Vestis Corporation (VSTS)

Short-term

Turnover ratios

The activity ratios for Vestis Corporation provide insights into the efficiency of its operations over the past four years.

1. Inventory Turnover:
- The inventory turnover ratio has shown a consistent increasing trend over the years, from 3.17 in 2020 to 3.43 in 2023.
- This indicates that Vestis Corporation has been able to sell its inventory more frequently each year, which could imply effective inventory management and demand forecasting.

2. Receivables Turnover:
- Unfortunately, data for the receivables turnover ratio is not provided for any of the years, making it difficult to assess how efficiently Vestis Corporation is collecting its accounts receivable.

3. Payables Turnover:
- Similarly, details on the payables turnover ratio are not available, so we cannot evaluate how quickly Vestis Corporation is paying its suppliers.

4. Working Capital Turnover:
- The working capital turnover ratio has shown some fluctuations but has generally remained above 4 for all four years.
- A higher working capital turnover ratio indicates that Vestis Corporation is generating revenue efficiently in relation to its working capital, which could be a positive indicator of operational efficiency.

Overall, based on the available data, Vestis Corporation seems to be effectively managing its inventory and working capital to drive its business activities. However, a more comprehensive analysis incorporating data on receivables and payables turnover would provide a more complete picture of the company's operational efficiency.

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Average number of days

Days of inventory on hand (DOH) for Vestis Corporation have decreased over the past four years, from 115.17 days in 2021 to 106.29 days in 2023. This indicates that the company is managing its inventory more efficiently, taking fewer days to sell its inventory. A decreasing trend in DOH is generally positive as it implies a faster turnover of inventory and potentially lower carrying costs.

The data for Days of sales outstanding (DSO) and Number of days of payables are not provided, so it is not possible to analyze the efficiency of Vestis Corporation in collecting receivables or managing payables for the given years.

Overall, based on the improving trend in the Days of inventory on hand (DOH) ratio, Vestis Corporation appears to be effectively managing its inventory levels over the years. Further information on DSO and days of payables would provide a more comprehensive analysis of the company's overall liquidity and operating efficiency.

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Long-term

The long-term activity ratios of Vestis Corporation, as reflected by the fixed asset turnover and total asset turnover ratios, have shown an improving trend over the last three years.

Starting with the fixed asset turnover ratio, the company's ability to generate sales from its fixed assets has been consistently increasing, from 3.32 in 2021 to 3.91 in 2023. This indicates that Vestis Corporation has been more efficient in utilizing its fixed assets to generate revenue, which is generally seen as a positive sign of operational performance and asset utilization.

Similarly, the total asset turnover ratio has also exhibited an upward trend, rising from 0.79 in 2020 to 0.89 in 2023. This ratio measures the efficiency of the company in generating sales from all its assets, including both fixed and current assets. The increase in this ratio signifies that Vestis Corporation has been more effective in utilizing its total assets to generate revenue over the years.

Overall, the improving long-term activity ratios of Vestis Corporation suggest that the company has been able to enhance its operational efficiency and asset utilization, which can contribute to the overall financial health and performance of the organization.