USANA Health Sciences Inc (USNA)

Short-term

Turnover ratios

The activity ratios of USANA Health Sciences Inc provide insights into the efficiency of the company's operations in managing its inventory, receivables, payables, and working capital.

1. Inventory Turnover: The inventory turnover ratio indicates how many times the company sells and replaces its inventory within a specific period. USANA's inventory turnover has shown a consistent increase over the years, with the ratio reaching a peak of 7.36 times by September 30, 2023, before slightly decreasing to 6.11 by December 31, 2024. This suggests that the company is efficiently managing its inventory levels and turning over its inventory at a faster rate.

2. Receivables Turnover: The receivables turnover ratio measures how efficiently the company collects outstanding receivables from its customers. USANA's receivables turnover was not available for most of the periods, except for December 31, 2020, and subsequent years. The turnover ratio improved from 153.34 on December 31, 2020, to 104.15 by December 31, 2024. This indicates that the company has been able to collect its receivables more effectively over time.

3. Payables Turnover: The payables turnover ratio reflects how quickly the company pays its suppliers. USANA's payables turnover ratio fluctuated but generally increased from 15.87 on March 31, 2020, to 35.55 by December 31, 2024. The higher turnover suggests that the company is efficiently managing its payables, possibly negotiating better payment terms with suppliers.

4. Working Capital Turnover: The working capital turnover ratio shows how effectively the company utilizes its working capital to generate sales. USANA's working capital turnover decreased from 6.50 on March 31, 2020, to 6.14 by December 31, 2024. A decreasing trend in this ratio may indicate declining efficiency in utilizing working capital to drive sales.

In summary, USANA Health Sciences Inc has demonstrated improvements in its inventory turnover and receivables turnover ratios, indicating better inventory management and collections from customers. The payables turnover ratio has also shown an upward trend, suggesting efficient management of payables. However, the working capital turnover ratio has declined over the years, signaling a potential need for the company to enhance its working capital management to boost sales efficiency.

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Average number of days

The analysis of USANA Health Sciences Inc activity ratios reveals the following trends:

1. Days of Inventory on Hand (DOH):
- The DOH decreased steadily from 117.80 days on March 31, 2020, to 59.75 days on December 31, 2024, indicating an improvement in inventory management efficiency.
- The company has been able to reduce the number of days it holds inventory on hand, which may suggest better control over production and sales cycles.

2. Days of Sales Outstanding (DSO):
- DSO, also known as accounts receivable turnover, fluctuated over the years with no specific trend observed due to missing data points in various quarters.
- The available data shows a decrease in DSO from 2.38 days on December 31, 2020, to 3.50 days on December 31, 2024, which may indicate a faster collection of receivables over the years.

3. Number of Days of Payables:
- The number of days of payables decreased from 23.00 days on March 31, 2020, to 10.27 days on December 31, 2024, indicating a significant improvement in the company's payment policies and possibly better negotiating terms with suppliers.
- A lower number of days of payables suggests that the company is paying its suppliers more quickly, which could strengthen vendor relationships and potentially lead to better terms in the future.

Overall, the trends in the activity ratios of USANA Health Sciences Inc demonstrate a positive shift towards better inventory management, efficient collection of receivables, and improved payment practices.

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Long-term

The fixed asset turnover ratio of USANA Health Sciences Inc has been relatively stable in the range of 8.82 to 12.86 over the past few years, indicating the company's ability to generate sales from its fixed assets. The highest turnover was recorded in June 2021, while the lowest was in September 2024. This suggests that the company has efficiently utilized its fixed assets to generate revenue.

On the other hand, the total asset turnover ratio has shown a declining trend from 2.23 in March 2020 to 1.14 in December 2024. This indicates a decrease in the company's ability to generate sales from its total assets over the years. A lower total asset turnover may imply that the company's assets are not being effectively used to generate revenue.

Overall, while the fixed asset turnover ratio reflects efficient utilization of fixed assets for revenue generation, the declining trend in total asset turnover raises concerns about the company's overall asset efficiency and effective utilization of resources.