US Foods Holding Corp (USFD)

Short-term

Turnover ratios

US Foods Holding Corp has shown consistent improvement in its inventory turnover ratio over the five-year period, indicating that the company has been efficient in managing its inventory and converting it into sales. The receivables turnover ratio has also remained relatively stable, reflecting the company's ability to collect outstanding payments from customers in a timely manner.

In terms of payables turnover, there has been some fluctuation in the ratio over the years, but it appears that the company has been effectively managing its payments to suppliers. The working capital turnover ratio has displayed significant variability, with a notable increase in 2023 compared to the previous years, suggesting that the company has been able to generate sales more efficiently relative to its working capital.

Overall, the activity ratios for US Foods Holding Corp demonstrate effective management of inventory, receivables, payables, and working capital, indicating sound operational efficiency and financial performance.

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Average number of days

Days of inventory on hand (DOH) measures how efficiently a company manages its inventory. A lower DOH indicates that the company is selling inventory quickly. US Foods Holding Corp's DOH has improved over the last five years, decreasing from 20.45 days in 2019 to 16.72 days in 2023. This suggests that the company is managing its inventory more effectively.

Days of sales outstanding (DSO) indicates how quickly the company collects payments from customers. A lower DSO is favorable as it means the company is collecting receivables faster. US Foods Holding Corp's DSO has fluctuated slightly over the years, from 20.62 days in 2019 to 19.19 days in 2023. This indicates a relatively stable collection process.

Number of days of payables shows the time it takes for the company to pay its suppliers. A higher number of days of payables is beneficial as it signifies that the company is taking longer to pay its creditors. US Foods Holding Corp's number of days of payables has increased, from 20.85 days in 2019 to 21.44 days in 2023. This may indicate that the company is utilizing its cash resources more effectively by delaying payments to suppliers.

Overall, US Foods Holding Corp has shown improvements in inventory management efficiency and supplier payment terms, while maintaining a stable collection process over the past five years. These trends suggest that the company is effectively managing its working capital and operational activities.

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Long-term

The long-term activity ratios of US Foods Holding Corp indicate the efficiency with which the company is utilizing its long-term assets to generate sales revenue.

1. Fixed Asset Turnover:
- The fixed asset turnover ratio has exhibited a relatively consistent trend over the past five years, remaining above 10 in all years.
- The ratio peaked in 2022 at 15.57, indicating that for every dollar invested in fixed assets, the company generated $15.57 in sales revenue.
- Despite minor fluctuations, the company has maintained a high level of efficiency in utilizing its fixed assets to generate revenue.

2. Total Asset Turnover:
- The total asset turnover ratio also reflects a positive trend, increasing from 1.82 in 2020 to 2.67 in 2023.
- This indicates that the company has been effectively utilizing its total assets to generate sales, with a higher ratio suggesting improved efficiency.
- The significant improvement in the total asset turnover ratio over the years may signal increased operational efficiency and improved asset utilization.

Overall, both the fixed asset turnover and total asset turnover ratios of US Foods Holding Corp demonstrate a consistent level of efficiency in utilizing long-term assets to generate sales revenue. The increasing trend in the total asset turnover ratio signifies improved operational efficiency and effective asset utilization over the years.