Tyson Foods Inc (TSN)

Short-term

Turnover ratios

Tyson Foods Inc's activity ratios provide insight into how efficiently the company is managing its inventory, receivables, payables, and working capital.

1. Inventory Turnover:
Tyson Foods Inc's inventory turnover has been relatively stable over the past five years, ranging from 8.45 to 9.80 times. This indicates that the company is efficiently managing its inventory by selling and replacing goods multiple times throughout the year.

2. Receivables Turnover:
The receivables turnover for Tyson Foods Inc has also been consistent, ranging from 19.60 to 22.16 times. This reflects the company's ability to collect payments from customers quickly, which is essential for maintaining healthy cash flows.

3. Payables Turnover:
The payables turnover ratio has shown a similar trend, with values ranging from 18.21 to 20.68. A higher payables turnover ratio suggests that Tyson Foods Inc is paying its suppliers promptly, which can help maintain good relationships with vendors.

4. Working Capital Turnover:
Tyson Foods Inc's working capital turnover has varied significantly over the past five years, with values ranging from 10.74 to 23.79. A higher working capital turnover ratio indicates that the company is effectively utilizing its working capital to generate sales, which is crucial for sustaining business operations.

Overall, Tyson Foods Inc's activity ratios suggest that the company is effectively managing its operational efficiency in terms of inventory, receivables, payables, and working capital turnover.

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Average number of days

Activity ratios provide insights into how efficiently a company manages its assets and liabilities to generate revenue. Let's analyze Tyson Foods Inc's activity ratios over the past five years:

1. Days of Inventory on Hand (DOH): This ratio measures the number of days it takes for a company to convert its inventory into sales. A lower number is generally better as it indicates efficient inventory management. Tyson Foods Inc's DOH has ranged from 37.26 days to 43.18 days over the past five years, showing some fluctuation but generally staying within a reasonable range.

2. Days of Sales Outstanding (DSO): DSO measures how long it takes a company to collect revenue after making a sale. A lower DSO indicates faster cash collection. Tyson Foods Inc's DSO has ranged from 16.47 days to 18.62 days, with a slight increase in recent years. This suggests that the company may be taking slightly longer to collect its receivables.

3. Number of Days of Payables: This ratio indicates how long a company takes to pay its suppliers. A higher number of days of payables suggests that the company is taking longer to settle its payables, which can sometimes indicate favorable working capital management. Tyson Foods Inc's number of days of payables has ranged from 17.65 days to 20.04 days, showing some variability but generally maintaining a stable level.

Overall, Tyson Foods Inc's activity ratios show a mix of efficiency in managing inventory and payables, although there may be some room for improvement in accelerating the collection of receivables to enhance cash flow and liquidity. Continuously monitoring these ratios can help the company optimize its working capital management and overall operational efficiency.

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Long-term

The fixed asset turnover ratio measures how effectively a company utilizes its fixed assets to generate revenue. Tyson Foods Inc has shown a consistent performance in this aspect over the past five years, with values ranging from 5.49 to 6.13, indicating that the company efficiently generates sales using its fixed assets.

On the other hand, the total asset turnover ratio reflects how well a company utilizes all its assets to generate revenue. Tyson Foods Inc's total asset turnover has been relatively stable, ranging from 1.25 to 1.46. This suggests that the company effectively generates sales in relation to its total assets, with a slight decline observed in the most recent year.

Overall, both the fixed asset turnover and total asset turnover ratios indicate that Tyson Foods Inc has been successful in utilizing its assets to generate revenue efficiently over the past five years. The company's strong performance in asset turnover ratios reflects effective asset management and operational efficiency.