Treehouse Foods Inc (THS)

Short-term

Turnover ratios

1. Inventory Turnover:
- The inventory turnover ratio for Treehouse Foods Inc has shown fluctuations over the past five years, ranging from a low of 3.46 in December 2021 to a high of 5.93 in December 2020.
- Generally, a higher inventory turnover ratio indicates more efficient management of inventory, as the company is selling and replenishing its inventory more frequently.
- Treehouse Foods Inc experienced a decrease in inventory turnover in the recent years, with the ratio stabilizing around 5.20 to 5.35 in the last two years. This may suggest a slower movement of inventory relative to sales.

2. Receivables Turnover:
- The receivables turnover ratio for Treehouse Foods Inc is not available for any of the years provided in the data set.
- This could indicate that the company does not report detailed information on its receivables turnover or has a negligible level of accounts receivable turnover.

3. Payables Turnover:
- Similar to receivables turnover, the payables turnover ratio is not available for any of the years in the data set.
- The absence of this ratio information makes it challenging to assess how quickly the company is paying its suppliers.

4. Working Capital Turnover:
- The working capital turnover ratio for Treehouse Foods Inc has varied significantly, from 9.93 in December 2020 to 15.67 in December 2021.
- A higher working capital turnover ratio indicates a more efficient use of working capital to generate sales revenue.
- The ratio dropped to 9.79 in December 2023 but recovered to 12.67 by December 2024, suggesting improved efficiency in utilizing working capital in generating sales.

In summary, Treehouse Foods Inc has shown variability in its activity ratios over the years, with fluctuations in inventory turnover and working capital turnover. However, the lack of data for receivables and payables turnover limits a comprehensive analysis of the company's overall efficiency in managing its assets and liabilities.

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Average number of days

Treehouse Foods Inc's Days of Inventory on Hand (DOH) has shown a significant increase from 61.59 days as of December 31, 2020, to 105.60 days as of December 31, 2021, indicating that the company is holding inventory for a longer period, which may tie up capital and increase storage costs. However, the DOH decreased to 77.55 days by December 31, 2022, suggesting a more efficient management of inventory levels. In the subsequent years, the DOH remained relatively stable around 68-70 days, indicating a consistent inventory management approach.

The Days of Sales Outstanding (DSO) and Number of Days of Payables data are not provided for the years analyzed, which limits the ability to evaluate Treehouse Foods Inc's efficiency in collecting receivables and managing payables.

Overall, the variation in Treehouse Foods Inc's Days of Inventory on Hand (DOH) over the years suggests fluctuations in the company's inventory management practices, with notable improvements in 2022. However, the absence of data on DSO and payables hinders a comprehensive analysis of the company's overall activity ratios.

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Long-term

The fixed asset turnover ratio measures how efficiently a company is utilizing its fixed assets to generate revenue. In the case of Treehouse Foods Inc, we observe fluctuations in the fixed asset turnover ratio over the years. In 2020, the ratio was 3.53, indicating that for every dollar invested in fixed assets, the company generated $3.53 in sales. However, this ratio decreased to 2.38 in 2021, suggesting a decline in the efficiency of utilizing fixed assets to generate revenue.

Interestingly, the ratio then increased significantly to 3.87 in 2022, indicating a substantial improvement in the efficiency of asset utilization in that year. For 2023 and 2024, data for fixed asset turnover is unavailable, but the trends observed in the previous years suggest that the company experienced fluctuations in this ratio.

Total asset turnover ratio reflects the overall efficiency of a company in generating sales using all of its assets, including fixed and current assets. Treehouse Foods Inc saw a decrease in total asset turnover from 0.79 in 2020 to 0.54 in 2021, implying that the company was generating less revenue for each dollar invested in total assets during that period.

However, this ratio then recovered to 0.78 in 2022, indicating a better utilization of assets to drive sales. In 2023 and 2024, the total asset turnover ratio remained stable at 0.84, suggesting that the company was able to maintain its efficiency in generating revenue relative to the total assets employed.

Overall, analyzing the long-term activity ratios of Treehouse Foods Inc reveals fluctuations in asset turnover ratios over the years, reflecting changes in the efficiency of utilizing fixed and total assets to drive sales. Monitoring these ratios can provide insights into the company's operational efficiency and asset management strategies.