Sysco Corporation (SYY)

Activity ratios

Short-term

Turnover ratios

	Jun 30, 2024	Jun 30, 2023	Jun 30, 2022	Jun 30, 2021	Jun 30, 2020
Inventory turnover	13.73	13.92	12.69	11.35	13.89
Receivables turnover	14.75	14.97	14.08	13.53	17.62
Payables turnover	10.21	10.35	9.79	8.59	12.47
Working capital turnover	43.75	36.91	39.60	15.03	9.39

The activity ratios of Sysco Corporation provide valuable insights into the efficiency of the company's operations.

1. Inventory turnover: This ratio measures how many times inventory is sold and replaced over a period. Sysco's inventory turnover has been fairly consistent over the past five years, indicating that the company efficiently manages its inventory levels.

2. Receivables turnover: This ratio reflects how quickly Sysco collects payments from its customers. The higher the ratio, the more efficient the company is in collecting accounts receivable. Sysco's receivables turnover has also remained stable over the years, suggesting effective credit management practices.

3. Payables turnover: Payables turnover shows how quickly Sysco pays off its suppliers. A lower ratio could indicate the company is taking longer to pay its bills. Sysco's payables turnover has fluctuated slightly but remained within a manageable range, suggesting a balanced approach to managing payables.

4. Working capital turnover: This ratio evaluates how efficiently Sysco utilizes its working capital to generate sales. A higher ratio indicates the company is generating more revenue per dollar of working capital. Sysco's working capital turnover has shown significant improvement over the years, indicating enhanced efficiency in capital utilization.

Overall, Sysco Corporation demonstrates strong operational efficiency through its consistent inventory turnover, receivables turnover, payables turnover, and improving working capital turnover ratios over the past five years. These ratios reflect effective management of resources and relationships with customers and suppliers, contributing to the company's overall financial performance.

Average number of days

		Jun 30, 2024	Jun 30, 2023	Jun 30, 2022	Jun 30, 2021	Jun 30, 2020
Days of inventory on hand (DOH)	days	26.58	26.22	28.76	32.16	26.28
Days of sales outstanding (DSO)	days	24.75	24.38	25.92	26.97	20.71
Number of days of payables	days	35.74	35.26	37.29	42.51	29.27

Sysco Corporation's activity ratios reflect how efficiently the company manages its inventory, collects receivables, and pays its suppliers.

1. Days of Inventory on Hand (DOH):
- The DOH has been relatively consistent over the past five years, ranging between 26.22 days to 32.16 days.
- The decreasing trend in 2022 and 2020 compared to 2021 indicates improved inventory management efficiency.
- Overall, Sysco appears to effectively manage its inventory levels, with inventory turnover happening approximately every 26 to 32 days.

2. Days of Sales Outstanding (DSO):
- The DSO measures the average number of days it takes for Sysco to collect on its sales.
- The DSO has been stable over the years, ranging from 20.71 days to 26.97 days.
- The longer DSO in 2021 and 2022 compared to 2020 and 2023 may indicate slower collection of receivables in those years.
- Sysco generally collects its receivables within a reasonable timeframe, indicating effective credit and collection policies.

3. Number of Days of Payables:
- This ratio measures how long it takes Sysco to pay its suppliers.
- The days of payables have fluctuated over the years, from 29.27 days to 42.51 days.
- The significant increase in 2022 compared to 2020 and 2021 might suggest a shift towards a longer payment period to suppliers.
- Sysco's ability to manage its payables effectively impacts its cash flow and relationships with suppliers.

In conclusion, Sysco Corporation appears to have a relatively efficient inventory management process and collection of receivables, but there may be opportunities to optimize payment terms with suppliers to enhance overall working capital management.

Long-term

	Jun 30, 2024	Jun 30, 2023	Jun 30, 2022	Jun 30, 2021	Jun 30, 2020
Fixed asset turnover	14.34	15.53	15.40	11.86	11.86
Total asset turnover	3.16	3.34	3.11	2.40	2.34

Sysco Corporation has exhibited a consistent trend of efficiency in utilizing its fixed assets to generate sales revenue, as evidenced by the increasing fixed asset turnover ratios from 2020 to 2023, followed by a slight decrease in 2024. This implies that the company is effectively utilizing its fixed assets to generate sales, although the slight decrease in 2024 may warrant further investigation.

In terms of total asset turnover, Sysco Corporation's efficiency in generating sales revenue relative to its total assets has shown improvement over the years, with a notable increase from 2020 to 2023. The total asset turnover ratio peaked in 2023 before experiencing a slight decline in 2024. This suggests that the company has been able to generate higher sales relative to its total assets in recent years, indicating improved asset utilization efficiency.

Overall, Sysco Corporation's long-term activity ratios reflect a positive trend in asset utilization efficiency, particularly in terms of both fixed asset turnover and total asset turnover. However, the slight declines in these ratios in 2024 may warrant further analysis to understand the underlying factors driving these changes and to ensure continued efficiency in asset utilization.