Tootsie Roll Industries Inc (TR)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Inventory turnover | 11.27 | 10.19 | 13.15 | 9.20 | 10.51 |
| Receivables turnover | 13.79 | 11.75 | 10.40 | 11.46 | 11.75 |
| Payables turnover | 42.21 | 22.82 | 33.65 | 31.69 | 36.03 |
| Working capital turnover | 3.12 | 3.14 | 3.03 | 1.88 | 1.93 |
Tootsie Roll Industries, Inc.'s activity ratios indicate various aspects of its operating efficiency and liquidity management over the past five years.
1. Inventory Turnover:
- Tootsie Roll's inventory turnover has been relatively stable over the past five years, ranging from 5.05 to 6.69 times. This indicates that the company is efficiently managing its inventory levels and turning over its goods effectively.
2. Receivables Turnover:
- The receivables turnover ratio has been steadily increasing over the years, reaching 11.89 in 2023 from 10.88 in 2019. This suggests that Tootsie Roll is collecting its accounts receivable at a faster pace, which is a positive sign for its liquidity and overall financial health.
3. Payables Turnover:
- The payables turnover ratio has shown fluctuations over the years, with a significant increase to 32.41 in 2023 from 17.99 in 2022. This could indicate that the company is taking longer to pay its suppliers, potentially improving its cash flow situation.
4. Working Capital Turnover:
- Tootsie Roll's working capital turnover has generally been increasing, indicating that the company is generating more revenue per dollar of working capital invested. This suggests efficient utilization of working capital in generating sales.
Overall, Tootsie Roll Industries, Inc. appears to be effectively managing its operational activities, with improvements in receivables turnover and working capital turnover. However, the significant increase in payables turnover in 2023 may warrant closer monitoring to ensure it does not negatively impact the company's supplier relationships or financial stability.
Average number of days
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 32.39 | 35.82 | 27.76 | 39.68 | 34.72 |
| Days of sales outstanding (DSO) | days | 26.47 | 31.06 | 35.08 | 31.86 | 31.06 |
| Number of days of payables | days | 8.65 | 15.99 | 10.85 | 11.52 | 10.13 |
Tootsie Roll Industries, Inc.'s activity ratios provide insights into the efficiency of its operations in managing inventory, collecting receivables, and paying off its payables.
1. Days of Inventory on Hand (DOH):
- In 2023, the company held inventory for an average of 67.60 days, showing a slight decrease from the previous year (67.71 days).
- Compared to 2021, when DOH was 54.53 days, the inventory turnover has slowed down, indicating that the company may be facing challenges in efficiently managing its inventory levels.
- Overall, Tootsie Roll Industries has historically maintained a relatively consistent level of days of inventory on hand, signifying stable inventory management practices.
2. Days of Sales Outstanding (DSO):
- The DSO for 2023 was 30.71 days, showing an improvement compared to the previous year (33.40 days). This lower number indicates that the company is collecting its receivables more efficiently.
- In comparison to 2021 and 2019, where DSO was higher, Tootsie Roll Industries has enhanced its collection efforts, which are positive indicators of effective accounts receivable management.
3. Number of Days of Payables:
- Tootsie Roll Industries took an average of 11.26 days to pay its payables in 2023, a significant decrease from the previous year (20.29 days).
- The company has effectively managed its payables by reducing the number of days, indicating efficient cash flow management practices.
- Comparing the payables period to 2021, the company has managed to lower its payables days, demonstrating a favorable liquidity position and potential bargaining power with suppliers.
In summary, Tootsie Roll Industries, Inc. has shown improvements in managing its inventory, receivables, and payables in 2023, which can lead to enhanced operational efficiency and financial performance.
Long-term
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Fixed asset turnover | 3.44 | 3.25 | 2.74 | 2.52 | 2.81 |
| Total asset turnover | 0.71 | 0.68 | 0.56 | 0.48 | 0.54 |
Tootsie Roll Industries, Inc.'s long-term activity ratios indicate the company's efficiency in utilizing its fixed assets and total assets to generate sales over the years.
The fixed asset turnover has shown an increasing trend from 2.82 in 2019 to 3.56 in 2023. This suggests that the company has been able to generate more revenue relative to its investment in fixed assets, indicating improved efficiency in utilizing its long-term assets to drive sales.
In terms of total asset turnover, the ratio has also been on an upward trajectory from 0.54 in 2019 to 0.71 in 2023. This indicates that Tootsie Roll Industries has been able to generate more sales per dollar of total assets employed, reflecting increased efficiency in utilizing its overall assets to drive revenue.
Overall, the improving trends in both fixed asset turnover and total asset turnover ratios suggest that Tootsie Roll Industries has been effectively leveraging its long-term assets to drive sales growth and improve operational efficiency over the years, which could be a positive indicator of the company's long-term sustainable growth potential.