Unifirst Corporation (UNF)

Short-term

Turnover ratios

Unifirst Corporation's inventory turnover has shown consistent performance over the past two years, ranging between 7.44 and 12.34 times. This indicates that the company efficiently manages its inventory levels, with a higher number reflecting a quicker turnover of goods. The increasing trend in inventory turnover from 2021 to 2024 suggests improving efficiency in managing inventory.

The receivables turnover ratio demonstrates how effectively Unifirst Corporation collects its accounts receivable. It has ranged between 7.56 and 9.48 times over the past two years, with a generally stable performance. A higher turnover ratio indicates that the company is able to collect outstanding receivables more rapidly.

Unifirst Corporation's payables turnover ratio, ranging from 14.03 to 20.70 times, illustrates the company's ability to settle payables within a certain period. The higher turnover ratios indicate that Unifirst is efficiently managing its accounts payable by paying suppliers promptly.

The working capital turnover ratio, reflecting how effectively the company utilizes its working capital to generate sales, shows a consistent performance between 2.15 and 3.94 times over the past two years. An increasing trend in this ratio suggests improved efficiency in utilizing working capital to generate revenue.

Overall, Unifirst Corporation demonstrates efficient management of inventory, receivables, payables, and working capital based on the analysis of its activity ratios over the past two years.

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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) indicate that Unifirst has been effectively managing its inventory levels over time, with the number of days gradually decreasing from 36.25 days to 32.33 days. This suggests that Unifirst is selling its inventory at a faster rate, which can potentially lead to lower carrying costs and improved cash flow.

Days of Sales Outstanding (DSO) measure the average number of days it takes for the company to collect revenue from its customers. Unifirst's DSO has fluctuated slightly over the periods, ranging from 38.50 days to 47.62 days. A decreasing trend in DSO would indicate more efficient collection of receivables, while an increasing trend may signal potential issues with credit policies or collection processes.

Number of Days of Payables reflects the average number of days it takes for Unifirst to pay its suppliers. The company has maintained a relatively stable payment period, with minor fluctuations between 17.63 days and 26.02 days. A longer payment period can benefit cash flow management, as long as it does not strain supplier relationships.

Overall, the analysis of Unifirst Corporation's activity ratios suggests that the company has been effectively managing its inventory, receivables, and payables over the periods, indicating efficient operations and potential improvements in working capital management.

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Long-term

The fixed asset turnover ratio for Unifirst Corporation has been relatively stable over the analyzed periods, ranging from 2.95 to 3.09, with an average of approximately 3.02. This indicates that the company generates around $3 in sales for every dollar invested in fixed assets. The consistent performance of this ratio suggests efficient utilization of fixed assets to drive revenue generation.

On the other hand, the total asset turnover ratio has shown a slight upward trend over the same periods, fluctuating between 0.77 and 0.91, with an average of approximately 0.84. This indicates that Unifirst Corporation generates sales equal to around 84% of its total assets on average. The increasing trend in total asset turnover signifies improved efficiency in utilizing all assets, both fixed and current, to generate sales revenue.

Overall, the company's effective management of both fixed and total assets is reflected in these ratios, highlighting its ability to generate revenue efficiently relative to its asset base.