Treehouse Foods Inc (THS)

Short-term

Turnover ratios

Treehouse Foods Inc's inventory turnover ratio has shown a decreasing trend from 6.53 on March 31, 2020, to 5.20 on December 31, 2024. This indicates that the company's efficiency in managing and selling its inventory has been declining over the years.

The receivables turnover ratio is not available, indicating that the company does not provide data on how quickly it collects outstanding receivables from its customers.

Similarly, the payables turnover ratio is also not available, suggesting that information about how quickly the company pays its suppliers is not disclosed.

The working capital turnover ratio has fluctuated significantly over the years, ranging from 3.83 on September 30, 2022, to 63.17 on March 31, 2023. This ratio indicates the efficiency of utilizing working capital to generate revenue. The sharp fluctuations in this ratio highlight potential challenges or changes in the company's working capital management strategies.

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Average number of days

Based on the data provided for Treehouse Foods Inc, we can analyze the activity ratios as follows:

1. Days of Inventory on Hand (DOH):
- The days of inventory on hand have shown fluctuations over the periods analyzed, ranging from a low of 55.90 days to a high of 104.14 days.
- Generally, an increasing trend in DOH may indicate slower inventory turnover or potential issues with managing inventory levels efficiently.
- A higher DOH may tie up capital in excess inventory, leading to increased holding costs and potentially impacting cash flow.

2. Days of Sales Outstanding (DSO):
- The data for days of sales outstanding is not available for the periods provided, indicating that specific information regarding the collection period for accounts receivable is not accessible.
- DSO is a measure of how long it takes to collect outstanding receivables. A lower DSO is generally favorable as it signifies quicker collection of sales, improving cash flow and liquidity.

3. Number of Days of Payables:
- Similarly, there is no data available for the number of days of payables for the periods provided, suggesting a lack of information on the average payment period for trade payables.
- Monitoring the days of payables is crucial as extending payment periods can help preserve cash flow, but excessively long payables periods may strain supplier relationships.

Overall, while the information on the days of inventory on hand is detailed and indicates trends in inventory management, the absence of data on days of sales outstanding and number of days of payables limits a comprehensive assessment of Treehouse Foods Inc's working capital efficiency and cash flow management. It is important to consider all three activity ratios together to gain a holistic view of the company's operational performance in managing inventory, receivables, and payables effectively.

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Long-term

The Fixed Asset Turnover ratio for Treehouse Foods Inc has shown a fluctuating trend over the years, starting at 4.21 in March 2020 and peaking at 4.27 in September 2022 before decreasing to 3.83 in September 2023. This ratio measures the efficiency of the company in generating sales from its fixed assets, such as property, plant, and equipment. A higher ratio indicates better utilization of fixed assets to generate revenue.

On the other hand, the Total Asset Turnover ratio has experienced a declining trend, starting at 0.82 in March 2020, reaching a low of 0.66 in June 2022, and slightly recovering to 0.87 by June 2024. This ratio indicates the company's ability to generate revenue from all its assets. A decreasing trend in total asset turnover could imply declining sales relative to the size of the asset base.

Overall, the Fixed Asset Turnover ratio suggests that Treehouse Foods Inc has been relatively efficient in utilizing its fixed assets to generate sales, although there has been some fluctuation in performance. However, the declining trend in Total Asset Turnover ratio may indicate challenges in effectively utilizing all assets to drive revenue growth. Continued monitoring of these ratios will be essential to assess the company's operational efficiency and asset management in the long term.