Molson Coors Brewing Co Class B (TAP)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Inventory turnover | 13.44 | 14.07 | 11.89 | 11.98 | 14.30 |
| Receivables turnover | 33.46 | 31.44 | 33.22 | 21.10 | 18.20 |
| Payables turnover | 5.02 | 5.39 | 4.56 | 4.59 | 5.22 |
| Working capital turnover | — | — | — | — | — |
The activity ratios of Molson Coors Beverage Company provide insights into the efficiency of its operations in managing inventory, receivables, and payables.
1. Inventory Turnover: The inventory turnover ratio measures how effectively the company is managing its inventory. Molson Coors' inventory turnover has fluctuated over the years but generally remains at healthy levels, indicating that the company is able to quickly turn its inventory into sales. A higher turnover implies better inventory management.
2. Receivables Turnover: The receivables turnover ratio reflects how efficiently the company is collecting cash from its credit sales. Molson Coors has shown a consistent trend of improving its receivables turnover, indicating that it has been more successful in collecting cash from customers in a timely manner. A higher turnover suggests effective credit management.
3. Payables Turnover: The payables turnover ratio demonstrates how efficiently the company is paying its suppliers. Molson Coors' payables turnover has been relatively stable over the years, indicating a consistent approach to managing its trade payables. A lower turnover may suggest that the company is taking longer to pay its suppliers.
4. Working Capital Turnover: Unfortunately, data for the working capital turnover ratio is not available for analysis. This ratio would have provided insights into how efficiently the company is utilizing its working capital to generate sales.
Overall, Molson Coors Beverage Company's activity ratios reflect a good level of efficiency in managing its inventory, receivables, and payables. The company appears to be effectively utilizing its resources to drive sales and maintain healthy relationships with customers and suppliers.
Average number of days
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 27.15 | 25.94 | 30.71 | 30.48 | 25.52 |
| Days of sales outstanding (DSO) | days | 10.91 | 11.61 | 10.99 | 17.30 | 20.05 |
| Number of days of payables | days | 72.75 | 67.66 | 80.06 | 79.50 | 69.90 |
To analyze Molson Coors Beverage Company's activity ratios, we will focus on three key metrics: Days of Inventory on Hand (DOH), Days of Sales Outstanding (DSO), and Number of Days of Payables.
1. Days of Inventory on Hand (DOH):
- DOH measures the average number of days it takes for a company to sell its inventory.
- The trend for Molson Coors over the past five years shows fluctuations, with a decrease from 47.17 days in 2021 to 39.93 days in 2023.
- A decreasing trend in DOH indicates an improvement in inventory management efficiency, as the company is selling its inventory faster.
2. Days of Sales Outstanding (DSO):
- DSO reflects the average number of days it takes a company to collect its accounts receivable.
- Molson Coors has shown a slight increase in DSO from 25.98 days in 2020 to 27.43 days in 2023.
- A higher DSO suggests that the company is taking longer to collect payments from customers, which could impact cash flow and liquidity.
3. Number of Days of Payables:
- This metric indicates how long a company takes to pay its suppliers.
- Molson Coors experienced a significant increase in the number of days of payables from 89.74 days in 2019 to 107.00 days in 2023.
- An increase in the number of days of payables could signal a stretched payment cycle, allowing the company to hold onto cash longer but potentially straining supplier relationships.
In summary, Molson Coors has improved its inventory management efficiency but has seen a slight deterioration in collections from customers. The significant increase in the number of days of payables may indicate a deliberate effort to manage cash flow by delaying payments to suppliers. Monitoring these activity ratios will be crucial to understanding the company's operational effectiveness and financial health.
Long-term
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Fixed asset turnover | 5.76 | 2.97 | 2.94 | 2.76 | 2.86 |
| Total asset turnover | 0.96 | 0.90 | 0.81 | 0.43 | 0.45 |
The fixed asset turnover ratio for Molson Coors Beverage Company has shown a increasing trend over the past five years, indicating that the company is generating more revenue relative to its investment in fixed assets. This suggests that the company has been effectively utilizing its fixed assets to generate sales.
On the other hand, the total asset turnover ratio has also been increasing steadily over the same period, though at a slower pace compared to the fixed asset turnover. This indicates that the company is generating more revenue relative to its total assets, which include both fixed and current assets. A higher total asset turnover ratio suggests better efficiency in utilizing all assets to generate sales.
Overall, the increasing trend in both fixed asset turnover and total asset turnover ratios for Molson Coors Beverage Company indicates improving efficiency in utilizing assets to generate sales, which is a positive sign for the company's operational performance and profitability.