USANA Health Sciences Inc (USNA)

Short-term

Turnover ratios

Inventory Turnover:

USANA Health Sciences Inc's inventory turnover has shown a fluctuating trend over the past five years, ranging from 5.07 to 7.09. A higher inventory turnover ratio indicates that the company is efficiently managing its inventory levels and selling products effectively.

Receivables Turnover:

The receivables turnover ratio for USANA Health Sciences Inc has decreased consistently over the last five years, from 166.16 to 104.20. A declining receivables turnover may suggest changes in the company's credit policies or difficulties in collecting payments from customers.

Payables Turnover:

The payables turnover ratio for USANA Health Sciences Inc has increased steadily from 25.92 to 35.55 over the five-year period. A higher payables turnover ratio indicates that the company is paying its suppliers more frequently, potentially benefiting from favorable credit terms.

Working Capital Turnover:

USANA Health Sciences Inc's working capital turnover has shown some variation, with the ratio ranging from 3.09 to 6.14. A higher working capital turnover ratio typically indicates that the company is effectively utilizing its working capital to generate revenue.

Overall, the analysis of USANA Health Sciences Inc's activity ratios suggests that the company has been efficient in managing its inventory, though there may be areas for improvement in managing receivables and working capital effectively.

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Average number of days

Based on the provided data, we can analyze the activity ratios of USANA Health Sciences Inc as follows:

1. Days of Inventory on Hand (DOH):
- The company's inventory turnover has shown a decreasing trend over the years, from 69.83 days in 2020 to 59.75 days in 2024.
- This indicates that the company is taking slightly longer to sell its inventory, which could potentially tie up more capital in inventory.

2. Days of Sales Outstanding (DSO):
- USANA's accounts receivable turnover has been increasing gradually, from 2.38 days in 2020 to 3.50 days in 2024.
- This suggests that the company is collecting receivables more slowly, which may lead to cash flow challenges if not managed effectively.

3. Number of Days of Payables:
- The number of days of payables has been decreasing consistently, from 14.08 days in 2020 to 10.27 days in 2024.
- This indicates that the company is paying its suppliers more quickly, possibly to take advantage of discounts or maintain good relationships with vendors.

In summary, USANA Health Sciences Inc's activity ratios show a mixed performance over the years. The company has seen a decline in inventory turnover and an increase in accounts receivable turnover, while also paying its suppliers more promptly. Management should closely monitor these ratios to ensure efficient utilization of resources and maintain healthy working capital management.

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Long-term

USANA Health Sciences Inc's long-term activity ratios reflect its efficiency in utilizing fixed assets and total assets over the years.

1. Fixed Asset Turnover:
- The Fixed Asset Turnover ratio indicates how efficiently the company generates revenue from its fixed assets. USANA Health Sciences Inc's Fixed Asset Turnover has shown a consistent upward trend from 2020 to 2021, indicating an improvement in utilizing its fixed assets to generate sales.
- However, there was a slight decline in the Fixed Asset Turnover ratio from 2021 to 2022, and a more significant decrease in subsequent years. This suggests a potential decline in the productivity or effectiveness of the company's fixed assets in generating revenue.
- Despite the decrease in the later years, USANA Health Sciences Inc still maintains relatively high Fixed Asset Turnover ratios, indicating that the company is efficient in utilizing its fixed assets to generate sales, although there may be room for improvement.

2. Total Asset Turnover:
- The Total Asset Turnover ratio measures how effectively the company generates revenue relative to its total assets. USANA Health Sciences Inc's Total Asset Turnover ratio has fluctuated over the years.
- There was a significant increase in Total Asset Turnover from 2020 to 2021, indicating that the company was able to generate more revenue per dollar of total asset investment during that period.
- However, there was a decline in Total Asset Turnover from 2021 to 2022 and further decreases in the following years. This suggests a potential decrease in the company's overall efficiency in generating revenue from its total assets.
- The decreasing trend in Total Asset Turnover ratios may indicate a need for USANA Health Sciences Inc to reassess its asset utilization strategies and improve efficiency in generating revenue relative to its total asset base.

In conclusion, while USANA Health Sciences Inc has demonstrated relatively high efficiency in generating revenue from its fixed assets, there are fluctuations and declines in both Fixed Asset Turnover and Total Asset Turnover ratios over the years, indicating potential challenges in maintaining or improving asset utilization efficiency. Further analysis and strategic adjustments may be needed to enhance the company's long-term performance in asset utilization.