US Foods Holding Corp (USFD)

Short-term

Turnover ratios

Based on the provided data, let's analyze the activity ratios of US Foods Holding Corp:

1. Inventory Turnover:
- The inventory turnover ratio measures how many times a company's inventory is sold and replaced over a period.
- The ratio has shown a general increasing trend from 18.29 in 2020 to 22.92 in 2024, indicating a more efficient management of inventory.
- A higher inventory turnover ratio suggests that US Foods Holding Corp is selling its products quickly and efficiently.

2. Receivables Turnover:
- Receivables turnover ratio reflects how effectively a company is collecting its accounts receivable.
- The trend shows a slight decrease from 20.91 in 2020 to 19.35 in 2024.
- A declining ratio may suggest potential issues with collecting payments from customers or changes in credit policies.

3. Payables Turnover:
- Payables turnover ratio measures how efficiently a company pays its suppliers.
- The trend indicates a gradual decrease from 19.11 in 2020 to 16.71 in 2024.
- A decreasing ratio might imply that the company is taking longer to pay its suppliers, which could impact relationships with vendors.

4. Working Capital Turnover:
- Working capital turnover ratio evaluates how efficiently a company is utilizing its working capital to generate sales.
- The ratio has shown a substantial increase from 15.28 in 2020 to 55.85 in 2024.
- A rising ratio suggests that US Foods Holding Corp is effectively using its working capital to generate revenue.

Overall, the analysis of these activity ratios indicates that US Foods Holding Corp has been effectively managing its inventory, collections, payments to suppliers, and working capital, which are essential for maintaining operational efficiency and financial health.

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Average number of days

Based on the provided data for US Foods Holding Corp, let's analyze the activity ratios:

1. Days of Inventory on Hand (DOH):
- The DOH measures how many days it takes for a company to sell its inventory. From 2020 to 2024, US Foods Holding Corp has shown a decreasing trend in DOH, indicating improved efficiency in managing inventory. The company reduced its DOH from 19.96 days in 2020 to 15.92 days in 2024, suggesting a faster turnover of inventory.

2. Days of Sales Outstanding (DSO):
- DSO reflects how long it takes for a company to collect its accounts receivable. The DSO remained relatively stable over the years, fluctuating slightly between 17.46 days in 2020 and 18.86 days in 2024. This consistency may indicate a steady invoicing and collection process for US Foods Holding Corp.

3. Number of Days of Payables:
- This ratio measures how long a company takes to pay its suppliers. US Foods Holding Corp's days of payables increased slightly from 19.10 days in 2020 to 21.85 days in 2024. A longer payable period may suggest favorable payment terms with suppliers or potential liquidity management strategies.

Overall, the trends in these activity ratios suggest that US Foods Holding Corp has been effectively managing its inventory turnover, accounts receivable collection, and supplier payment cycles over the years, contributing to operational efficiency and potentially improving cash flow management.

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Long-term

The long-term activity ratios provide insights into how efficiently US Foods Holding Corp is utilizing its assets to generate sales revenue.

1. Fixed Asset Turnover:
- The fixed asset turnover ratio measures how well the company is utilizing its fixed assets to generate sales. A higher ratio indicates better efficiency in asset utilization.
- US Foods Holding Corp's fixed asset turnover has shown a consistent increasing trend from 11.21 in 2020 to 15.79 in 2024. This indicates that the company has been increasingly efficient in generating sales revenue using its fixed assets.
- The consistent improvement in the fixed asset turnover ratio suggests that the company is effectively managing and utilizing its long-term assets to drive revenue growth.

2. Total Asset Turnover:
- The total asset turnover ratio measures how efficiently the company is using all of its assets to generate sales. A higher ratio indicates better utilization of assets to generate revenue.
- US Foods Holding Corp's total asset turnover has increased steadily from 1.82 in 2020 to 2.82 in 2024. This indicates that the company has been able to generate more sales revenue for every dollar of total assets over the years.
- The increasing trend in the total asset turnover ratio suggests that the company is effectively leveraging its total asset base to drive sales growth and improve overall operational efficiency.

In summary, US Foods Holding Corp has demonstrated significant improvements in both fixed asset turnover and total asset turnover ratios over the years, indicating effective utilization of assets to generate sales revenue and improve operational efficiency.