Tempur Sealy International Inc (TPX)

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 5.79 5.84 5.43 5.05 5.17 4.89 4.79 5.00 5.98 6.73 7.43 6.77 6.53 7.08 6.99 6.66 6.77 6.17 6.75 6.75
Receivables turnover 10.80 9.40 10.39 10.60 11.65 10.43 10.73 12.02 11.75 9.07 9.52 9.81 9.58 7.92 9.30 8.68 8.35 6.75 7.30 7.76
Payables turnover 8.98 7.84 7.93 7.78 7.98 6.65 6.86 6.28 6.42 5.59 6.95 7.75 6.29 5.90 7.32 6.86 7.01 6.05 6.97 6.59
Working capital turnover 25.26 26.18 20.00 19.73 23.00 25.66 20.83 43.56 22.19 14.31 65.31 12.24 — 28.76 — 10.94 24.48 25.87 18.43 21.70

1. Inventory turnover: Tempur Sealy International Inc's inventory turnover ratios have been relatively stable over the past eight quarters, ranging between 5.05 and 5.84. This indicates that the company is efficient in managing its inventory levels and converting them into sales. A higher turnover ratio suggests that the company is effectively selling its inventory.

2. Receivables turnover: The company's receivables turnover ratios have also been consistent over the same period, fluctuating between 9.40 and 12.02. A higher turnover ratio signifies that Tempur Sealy is collecting its accounts receivable more efficiently. This implies that the company's credit policies are effective and customers are paying their debts promptly.

3. Payables turnover: Tempur Sealy's payables turnover ratios have shown a slight increase over the quarters, ranging from 6.28 to 8.98. A higher payables turnover ratio indicates that the company is paying its suppliers more promptly, which could help in maintaining good relationships with vendors. However, it is essential to ensure that early payment does not have a negative impact on cash flow.

4. Working capital turnover: The working capital turnover ratios for Tempur Sealy have been fluctuating widely, with values ranging from 19.73 to 43.56. This ratio measures how efficiently the company is using its working capital to generate sales revenue. Higher turnover values suggest that the company is effectively utilizing its working capital to support business operations and generate revenue.

Overall, Tempur Sealy International Inc appears to be managing its inventory, receivables, payables, and working capital efficiently, as indicated by the relatively stable and competitive activity ratios.

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 63.05 62.46 67.17 72.25 70.54 74.66 76.15 73.07 61.08 54.27 49.11 53.92 55.88 51.54 52.19 54.83 53.91 59.12 54.07 54.05
Days of sales outstanding (DSO) days 33.81 38.83 35.12 34.45 31.34 34.99 34.01 30.36 31.05 40.24 38.35 37.21 38.09 46.09 39.23 42.03 43.72 54.07 50.01 47.03
Number of days of payables days 40.63 46.53 46.02 46.93 45.73 54.87 53.21 58.11 56.88 65.34 52.52 47.12 58.03 61.89 49.83 53.21 52.09 60.30 52.38 55.41

The activity ratios of Tempur Sealy International Inc provide insights into how efficiently the company manages its inventory, collects receivables, and pays its suppliers.

1. Days of Inventory on Hand (DOH):
- The average number of days it takes for Tempur Sealy to sell its inventory slightly decreased from Q1 to Q4 of 2023, indicating improved inventory management efficiency. However, the DOH has fluctuated over the quarters, ranging from 63.05 days to 76.15 days.

2. Days of Sales Outstanding (DSO):
- Tempur Sealy's DSO reflects the average number of days it takes to collect payment from customers. The DSO decreased from Q3 to Q4 of 2023, suggesting a faster collection of receivables. The range of DSO over the quarters was from 30.36 days to 38.83 days.

3. Number of Days of Payables:
- The number of days it takes for Tempur Sealy to pay its suppliers has fluctuated over the quarters, with a range from 40.63 days to 58.11 days. A decreasing trend in the number of days of payables from Q1 to Q4 of 2023 indicates improved payment efficiency.

Overall, the analysis of these activity ratios reveals that Tempur Sealy has been taking steps to enhance its inventory management, accounts receivable collection, and accounts payable processes.

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 6.17 5.82 5.82 5.94 6.81 7.00 7.68 8.20 9.51 9.40 9.62 8.67 7.24 8.26 6.87 7.03 7.13 6.75 6.56 6.61
Total asset turnover 1.08 1.09 1.08 1.08 1.13 1.17 1.17 1.19 1.14 1.04 1.34 1.10 1.11 1.01 0.99 0.98 1.01 0.94 0.93 0.93

The fixed asset turnover ratio for Tempur Sealy International Inc has been consistently declining over the last few quarters, from 8.20 in Q1 2022 to 5.61 in Q4 2023. This indicates that the company is generating less revenue from its fixed assets over time. It is important to investigate the reasons behind this decrease, such as changes in production efficiency or utilization of fixed assets.

On the other hand, the total asset turnover ratio has also been decreasing gradually, from 1.19 in Q1 2022 to 1.08 in Q4 2023. This suggests that the company's ability to generate sales from all its assets has been weakening. It may be beneficial for stakeholders to assess the company's asset management strategies and operational efficiency to improve this ratio.

Overall, the declining trend in both fixed asset turnover and total asset turnover ratios for Tempur Sealy International Inc raises concerns about the company's operational effectiveness and profitability. Further analysis of the factors influencing these ratios is required to identify opportunities for improvement and long-term sustainability.