Universal Corporation (UVV)

Short-term

Turnover ratios

Universal Corporation's inventory turnover has shown some fluctuations over the years, ranging from 1.58 to 2.06. This ratio indicates how efficiently the company is managing its inventory levels. A higher inventory turnover is generally preferred as it suggests faster sales or more efficient inventory management.

The receivables turnover ratio has varied as well, from 4.66 to 6.20, indicating how quickly the company is collecting its receivables. A higher turnover ratio is typically favorable as it implies that the company is able to collect outstanding payments more efficiently.

In terms of payables turnover, Universal Corporation has shown an increasing trend from 10.06 to 23.98, reflecting how quickly the company is paying off its trade payables. A higher payables turnover may indicate that the company is taking longer to pay its suppliers, which could potentially strain supplier relationships.

The working capital turnover has also been increasing steadily, from 1.57 to 2.10, demonstrating how effectively the company is utilizing its working capital to generate sales. A higher working capital turnover ratio suggests that Universal Corporation is efficiently using its current assets to support its revenue generation activities.

Overall, Universal Corporation's activity ratios indicate varying efficiencies in managing inventory, receivables, payables, and working capital over the years, which may require further analysis to understand the underlying reasons for these fluctuations.

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Average number of days

Universal Corporation's Days of Inventory on Hand (DOH) has shown some fluctuations over the past five years. In particular, there was an increase in inventory days from 218.97 days in March 2022 to 231.48 days in March 2024. However, the most recent data as of March 31, 2025, indicates a decrease to 177.34 days, which may suggest more efficient management of inventory levels.

The Days of Sales Outstanding (DSO) metric reflects the average number of days it takes for the company to collect revenue after a sale. Universal Corporation's DSO remained relatively stable between 58.84 days in March 2023 and 78.39 days in March 2025. This increase could imply a potential issue with timely collections or changes in customer payment behavior that warrants further analysis.

On the accounts payable side, the Number of Days of Payables indicates how long it takes the company to pay its suppliers. Universal Corporation has managed to reduce its payables days from 36.29 days in March 2022 to 15.22 days in March 2025. This reduction could be a strategic move to optimize cash flow or negotiate better payment terms with suppliers, but it may also indicate potential strain on supplier relationships if payment terms become too stringent.

Overall, analyzing these activity ratios together provides insights into Universal Corporation's efficiency in managing inventory, collecting sales revenue, and paying suppliers over the past five years. Further investigation and comparison with industry benchmarks can help assess the company's operational performance and liquidity position.

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Long-term

The long-term activity ratios for Universal Corporation provide insights into how effectively the company is utilizing its assets to generate sales over time.

1. Fixed Asset Turnover:
- The fixed asset turnover ratio indicates how efficiently the company is utilizing its fixed assets to generate revenue.
- From 2021 to 2025, the fixed asset turnover ratio has shown an increasing trend, starting at 5.67 in 2021, reaching 6.10 in 2022, and further improving to 7.32 in 2023. However, complete data for 2024 and 2025 is not available.
- A higher fixed asset turnover ratio indicates that Universal Corporation is generating more revenue per dollar invested in fixed assets, which is a positive sign of operational efficiency and asset utilization.

2. Total Asset Turnover:
- The total asset turnover ratio measures how efficiently the company is using all its assets to generate sales.
- The total asset turnover ratio has fluctuated over the years, from 0.85 in 2021 to 0.99 in 2025, with a noticeable peak in 2023 at 0.97.
- A higher total asset turnover ratio indicates that Universal Corporation is generating more sales relative to its total assets, which can be a sign of effective asset management and revenue generation.

Overall, an increasing trend in fixed asset turnover and varying total asset turnover ratios suggest that Universal Corporation has been improving its asset utilization and generating more revenue relative to its assets. However, it is important to continue monitoring these ratios to ensure sustained operational efficiency and effective management of assets.