Vista Outdoor Inc (VSTO)

Short-term

Turnover ratios

Inventory turnover for Vista Outdoor Inc has been fluctuating over the past five years, ranging from a high of 5.72 in 2020 to a low of 3.66 in 2023. This ratio measures how efficiently the company is managing its inventory by selling and replacing stock. The decreasing trend from 2020 to 2023 may indicate potential inventory management issues, but the improvement in 2024 suggests progress in this area.

Receivables turnover has been relatively stable, with fluctuations between 5.47 in 2020 and 8.90 in 2023. This ratio reflects how quickly the company is collecting outstanding receivables from its customers. The consistently high turnover indicates that Vista Outdoor Inc is efficient in collecting payments from its customers.

Payables turnover has also shown variability, with a peak of 21.04 in 2020 and a low of 11.90 in 2021. This ratio measures how quickly the company pays its suppliers. A higher turnover indicates the company is paying its suppliers more frequently. Vista Outdoor Inc's payables turnover has fluctuated, potentially indicating changes in the company's payment policies or supplier relationships.

Working capital turnover has shown a consistent trend upward over the past five years, indicating that Vista Outdoor Inc has been able to generate sales revenue efficiently from its working capital. This ratio measures how effectively the company is using its working capital to generate revenue. The increasing trend demonstrates the company's ability to drive sales from its working capital.

In summary, Vista Outdoor Inc's activity ratios indicate mixed performance in inventory management, efficient collection of receivables, fluctuating payment patterns to suppliers, and a positive trend in utilizing working capital to generate revenue.

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Average number of days

Analyzing Vista Outdoor Inc's activity ratios over the past five years reveals interesting trends.

1. Days of Inventory on Hand (DOH):
- Vista Outdoor's DOH has been fluctuating over the years, ranging from a low of 63.85 days in 2020 to a high of 99.72 days in 2023.
- A decrease in DOH indicates efficient inventory management, allowing the company to sell its inventory faster.
- However, the increase in DOH in recent years suggests that Vista Outdoor may be holding excess inventory, which could tie up capital and lead to storage costs.

2. Days of Sales Outstanding (DSO):
- Vista Outdoor's DSO has varied, with the lowest figure of 41.01 days in 2023 and the highest of 66.72 days in 2020.
- A lower DSO indicates faster collection of receivables, leading to improved cash flow.
- The fluctuation in DSO may reflect changes in the company's credit policies or the creditworthiness of its customers.

3. Number of Days of Payables:
- Vista Outdoor's ability to make payments to suppliers has been consistent over the years, with fluctuations within a relatively narrow range.
- A longer period of payables may indicate that Vista Outdoor is taking advantage of trade credit terms, effectively managing its working capital.
- However, a significant increase in the number of days of payables could strain relationships with suppliers.

Overall, Vista Outdoor's activity ratios suggest that the company has been managing its inventory, receivables, and payables effectively. However, fluctuations in these ratios highlight the importance of continuous monitoring and adjustment to optimize working capital management.

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Long-term

Vista Outdoor Inc's long-term activity ratios provide insights into the efficiency of the company in generating sales using its fixed assets and total assets over the past five years.

1. Fixed Asset Turnover:
- The fixed asset turnover measures how effectively a company utilizes its fixed assets to generate sales revenue.
- Vista Outdoor Inc's fixed asset turnover has shown an increasing trend from 9.28 in 2020 to 13.62 in 2024.
- This indicates that the company has been able to generate more sales per dollar invested in fixed assets over the years.
- The higher fixed asset turnover ratio suggests that Vista Outdoor Inc has become more efficient in utilizing its fixed assets to generate revenue.

2. Total Asset Turnover:
- The total asset turnover ratio measures the company's ability to generate sales revenue from its total assets.
- Vista Outdoor Inc's total asset turnover has fluctuated between 1.08 and 1.26 over the past five years.
- The slight fluctuations in this ratio indicate that the company has been able to maintain a relatively stable level of efficiency in generating sales from its total assets.
- A total asset turnover ratio of around 1 implies that Vista Outdoor Inc generates approximately $1 in revenue for every $1 invested in total assets.

Overall, based on the long-term activity ratios, Vista Outdoor Inc has shown improvement in efficiently utilizing its fixed assets to generate sales revenue, while maintaining a relatively stable performance in generating revenue from its total assets over the past five years. This suggests a positive trend in the company's asset utilization efficiency.