Walgreens Boots Alliance Inc (WBA)

Short-term

Turnover ratios

Looking at the activity ratios of Walgreens Boots Alliance Inc over the past five years, we can observe the following trends:

1. Inventory Turnover:
- The inventory turnover ratio has generally been increasing over the years, indicating that the company is managing its inventory more efficiently. This implies that Walgreens Boots Alliance has been selling its inventory more quickly and effectively, reducing the risk of obsolete or slow-moving stock.

2. Receivables Turnover:
- The receivables turnover ratio has shown some fluctuations but has generally been stable over the years. A high receivables turnover ratio signifies that the company is efficient in collecting its accounts receivable from customers, leading to improved cash flow and liquidity.

3. Payables Turnover:
- The payables turnover ratio has been fluctuating but has been relatively consistent over the period. A lower payables turnover ratio suggests that Walgreens Boots Alliance takes longer to pay its suppliers, potentially indicating strong bargaining power or favorable credit terms with vendors.

4. Working Capital Turnover:
- Unfortunately, the data for working capital turnover is not provided for analysis. This ratio could have provided insights into how effectively the company is utilizing its working capital to generate sales.

In conclusion, based on the activity ratios provided, Walgreens Boots Alliance Inc seems to have effectively managed its inventory, receivables, and payables turnover over the past five years. These ratios indicate that the company is efficiently managing its working capital and operations to support its business activities. It would be beneficial to monitor these ratios continuously to assess the company's operational efficiency and financial health.

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Average number of days

The activity ratios of Walgreens Boots Alliance Inc over the past five years show fluctuations in its efficiency in managing inventory, accounts receivable, and accounts payable.

1. Days of Inventory on Hand (DOH):
- The DOH ratio indicates how many days, on average, it takes for the company to sell its inventory. A lower DOH value is generally favorable as it suggests efficient inventory turnover.
- The trend for Walgreens Boots Alliance Inc shows improvement from 2020 to 2024, with a decrease in the number of days of inventory on hand. This suggests better inventory management efficiency.

2. Days of Sales Outstanding (DSO):
- The DSO ratio reflects how many days, on average, it takes for the company to collect payments from its customers. A lower DSO value indicates better accounts receivable management.
- Walgreens Boots Alliance Inc has shown relatively stable DSO ratios over the past five years, with minor fluctuations. This indicates a consistent performance in collecting payments from customers.

3. Number of Days of Payables:
- The number of days of payables metric represents the average number of days it takes for the company to pay its suppliers. A higher number of days may indicate the company is taking longer to settle its payables.
- Walgreens Boots Alliance Inc's days of payables have shown a slight increasing trend from 2020 to 2024, indicating a potential delay in settling its payables over the years.

In conclusion, Walgreens Boots Alliance Inc has demonstrated improvements in inventory management efficiency, stable performance in accounts receivable management, and a potential delay in settling payables. Monitoring and managing these activity ratios are crucial for the company to maintain operational efficiency and liquidity.

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See also:

Walgreens Boots Alliance Inc Short-term (Operating) Activity Ratios

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Long-term

The long-term activity ratios of Walgreens Boots Alliance Inc, as indicated by the fixed asset turnover and total asset turnover, show variations over the past five years.

1. Fixed Asset Turnover:
- The fixed asset turnover ratio measures how efficiently the company generates revenue from its fixed assets. A higher ratio indicates better utilization of fixed assets to generate sales.
- In 2024, the fixed asset turnover ratio increased to 16.43 from 12.88 in 2023, indicating a significant improvement in the efficiency of utilizing fixed assets to generate sales.
- However, there was a notable decline in the ratio in 2022 to 5.57, followed by an increase in 2023 and further improvement in 2024.
- Overall, the company has shown fluctuations in utilizing fixed assets efficiently to generate revenue over the past five years.

2. Total Asset Turnover:
- The total asset turnover ratio measures how effectively the company utilizes its total assets to generate sales. It indicates the company's overall efficiency in generating revenue from its total asset base.
- The total asset turnover ratio fluctuated over the past five years, with the highest ratio of 1.84 in 2024 and the lowest of 1.45 in 2023.
- The increase in the total asset turnover ratio in 2024 suggests improved efficiency in utilizing total assets to generate sales compared to the previous years.
- The company's ability to generate sales with its total asset base has shown variability, but the improvement in 2024 indicates a positive trend in asset utilization efficiency.

In conclusion, while the fixed asset turnover ratio exhibited fluctuations, the total asset turnover ratio showed an overall improvement in efficiency in generating sales from the total asset base, particularly in the most recent year. Monitoring these ratios will be important to assess the company's ongoing performance in effectively utilizing its assets to drive revenue growth.

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See also:

Walgreens Boots Alliance Inc Long-term (Investment) Activity Ratios