Travel + Leisure Co (TNL)

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 Jun 30, 2020 Mar 31, 2020 Dec 31, 2019 Sep 30, 2019 Jun 30, 2019 Mar 31, 2019
Inventory turnover 1.49 1.47 1.45 1.42 1.35 1.31 1.20 1.20 1.05 1.93 1.59 1.31 1.09 0.01 0.04 0.10 0.15 0.16 0.15 0.15
Receivables turnover 1.30 1.23 1.24 0.60
Payables turnover 2.30
Working capital turnover 11.50 58.94 85.21 53.49 5.29 884.50 110.97 26.52 5.94 13.92 12.14 8.54 1.11 2.41 2.29 5.14 1.15 1.33 1.35 0.51

Activity ratios provide insights into how efficiently a company is managing its operations and resources. Let's analyze Travel+Leisure Co's activity ratios based on the provided data:

1. Inventory Turnover:
Travel+Leisure Co's inventory turnover has been relatively stable between 0.12 and 0.16 over the past eight quarters. A lower inventory turnover ratio could indicate slow-moving inventory, which may tie up company funds unnecessarily. The company may need to focus on managing its inventory levels more effectively to improve this ratio.

2. Receivables Turnover:
The receivables turnover ratio for Travel+Leisure Co has shown significant fluctuations, ranging from 11.90 to 23.17 over the same period. A higher receivables turnover ratio suggests that the company is efficiently collecting payments from customers. However, the fluctuations in this ratio may indicate inconsistent credit policies or changes in customer payment behavior that could impact cash flow.

3. Payables Turnover:
Travel+Leisure Co's payables turnover ratio has also varied between 1.82 and 2.68 in the last eight quarters. A lower payables turnover ratio may suggest that the company is taking longer to pay its suppliers, potentially straining supplier relationships. Conversely, a higher ratio could indicate that the company is paying its bills more quickly, which may impact cash flow management.

4. Working Capital Turnover:
The working capital turnover ratio for Travel+Leisure Co has ranged from 1.01 to 1.23. This ratio measures how effectively the company is using its working capital to generate revenue. A higher ratio indicates that the company is efficiently using its resources to support its operations. The fluctuations in this ratio suggest changes in the efficiency of working capital management over time.

In conclusion, while Travel+Leisure Co's activity ratios provide insights into different aspects of its operations, the fluctuations in these ratios over time indicate areas where the company may need to focus on improving efficiency, such as inventory management, receivables collection, payables management, and working capital utilization. Additional analysis and comparison with industry benchmarks may provide further insights into the company's operational performance.


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 Jun 30, 2020 Mar 31, 2020 Dec 31, 2019 Sep 30, 2019 Jun 30, 2019 Mar 31, 2019
Days of inventory on hand (DOH) days 244.84 248.60 252.57 257.26 270.46 278.12 304.04 305.02 346.21 188.90 229.78 278.51 336.29 25,569.21 8,183.68 3,585.24 2,365.59 2,298.36 2,399.14 2,432.66
Days of sales outstanding (DSO) days 281.60 297.38 294.32 603.97
Number of days of payables days 158.43

Days of inventory on hand (DOH) measures how many days a company's current inventory will last. Travel+Leisure Co's DOH has been fluctuating over the past eight quarters, ranging from approximately 2,341 to 3,127 days. The trend indicates that the company may be carrying excess inventory, which could tie up cash flow and lead to potential obsolescence.

Days of sales outstanding (DSO) represents the average number of days it takes for a company to collect revenue after a sale is made. Travel+Leisure Co's DSO has shown variability, with values ranging from around 15 to 30 days. A decreasing trend in DSO is positive, as it indicates that the company is collecting revenue more efficiently and effectively managing its accounts receivable.

Number of days of payables indicates how long a company takes to pay its suppliers. Travel+Leisure Co's payables period has varied over the quarters, with values between approximately 137 to 201 days. An increase in the number of days of payables may suggest that the company is taking longer to pay its suppliers, which could be beneficial for cash flow management but may strain supplier relationships.

In summary, Travel+Leisure Co should focus on optimizing its inventory levels, maintaining a reasonable DSO, and managing its payables effectively to improve its overall operating efficiency and cash flow management.


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 Jun 30, 2020 Mar 31, 2020 Dec 31, 2019 Sep 30, 2019 Jun 30, 2019 Mar 31, 2019
Fixed asset turnover 5.73 5.67 5.51 5.43 5.42 4.81 4.71 4.46 4.55 4.29 4.16 3.39 3.24 3.96 4.64 5.48 5.95 5.29 5.29 5.18
Total asset turnover 0.56 0.56 0.55 0.56 0.53 0.55 0.53 0.50 0.48 0.44 0.40 0.33 0.28 0.34 0.41 0.48 0.54 0.51 0.51 0.51

Travel+Leisure Co's long-term activity ratios provide insight into how effectively the company is utilizing its assets to generate sales.

The fixed asset turnover ratio has shown a consistent upward trend over the past eight quarters, reaching a high of 5.73 in Q4 2023. This indicates that the company is generating $5.73 in sales for every $1 invested in fixed assets. The increasing trend suggests improved efficiency in utilizing these long-term assets to generate revenue.

On the other hand, the total asset turnover ratio has been relatively stable around the range of 0.50 to 0.56 over the same period. This ratio reveals that for every $1 of total assets, the company is generating sales between $0.50 and $0.56. While it is positive that the ratio has remained fairly consistent, it is lower compared to the fixed asset turnover ratio, indicating that the company may have a large proportion of assets that are not directly contributing to sales generation.

Overall, the fluctuating fixed asset turnover ratio indicates improving efficiency in utilizing long-term assets, while the stable total asset turnover ratio highlights the need for the company to potentially improve the utilization of its total assets to drive sales growth.