United Natural Foods Inc (UNFI)

Short-term

Turnover ratios

United Natural Foods Inc.'s activity ratios provide insight into how effectively the company is managing its resources to generate sales and optimize its working capital.

The inventory turnover ratio has been relatively stable, averaging around 10.5 over the last eight quarters. This indicates that the company is efficiently managing its inventory levels and converting them into sales. A higher inventory turnover ratio implies faster inventory sell-through, reducing the risk of obsolete inventory and freeing up cash flow.

The receivables turnover ratio shows a consistent trend of around 30, indicating that the company is efficient in collecting its accounts receivable. The higher the receivables turnover, the quicker the company can collect payment from its customers, improving cash flow and reducing the risk of bad debts.

In terms of payables turnover, United Natural Foods Inc. has a relatively stable ratio averaging around 14, indicating that the company takes an average of 14 days to pay its suppliers. This suggests that the company is managing its payables effectively, striking a balance between timely payments and optimizing cash flow.

The working capital turnover ratio reflects how efficiently the company is using its working capital to generate sales. United Natural Foods Inc.'s ratio has been improving, averaging around 22 over the last eight quarters. A higher working capital turnover ratio indicates that the company is generating more revenue for each dollar of working capital invested, showcasing effective resource utilization.

Overall, the activity ratios of United Natural Foods Inc. suggest that the company is effectively managing its resources, inventory, receivables, payables, and working capital to drive sales and improve operational efficiency.

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Average number of days

United Natural Foods Inc.'s activity ratios can provide valuable insights into how efficiently the company manages its inventory, receivables, and payables.

1. Days of Inventory on Hand (DOH):
- In Q2 2024, UNFI had 32.17 days of inventory on hand, indicating that the company takes approximately 32 days to sell its entire inventory.
- The trend shows a decreasing pattern from Q1 2023 to Q2 2024, which suggests that UNFI has been effectively managing its inventory levels to improve liquidity and reduce carrying costs.

2. Days of Sales Outstanding (DSO):
- DSO measures how long it takes for the company to collect payments from its customers.
- In Q2 2024, UNFI had 11.95 days of sales outstanding, indicating that the company collects receivables in about 12 days.
- The trend shows fluctuations over the quarters, but overall, the DSO has been relatively stable and lower than inventory holding periods, which is positive for cash flow management.

3. Number of Days of Payables:
- Payables days represent the average time it takes for UNFI to pay its suppliers.
- In Q2 2024, the company had 23.97 days of payables, suggesting that UNFI takes nearly 24 days to pay its suppliers.
- The trend appears steady with minor fluctuations across the quarters, indicating consistent payment practices.

Overall, UNFI's activity ratios reflect a balance in managing its inventory, receivables, and payables efficiently. The decreasing trend in DOH and stable DSO and payables indicate effective management of working capital and a potential focus on improving cash flow and liquidity.

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Long-term

United Natural Foods Inc. has consistently high fixed asset turnover ratios, ranging from 17.12 to 17.50 over the past eight quarters. This indicates that the company is efficient in generating sales revenue from its fixed assets, such as property, plant, and equipment. The consistently high fixed asset turnover ratios suggest that United Natural Foods is effectively utilizing its fixed assets to generate sales.

In terms of total asset turnover, the company has shown a relatively stable performance over the same period, with ratios ranging from 3.59 to 4.09. This indicates that United Natural Foods is efficient in generating sales revenue from its total assets, including both fixed and current assets. A higher total asset turnover ratio generally indicates better asset utilization by the company to generate sales.

Overall, the consistent high fixed asset turnover ratios and relatively stable total asset turnover ratios suggest that United Natural Foods Inc. is effectively managing its assets to generate sales revenue. These ratios reflect positively on the efficiency and productivity of the company's asset utilization, which is a key indicator of financial performance and operational effectiveness.