Ufp Industries Inc (UFPI)

Short-term

Turnover ratios

Activity ratios are key indicators of how efficiently a company is managing its assets and liabilities to generate revenue. Let's analyze Ufp Industries Inc's activity ratios over the past five years:

1. Inventory Turnover:
- The inventory turnover ratio measures how many times a company's inventory is sold and replaced over a period. Ufp Industries Inc's inventory turnover has been relatively consistent, ranging from 7.50 to 8.05. This indicates that the company efficiently manages its inventory levels and turnover.

2. Receivables Turnover:
- The receivables turnover ratio shows how many times a company collects its accounts receivable during a specific period. Ufp Industries Inc's receivables turnover has shown a fluctuating trend, with significant variations across the years. However, it generally increased from 10.82 in 2020 to 14.79 in 2022 before slightly decreasing in 2023.

3. Payables Turnover:
- The payables turnover ratio reflects how quickly a company pays its suppliers. Ufp Industries Inc's payables turnover has also varied over the past five years, with a significant decrease in 2021 followed by an increase in 2022 and 2023. A higher payables turnover ratio may indicate that the company is efficiently managing its accounts payable.

4. Working Capital Turnover:
- The working capital turnover ratio measures how effectively a company utilizes its working capital to generate sales revenue. Ufp Industries Inc's working capital turnover has shown a decreasing trend, dropping from 6.66 in 2021 to 3.73 in 2023. This may suggest a decreasing efficiency in utilizing working capital to support sales growth.

In summary, Ufp Industries Inc's activity ratios indicate that the company effectively manages its inventory and accounts receivable turnover. However, there are fluctuations in payables turnover and a decreasing trend in working capital turnover, which may require further analysis to understand the underlying reasons and implications for the company's financial performance.

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Average number of days

Activity ratios assess how efficiently a company manages its assets and liabilities to generate sales. Analyzing the activity ratios of Ufp Industries Inc over the five-year period provides insights into the company's inventory management, accounts receivable collection, and accounts payable process.

- Days of inventory on hand (DOH) measures how long, on average, inventory remains in stock before being sold. Ufp Industries Inc's DOH has fluctuated slightly over the years but generally has been between 45 to 49 days. A lower DOH indicates faster inventory turnover, which may signify efficient inventory management.

- Days of sales outstanding (DSO) reveals how long it takes, on average, for the company to collect payment from customers after making a sale. Ufp Industries Inc's DSO has varied between 24 to 34 days. A lower DSO suggests the company is prompt in collecting payments, contributing to better cash flow management.

- Number of days of payables measures how long it takes, on average, for the company to pay its suppliers. Ufp Industries Inc's payables period has also fluctuated but generally has ranged from 9 to 18 days. A longer payables period can indicate favorable credit terms with suppliers, allowing the company to maintain cash for other uses.

Overall, Ufp Industries Inc has shown relatively stable activity ratios over the years, indicating a reasonable balance in managing its inventory, receivables, and payables. However, further analysis and comparison with industry benchmarks would provide a more comprehensive understanding of the company's operational efficiency.

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Long-term

The long-term activity ratios of Ufp Industries Inc indicate how efficiently the company is utilizing its assets to generate revenue over the years.

1. Fixed asset turnover:
- The fixed asset turnover ratio measures how efficiently the company is using its fixed assets to generate sales. A higher ratio indicates better utilization of fixed assets. Ufp Industries Inc's fixed asset turnover has been fluctuating over the years, ranging from 9.30 in 2023 to 11.41 in 2019.
- The ratios have generally been at a high level, reflecting effective management of fixed assets to generate revenue. The decrease from 13.97 in 2022 to 9.30 in 2023 may suggest a decrease in the utilization of fixed assets for revenue generation.

2. Total asset turnover:
- The total asset turnover ratio measures how effectively the company is using all its assets to generate revenue. A higher ratio signifies efficient asset utilization. Ufp Industries Inc's total asset turnover has shown variability over the years, with values ranging from 1.80 in 2023 to 2.66 in 2021.
- The trend indicates fluctuations in the efficiency of total asset turnover, with a notable decrease from 2.66 in 2021 to 1.80 in 2023. This decline in total asset turnover may suggest a decrease in the company's overall efficiency in utilizing its assets to generate revenue.

Overall, while Ufp Industries Inc has demonstrated effective utilization of fixed assets for revenue generation, there have been fluctuations in the efficiency of total asset turnover. Further analysis and consideration of the business environment are needed to assess the implications of these fluctuations on the company's long-term financial performance.