Ufp Industries Inc (UFPI)

Short-term

Turnover ratios

Ufp Industries Inc's activity ratios provide insight into the efficiency of the company's operations.

1. Inventory Turnover: The inventory turnover ratio indicates how effectively Ufp Industries is managing its inventory. A higher ratio is generally preferred as it signifies that the company is selling goods quickly. Ufp Industries saw a slight fluctuation in its inventory turnover over the years, ranging from 7.50 to 8.05. This suggests that the company was able to sell and replenish its inventory at a steady pace.

2. Receivables Turnover: Unfortunately, there is no data available for Ufp Industries' receivables turnover, making it challenging to assess how efficiently the company is collecting on its credit sales.

3. Payables Turnover: Similarly, there is no data provided for Ufp Industries' payables turnover, which would have indicated how efficiently the company is managing its payments to suppliers.

4. Working Capital Turnover: The working capital turnover ratio indicates how efficiently Ufp Industries is utilizing its working capital to generate sales. A higher ratio suggests better utilization of resources. Over the years, the company's working capital turnover ratio varied significantly, ranging from 3.73 to 8.89. This indicates fluctuations in how effectively the company converted working capital into sales.

Overall, while the inventory turnover ratio shows a relatively stable trend indicating efficient inventory management, the lack of data for receivables and payables turnover limits a comprehensive assessment of Ufp Industries' overall liquidity and efficiency in managing its working capital.

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Average number of days

Ufp Industries Inc's activity ratios provide insights into how efficiently the company manages its inventory, collects its receivables, and pays its suppliers.

1. Days of Inventory on Hand (DOH):
- The DOH measures how many days, on average, inventory is held before being sold.
- Over the five-year period, Ufp Industries Inc's DOH has ranged from 45.33 days to 48.64 days, indicating relatively stable inventory management.
- A decreasing trend in DOH, as seen from 2022 to 2023, suggests that the company is managing its inventory more efficiently, which could lead to lower holding costs and potentially higher turnover.

2. Days of Sales Outstanding (DSO):
- The DSO ratio is not available in the provided data, making it challenging to evaluate how quickly the company collects its receivables.
- A lower DSO indicates a shorter time for receivables to be collected, which can improve cash flows and reduce the risk of bad debts.

3. Number of Days of Payables:
- The number of days of payables is also unavailable in the data, preventing an analysis of the company's payment terms with suppliers.
- A higher number of days of payables may suggest that the company is able to defer payments to suppliers, potentially improving short-term cash flows.

Overall, based on the available information, Ufp Industries Inc appears to manage its inventory efficiently, but a lack of data on DSO and payables hinders a comprehensive assessment of its overall activity ratios.

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Long-term

Ufp Industries Inc's fixed asset turnover ratio, which reflects the efficiency of the company in generating sales from its fixed assets, has shown an increasing trend over the years. In 2020, the ratio stood at 12.35, indicating that for every dollar invested in fixed assets, the company generated $12.35 in sales. This ratio increased further to 14.66 in 2021, denoting improved utilization of fixed assets for revenue generation. By the end of 2022, the ratio slightly decreased to 13.97 but still remained at a relatively high level, showcasing the company's ability to efficiently utilize its fixed assets.

In contrast, the total asset turnover ratio, which measures the firm's ability to generate sales from all its assets, declined from 2.14 in 2020 to 1.60 in 2024. This downward trend suggests that the company may not be generating as much revenue relative to its total asset base over the years. Moreover, the decreasing trend in total asset turnover could indicate inefficiencies in asset utilization or potential challenges in maximizing sales from the total asset base.

Overall, the analysis of Ufp Industries Inc's long-term activity ratios reveals a positive trend in fixed asset turnover, indicating effective utilization of fixed assets for revenue generation. However, the declining trend in total asset turnover signals a potential inefficiency in utilizing the company's total asset base to generate sales, which might need further investigation and strategic adjustments.