Inc Class A Long-term (Investment) Activity Ratios (Quarterly Data)