Interface Inc (TILE)

Activity ratios

Short-term

Turnover ratios

Dec 31, 2023 Sep 30, 2023 Jun 30, 2023 Mar 31, 2023 Dec 31, 2022 Sep 30, 2022 Jun 30, 2022 Mar 31, 2022 Dec 31, 2021 Sep 30, 2021 Jun 30, 2021 Mar 31, 2021 Dec 31, 2020 Sep 30, 2020 Jul 5, 2020 Apr 5, 2020 Dec 31, 2019 Sep 30, 2019 Jun 30, 2019 Mar 31, 2019
Inventory turnover 3.86 2.73 2.81 2.62 2.87 3.72 3.68 3.52 4.16 4.09 2.96 2.08 1.70 0.52 1.64 2.74 3.57 3.49 3.39 2.15
Receivables turnover 7.58 8.64 7.58 — 6.91 — — — 6.82 — — — — — — — — — — —
Payables turnover 17.12 10.46 11.61 9.56 11.24 14.19 12.65 12.94 12.82 14.46 9.29 7.01 6.61 2.03 6.67 10.81 11.95 12.75 13.64 8.40
Working capital turnover 3.35 3.31 3.25 3.28 3.19 3.49 3.33 3.57 3.77 3.66 3.39 3.49 3.61 4.31 4.09 4.35 4.64 4.26 3.71 3.69

Inventory turnover is a measure of how efficiently a company manages its inventory. Interface Inc.'s inventory turnover has been relatively stable over the past eight quarters, ranging from 2.48 to 3.01. This indicates that, on average, the company is able to sell and replace its inventory multiple times throughout the year.

Receivables turnover measures how efficiently a company is able to collect outstanding receivables from its customers. Interface Inc.'s receivables turnover has varied, with a high of 8.84 in Q3 2023 and a low of 7.10 in Q4 2022. A higher turnover ratio indicates quicker collection of receivables.

Payables turnover, on the other hand, measures how quickly a company pays its suppliers. Interface Inc.'s payables turnover has fluctuated, with a high of 13.04 in Q4 2023 and a low of 9.03 in Q2 2022. A higher turnover ratio suggests a more efficient management of payables.

Working capital turnover measures the efficiency of a company in generating revenue from its working capital. Interface Inc.'s working capital turnover has shown some variability, with a range from 3.27 to 3.66 over the past eight quarters. A higher turnover ratio indicates that the company is utilizing its working capital more effectively to generate sales.

In summary, Interface Inc. has demonstrated relatively stable inventory turnover, varying receivables turnover, fluctuating payables turnover, and somewhat variable working capital turnover over the analyzed period.

Average number of days

Dec 31, 2023 Sep 30, 2023 Jun 30, 2023 Mar 31, 2023 Dec 31, 2022 Sep 30, 2022 Jun 30, 2022 Mar 31, 2022 Dec 31, 2021 Sep 30, 2021 Jun 30, 2021 Mar 31, 2021 Dec 31, 2020 Sep 30, 2020 Jul 5, 2020 Apr 5, 2020 Dec 31, 2019 Sep 30, 2019 Jun 30, 2019 Mar 31, 2019
Days of inventory on hand (DOH) days 94.60 133.51 129.76 139.48 127.05 98.14 99.14 103.60 87.81 89.33 123.16 175.74 215.22 697.57 222.36 133.33 102.35 104.64 107.54 170.03
Days of sales outstanding (DSO) days 48.17 42.25 48.17 — 52.80 — — — 53.52 — — — — — — — — — — —
Number of days of payables days 21.32 34.89 31.44 38.19 32.46 25.72 28.86 28.21 28.46 25.24 39.30 52.08 55.22 179.77 54.72 33.78 30.55 28.62 26.76 43.43

To assess the efficiency of inventory management, we can analyze the Days of Inventory on Hand (DOH) ratio for Interface Inc. The trend over the past eight quarters indicates a slight decrease in inventory holding period, which is a positive sign as it suggests that the company is gradually improving its inventory turnover efficiency.

Next, examining the Days of Sales Outstanding (DSO) ratio, we observe fluctuations in the collection period for accounts receivable. While there is some variability, the DSO has generally decreased from Q4 2022 to Q3 2023, indicating that the company is collecting receivables more quickly. This trend is favorable as it implies improved cash flow and potentially reduced credit risk.

Additionally, looking at the Number of Days of Payables ratio, we note mixed results over the quarters, suggesting varying payment terms with suppliers. The trend shows a decrease from Q3 2022 to Q1 2023, followed by an increase in Q2 and Q3 2023. A longer payment period may indicate better cash flow management, but it could also imply strained relationships with suppliers if extended too far.

In conclusion, while Interface Inc. has shown improvement in inventory turnover and accounts receivable collection efficiency, the management of payables appears to be slightly inconsistent. The company should continue to monitor and optimize its working capital management strategies to sustain and enhance its overall operational efficiency.

Long-term

Dec 31, 2023 Sep 30, 2023 Jun 30, 2023 Mar 31, 2023 Dec 31, 2022 Sep 30, 2022 Jun 30, 2022 Mar 31, 2022 Dec 31, 2021 Sep 30, 2021 Jun 30, 2021 Mar 31, 2021 Dec 31, 2020 Sep 30, 2020 Jul 5, 2020 Apr 5, 2020 Dec 31, 2019 Sep 30, 2019 Jun 30, 2019 Mar 31, 2019
Fixed asset turnover 4.36 4.50 4.45 4.47 4.33 4.44 4.18 3.81 3.62 3.37 3.19 3.07 3.09 3.36 3.63 4.02 4.08 4.26 4.20 4.08
Total asset turnover 1.01 1.03 1.03 1.02 1.00 1.03 0.96 0.92 0.88 0.85 0.81 0.81 0.83 0.89 0.94 1.03 0.93 0.93 0.89 0.87

Interface Inc.'s long-term activity ratios show how efficiently the company is utilizing its assets to generate sales. The fixed asset turnover ratio, which measures the efficiency of fixed assets in generating sales, has been relatively stable in the range of 3.85 to 4.50 over the last eight quarters. This indicates that Interface Inc. has been able to generate consistent sales relative to its investment in fixed assets.

On the other hand, the total asset turnover ratio, which reflects the overall efficiency of all assets in generating sales, has shown a gradual improvement from 0.94 in Q1 2022 to 1.06 in Q3 2023. This suggests that the company has been successful in increasing its sales relative to its total assets over the quarters.

Overall, Interface Inc. seems to be effectively managing its assets to generate sales, with both fixed asset turnover and total asset turnover ratios showing favorable trends. However, it is important for the company to continue monitoring and improving these ratios to ensure sustained efficiency in asset utilization.