Constellation Brands Inc Class A (STZ)

Activity ratios

Short-term

Turnover ratios

	Feb 29, 2024	Nov 30, 2023	Aug 31, 2023	May 31, 2023	Feb 28, 2023	Nov 30, 2022	Aug 31, 2022	May 31, 2022	Feb 28, 2022	Nov 30, 2021	Aug 31, 2021	May 31, 2021	Feb 28, 2021	Nov 30, 2020	Aug 31, 2020	May 31, 2020	Feb 29, 2020	Nov 30, 2019	Aug 31, 2019	May 31, 2019
Inventory turnover	3.34	3.50	3.85	3.56	3.49	3.62	3.82	3.68	3.71	3.84	4.47	4.20	4.52	4.17	4.16	4.28	4.26	4.31	4.46	4.01
Receivables turnover	22.04	20.30	19.45	18.99	19.38	19.08	17.72	19.08	17.89	17.36	16.66	17.36	20.15	17.23	15.93	21.13	17.35	18.43	15.58	18.75
Payables turnover	6.27	6.77	7.13	6.93	7.03	6.46	6.58	6.97	6.49	6.16	7.12	7.05	12.68	7.84	8.49	11.29	10.50	8.66	9.62	10.34
Working capital turnover	31.23	106.21	31.47	38.35	33.10	21.95	17.04	17.93	25.49	14.12	21.42	12.82	8.91	11.22	9.07	9.00	12.80	14.76	11.08	23.04

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

1. Inventory Turnover: The company's inventory turnover ratio has been relatively stable over the periods analyzed, fluctuating between 3.34 and 4.52. This indicates that Constellation Brands efficiently manages its inventory by selling and restocking goods at a consistent pace.

2. Receivables Turnover: The receivables turnover ratio shows an increasing trend from 15.58 to 22.04, indicating that the company is collecting its accounts receivable more efficiently. This suggests effective credit policies and timely collection efforts.

3. Payables Turnover: The payables turnover ratio has varied between 6.16 and 12.68, indicating fluctuations in the company's payment practices to suppliers. A higher turnover ratio suggests that Constellation Brands is paying its suppliers more frequently, which may have implications for its cash flow management.

4. Working Capital Turnover: The working capital turnover ratio has shown significant fluctuations, ranging from 8.91 to 106.21. This suggests varying levels of efficiency in utilizing working capital to generate revenue. The sharp fluctuations may indicate changes in the company's operating efficiency and financial management practices.

Overall, the analysis of activity ratios for Constellation Brands Inc Class A highlights its efficiency in managing inventory and collecting receivables. However, the fluctuations in payables turnover and working capital turnover ratios suggest that the company may need to closely monitor its payment practices and working capital management to ensure optimal performance.

Average number of days

		Feb 29, 2024	Nov 30, 2023	Aug 31, 2023	May 31, 2023	Feb 28, 2023	Nov 30, 2022	Aug 31, 2022	May 31, 2022	Feb 28, 2022	Nov 30, 2021	Aug 31, 2021	May 31, 2021	Feb 28, 2021	Nov 30, 2020	Aug 31, 2020	May 31, 2020	Feb 29, 2020	Nov 30, 2019	Aug 31, 2019	May 31, 2019
Days of inventory on hand (DOH)	days	109.32	104.23	94.89	102.50	104.65	100.94	95.55	99.16	98.40	95.14	81.73	86.82	80.77	87.58	87.75	85.23	85.66	84.66	81.78	91.05
Days of sales outstanding (DSO)	days	16.56	17.98	18.76	19.22	18.83	19.13	20.59	19.13	20.41	21.03	21.91	21.02	18.12	21.18	22.91	17.28	21.04	19.80	23.42	19.46
Number of days of payables	days	58.24	53.94	51.20	52.70	51.89	56.47	55.50	52.36	56.24	59.22	51.30	51.75	28.78	46.57	43.01	32.33	34.77	42.15	37.95	35.29

Analyzing the activity ratios of Constellation Brands Inc Class A reveals insights into the efficiency of the company's operations.

1. Days of Inventory on Hand (DOH): This ratio indicates how many days, on average, the company holds inventory before selling it. The trend for Constellation Brands Inc Class A shows a slight increase in the days of inventory on hand over the past few quarters, reflecting a longer period of inventory turnover. This may suggest potential issues with managing inventory levels efficiently.

2. Days of Sales Outstanding (DSO): DSO represents the average number of days it takes for the company to collect payments from customers after a sale is made. The trend for Constellation Brands Inc Class A indicates fluctuations but relatively stable DSO levels over time. A lower DSO is preferred as it signifies faster collection of receivables, indicating strong liquidity and efficient credit management.

3. Number of Days of Payables: This ratio shows the average number of days it takes for the company to pay its suppliers. Constellation Brands Inc Class A has exhibited a slight variability in the number of days of payables, with some quarters showing longer payment periods. A longer payment period can sometimes indicate favorable working capital management, but it could also signal strained relationships with suppliers.

Overall, Constellation Brands Inc Class A's activity ratios suggest a need for careful monitoring of inventory levels and potential improvements in inventory turnover efficiency. The stability in DSO and variability in the number of days of payables indicate a mixed performance in managing accounts receivable and accounts payable.

Long-term

	Feb 29, 2024	Nov 30, 2023	Aug 31, 2023	May 31, 2023	Feb 28, 2023	Nov 30, 2022	Aug 31, 2022	May 31, 2022	Feb 28, 2022	Nov 30, 2021	Aug 31, 2021	May 31, 2021	Feb 28, 2021	Nov 30, 2020	Aug 31, 2020	May 31, 2020	Feb 29, 2020	Nov 30, 2019	Aug 31, 2019	May 31, 2019
Fixed asset turnover	2.28	2.36	2.39	2.46	2.55	2.69	2.78	2.72	2.65	2.89	2.94	2.97	2.72	2.83	2.85	2.90	2.81	2.87	2.89	2.89
Total asset turnover	0.71	0.73	0.73	0.72	0.71	0.72	0.71	0.65	0.62	0.62	0.64	0.61	0.58	0.57	0.56	0.57	0.55	0.55	0.54	0.51

Constellation Brands Inc Class A's fixed asset turnover has shown consistency and improvement over the specified time period, ranging from 2.28 to 2.97. This indicates the company's ability to generate revenue in relation to its investment in fixed assets, such as property, plant, and equipment. Higher fixed asset turnover ratios suggest efficient utilization of these assets to generate sales.

In contrast, the total asset turnover ratio fluctuated between 0.51 and 0.73 during the same period. This ratio reflects how effectively the company utilizes all its assets to generate revenue. The fluctuations may indicate variations in the efficiency of asset utilization.

Overall, while the fixed asset turnover ratios have shown stability and positive trends, the total asset turnover ratios have been more volatile. Further analysis is recommended to understand the reasons behind these fluctuations and to assess the overall efficiency of asset utilization in the long term for Constellation Brands Inc Class A.