Unifirst Corporation (UNF)

Short-term

Turnover ratios

Unifirst Corporation's activity ratios reflect its efficiency in managing its assets and liabilities.

- Inventory turnover has been relatively stable over the past few periods, averaging around 9-10 times per year. This indicates that the company is able to sell and replace its inventory efficiently, which is a positive sign for its operations.

- Receivables turnover has also shown consistency, hovering around 7-9 times per year. This suggests that Unifirst Corporation is efficient in collecting payments from customers, which is important for maintaining cash flow.

- Payables turnover has shown some fluctuations but generally remains at a healthy level, averaging around 15-18 times per year. This indicates that the company is managing its payables effectively, possibly taking advantage of trade credit terms.

- Working capital turnover has shown a slight increase over the periods, indicating that Unifirst Corporation is generating more revenue relative to its working capital. This can be a positive sign of operational efficiency and effective use of resources.

Overall, Unifirst Corporation's activity ratios suggest that the company is effectively managing its assets and liabilities to support its operations and maintain a healthy financial position.

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Average number of days

Unifirst Corporation's activity ratios provide insights into the efficiency of the company's operations.

Days of Inventory on Hand (DOH) indicates the number of days it takes for the company to sell its inventory. Unifirst's DOH has fluctuated over the periods, with a recent figure of 36.79 days, indicating that the company held approximately 36.79 days' worth of inventory. The downward trend from 48.48 days in Feb 2022 to 36.79 days in Feb 2024 suggests an improvement in inventory management efficiency.

Days of Sales Outstanding (DSO) measures how quickly the company collects receivables from customers. Unifirst's DSO averaged around 45 days in the most recent period, indicating that it takes the company approximately 45 days to collect payments from customers. The trend has been relatively stable, with some minor fluctuations within a narrow range, suggesting a consistent collection process.

Number of Days of Payables shows how long the company takes to pay its suppliers. Unifirst's payables days ranged from 17.63 to 26.02 days, with the most recent figure at 20.06 days. The consistent management of payables over time indicates the company's ability to manage its cash flow effectively by balancing timely payments to suppliers.

Overall, Unifirst Corporation has shown improvement in inventory management efficiency, consistent collection processes, and effective management of payables, reflective of a sound operational performance in the periods analyzed.

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Long-term

Based on the data provided, Unifirst Corporation's long-term activity ratios, namely fixed asset turnover and total asset turnover, show the efficiency of the company in generating sales from its assets.

1. Fixed Asset Turnover:
- Unifirst Corporation's fixed asset turnover has been relatively stable over the period under review, with values ranging between 2.95 and 3.18.
- This ratio indicates that, on average, the company generates around 3 times in sales for every dollar invested in fixed assets.
- The consistent performance of the fixed asset turnover suggests that Unifirst Corporation is effectively utilizing its fixed assets to contribute to revenue generation.

2. Total Asset Turnover:
- Unifirst Corporation's total asset turnover has shown a slight increasing trend over the period analyzed, with values moving from 0.77 to 0.90.
- The total asset turnover ratio signifies that the company is generating approximately 0.88 times in sales for every dollar invested in total assets.
- The upward trend in total asset turnover indicates an improvement in the company's efficiency in utilizing its total asset base to generate sales.

Overall, Unifirst Corporation's long-term activity ratios suggest that the company is efficiently utilizing its assets to generate revenue, as both the fixed asset turnover and total asset turnover ratios have remained relatively stable or improved over the period reviewed. This indicates effective asset management and operational efficiency within the company.