Sysco Corporation (SYY)

Short-term

Turnover ratios

The activity ratios of Sysco Corporation, as reflected in the provided data, reveal patterns and trends pertinent to inventory management, receivables efficiency, payables practices, and overall working capital utilization over the specified periods.

Inventory Turnover:
Sysco’s inventory turnover ratios demonstrate a consistent upward trajectory, beginning at 12.82 times as of September 30, 2020, and rising to approximately 13.74 times by June 30, 2024, with a slight fluctuation afterward. This increasing trend indicates a gradual improvement in inventory management efficiency, suggesting that the company has been able to sell and replace its inventory more rapidly over this timeframe. The incremental rise from around 12.82 to over 13.7 signifies a potential reduction in holding periods and an effort to optimize stock levels relative to sales.

Receivables Turnover:
The receivables turnover ratio shows an overall consistent level, with minor fluctuations. Initially at 15.84 times in September 2020, it declines slightly to about 12.99 in September 2021, then recovers and stabilizes around 14 to 15 times in subsequent periods. This indicates that Sysco maintains a steady collection process, with minor variations suggesting periods of more efficient receivables management. The ratios imply that receivables are collected roughly every 24 to 28 days, reflecting effective credit policies aligned with industry standards.

Payables Turnover:
The payables turnover ratios fluctuate within a range roughly from 8.53 to 11.11 times. The lowest ratios appear during early 2021, with values close to 8.5, while higher figures around 11.11 are observed in late 2022. This variability indicates periods of both more conservative and more aggressive payment practices. An increasing trend toward higher payables turnover ratios suggests an effort to take advantage of credit terms, potentially delaying supplier payments to optimize cash flow. Conversely, periods of lower ratios may reflect tighter payment cycles or supplier relationship strategies.

Working Capital Turnover:
This ratio demonstrates notable volatility, with values starting at 9.38 in September 2020, reaching peaks corresponding with periods of aggressive working capital utilization—exceeding 30 in certain quarters—especially between March 2022 and June 2022. Such high ratios suggest periods where the company is efficiently deploying its working capital relative to sales. Conversely, some periods show lower ratios (around 8 to 10), indicating more conservative utilization. The fluctuations reflect dynamic management of working capital components, potentially driven by variations in operational activities, inventory levels, receivables, and payables.

Summary of Trends:
Overall, Sysco exhibits improving inventory turnover, signifying enhanced inventory management and sales efficiency. Receivables collection remains steady, supporting stable cash flow management. Payables ratios indicate flexible creditor payment strategies, with periods of both extended and shortened payment cycles. The working capital turnover ratios reflect a proactive and sometimes aggressive approach to deploying short-term assets to support sales, with periods of heightened efficiency corresponding with broader operational growth phases.

In aggregate, these ratios portray a company actively managing its operational cycle, leveraging efficiency gains in inventory and working capital, while maintaining steady receivables collection and adaptable payables practices.

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Average number of days

The activity ratios of Sysco Corporation, as indicated by the provided data, reveal several notable trends over the period from September 2020 through June 2025.

Inventory Management (Days of Inventory on Hand - DOH):
Sysco's DOH shows a relatively stable trend with minor fluctuations. Starting at approximately 28.47 days in September 2020, there is a gradual increase to a peak of around 32.62 days in March 2021. Subsequently, the DOH largely fluctuates within a range of approximately 26.22 to 32.27 days, with a notable decrease to 26.22 days in June 2023. Towards the latest periods, the DOH stabilizes around 27 days, ending at approximately 27.78 days in June 2025. This stability suggests a consistent inventory holding policy, with carriers likely managing inventory levels efficiently to adapt to varying demand.

Accounts Receivable Collection (Days of Sales Outstanding - DSO):
The DSO remains relatively consistent, averaging around 24 to 28 days over the observed periods. Initially, in September 2020, it was approximately 23.04 days and experienced slight increases, reaching about 28.10 days in September 2021. Afterward, the DSO generally stabilizes around mid-24 to mid-26 days, with the latest data indicating a level close to 24.68 days in June 2025. This reflects an effective receivables management strategy, with Sysco maintaining a steady collection period that supports healthy cash flow without extending credit excessively.

Trade Payables Management (Number of Days of Payables):
The company’s payable period exhibits more variability but overall trends towards an extended duration compared to receivables. Starting at approximately 36.65 days in September 2020, the payable days generally fluctuate but show an increasing trend, peaking at around 42.77 days in March 2021. Subsequent periods display a pattern of fluctuation within roughly 32.86 to 37.62 days, with an upward shift in recent periods where payables reach approximately 35.80 days as of June 2025. An extended payable cycle indicates that Sysco may be leveraging supplier credit terms to optimize working capital, particularly extending payment periods relative to receivables and inventories.

Overall Assessment:
The activity ratios suggest a balanced and efficient working capital management approach. The relatively stable DOH indicates effective inventory control, avoiding excess stock while ensuring product availability. The consistent DSO reflects disciplined credit collection, supporting cash flows. The widening gap between receivable and payable days indicates strategic leveraging of payables, aligning with typical supply chain finance practices to optimize liquidity. Such practices collectively contribute to maintaining operational liquidity and flexibility, aligning with industry standards for wholesale distribution firms.

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See also:

Sysco Corporation Short-term (Operating) Activity Ratios (Quarterly Data)

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Long-term

The analysis of Sysco Corporation's long-term activity ratios over the specified periods indicates distinct trends in asset utilization efficiency.

Beginning with the fixed asset turnover ratio, which measures how effectively the company utilizes its fixed assets to generate sales, there is an observable initial decline and subsequent recovery. From September 30, 2020, through June 30, 2021, the ratio decreased from 11.21 to 10.19, suggesting a dip in fixed asset utilization efficiency. However, starting in the latter half of 2021, this ratio experienced a notable upward trajectory, reaching a peak of 16.25 in March 2023, indicating an improved capacity to generate sales from fixed assets. After the peak, a slight decline is observed, with the ratio reducing to 13.26 by September 30, 2023, before a modest recovery to 12.17 in December 2024 and further to 11.85 by March 2025. This pattern reflects periods of enhanced fixed asset efficiency followed by modest declines, potentially attributable to changes in asset base or strategic asset management.

Regarding the total asset turnover ratio, which assesses the overall efficiency in utilizing all assets to produce sales, there is a consistent upward trend from 2.17 on September 30, 2020, to a peak of approximately 3.34 in June 2023. This indicates that over time, Sysco has been increasingly efficient in generating sales relative to its total assets. Slight fluctuations are visible thereafter, with the ratio declining marginally to approximately 3.04 by June 2025. The overall trend imparts that the company has successfully enhanced its asset utilization efficiency during this period, though recent declines suggest opportunities for further optimization.

In summary, Sysco has demonstrated notable improvements in both fixed asset and total asset utilization ratios over the analyzed periods. The significant rise in fixed asset turnover from 2021 to early 2023 suggests investments or operational efficiencies that enhanced fixed asset productivity. The steady increase in total asset turnover highlights an overall trend toward more effective asset management, though recent minor declines could imply normalization or strategic adjustments. These ratios together reflect a company generally progressing toward more efficient asset utilization, with some variances that merit ongoing managerial attention.

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See also:

Sysco Corporation Long-term (Investment) Activity Ratios (Quarterly Data)