Stanley Black & Decker Inc (SWK)

Short-term

Turnover ratios

The inventory turnover ratio for Stanley Black & Decker Inc has shown a decline over the last few years, indicating a decrease in the efficiency of managing its inventory. The ratio decreased from 3.76 in March 2020 to 2.39 in December 2024. A lower inventory turnover may indicate excess inventory or slow-moving goods.

The receivables turnover ratio, which measures how effectively the company is collecting on its credit sales, was not available for the periods provided. Without this information, we are unable to assess the efficiency of the company in collecting its receivables.

Similarly, the payables turnover ratio, which reflects how quickly the company pays its suppliers, was not available for the periods provided. This ratio is important as it shows the company's ability to manage its outstanding payments effectively.

The working capital turnover ratio, which measures how efficiently the company is using its working capital to generate sales, fluctuated over the years. The ratio ranged from 8.02 to 26.58 during the period analyzed. A higher working capital turnover ratio indicates that the company is effectively using its working capital to generate revenue.

Overall, the declining trend in inventory turnover and the fluctuating trend in working capital turnover suggest potential inefficiencies in managing inventory and working capital, which may require further investigation and attention from management.

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Average number of days

Based on the provided data, let's analyze Stanley Black & Decker Inc's activity ratios:

1. Days of Inventory on Hand (DOH)
- The trend in the DOH ratio shows the number of days it takes for the company to turn its inventory into sales.
- The DOH ratio increased from 97.14 days on March 31, 2020, to 152.83 days on December 31, 2024, showing an increasing trend until the end of the period.
- A higher DOH ratio indicates that the company is holding onto inventory for a longer period, potentially leading to higher carrying costs and obsolete inventory risks.

2. Days of Sales Outstanding (DSO)
- The data provided does not contain information on DSO, which indicates the average number of days it takes for the company to collect its accounts receivable.
- Since there is no data on DSO, we are unable to assess the efficiency of the company in collecting its receivables during the period.

3. Number of Days of Payables
- The data does not include information on the number of days of payables outstanding, which shows how quickly the company is paying its suppliers.
- Without data on payables days, we cannot evaluate the company's management of its accounts payable and potential liquidity implications.

In conclusion, based on the available data, Stanley Black & Decker Inc's inventory turnover showed a declining trend over the period, potentially signaling inefficiencies in inventory management. However, the lack of information on DSO and payables days limits a comprehensive analysis of the company's overall efficiency in managing its working capital.

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Long-term

Based on the provided data, Stanley Black & Decker Inc's long-term activity ratios can be analyzed as follows:

1. Fixed Asset Turnover: This ratio measures how efficiently the company is utilizing its fixed assets to generate sales. The trend shows fluctuation over the years, with the ratio ranging from 5.91 to 8.13. The company's fixed asset turnover peaked at 8.13 in September 2021 but decreased to 5.91 by September 2023 before data is unavailable for the following years. This indicates that the company may have experienced challenges in efficiently generating sales from its fixed assets during those periods.

2. Total Asset Turnover: This ratio reflects the efficiency of the company in using all its assets to generate revenue. The total asset turnover ratio for Stanley Black & Decker Inc ranged from 0.57 to 0.70 during the period under review. The company's total asset turnover ratio peaked at 0.70 in June 2024, suggesting that the company was able to generate more revenue from its total assets during that period.

Overall, the analysis indicates that Stanley Black & Decker Inc's efficiency in utilizing both fixed assets and total assets to generate sales has varied over time. A deeper investigation into the reasons behind these fluctuations would provide valuable insights into the company's operational performance and strategic decisions.