United Natural Foods Inc (UNFI)

Short-term

Turnover ratios

United Natural Foods Inc has shown a consistent improvement in its inventory turnover ratio over the past five years, indicating that the company is managing its inventory more efficiently. The receivables turnover ratio has also improved over the years, suggesting that the company is collecting its receivables at a faster rate.

Furthermore, the payables turnover ratio has remained relatively stable over the years, indicating consistent payment practices with suppliers. The working capital turnover ratio has shown an upward trend, reflecting an increase in sales generated from the company's working capital.

Overall, the activity ratios suggest that United Natural Foods Inc is effectively managing its inventory, receivables, payables, and working capital to support its operations and drive its financial performance.

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Average number of days

Analyzing the activity ratios of United Natural Foods Inc provides insights into its efficiency in managing inventory, collecting receivables, and paying off its obligations.

1. Days of Inventory on Hand (DOH):
- The trend in DOH indicates that UNFI has been improving its inventory management efficiency over the past five years.
- Lower DOH values compared to previous years suggest that the company is holding less inventory for shorter durations, which can lead to cost savings and reduced risk of obsolescence.

2. Days of Sales Outstanding (DSO):
- The DSO values show a fluctuating trend, with some improvements seen in recent years.
- A decreasing DSO means that UNFI is collecting its receivables more quickly, which is a positive sign indicating efficient credit management and strong customer payment practices.

3. Number of Days of Payables:
- The number of days of payables has shown a consistent decreasing trend over the years, indicating that UNFI is taking longer to pay its suppliers.
- While extending payable days can improve cash flow management in the short term, it may strain supplier relationships if not managed carefully.

Overall, the analysis of activity ratios suggests that United Natural Foods Inc has been making efforts to enhance its operational efficiency by reducing inventory holding periods, improving receivables collection, and managing payables effectively. Monitoring these ratios over time can provide valuable insights into the company's working capital management.

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Long-term

United Natural Foods Inc has shown consistent improvement in its fixed asset turnover ratio over the past five years, with the ratio increasing from 15.46 in 2020 to 17.18 in 2024. This indicates that the company is generating more revenue relative to its investment in fixed assets each year.

In terms of total asset turnover, the company has also exhibited a positive trend, increasing from 3.47 in 2020 to 4.12 in 2024. This suggests that United Natural Foods Inc is becoming more efficient in generating sales relative to its total assets.

Overall, the company's long-term activity ratios indicate a steady improvement in asset utilization efficiency, as both fixed asset turnover and total asset turnover have increased over the past five years. This signals effective management of assets to drive revenue growth and operational efficiency.