Walgreens Boots Alliance Inc (WBA)

Activity ratios

Short-term

Turnover ratios

	Feb 29, 2024	Nov 30, 2023	Aug 31, 2023	May 31, 2023	Feb 28, 2023	Nov 30, 2022	Aug 31, 2022	May 31, 2022	Feb 28, 2022	Nov 30, 2021	Aug 31, 2021	May 31, 2021	Feb 28, 2021	Nov 30, 2020	Aug 31, 2020	May 31, 2020	Feb 29, 2020	Nov 30, 2019	Aug 31, 2019	May 31, 2019
Inventory turnover	19.07	15.58	18.15	18.00	16.40	15.16	16.08	15.68	14.91	14.00	16.74	12.34	12.67	9.92	13.58	14.68	14.02	12.70	14.24	12.74
Receivables turnover	23.29	23.81	25.96	23.40	23.38	27.39	26.41	26.68	25.39	22.53	24.12	26.61	28.31	17.93	19.50	19.81	18.25	18.41	18.87	18.76
Payables turnover	12.77	10.84	11.86	12.22	11.29	11.60	11.93	11.32	11.94	10.65	12.26	9.11	9.83	6.84	10.59	10.01	9.04	8.69	9.27	8.90
Working capital turnover	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—

In analyzing the activity ratios of Walgreens Boots Alliance Inc, the following trends can be observed:

1. Inventory Turnover:
- The inventory turnover ratio has generally seen fluctuations over the periods analyzed.
- There was an improvement in inventory management efficiency from November 2020 to November 2021 before a dip in the following quarters.
- The company managed to achieve a peak of 19.07 in February 2024, indicating a more rapid turnover of inventory.

2. Receivables Turnover:
- The receivables turnover ratio remained relatively stable and at a high level over the periods analyzed.
- This suggests that Walgreens Boots Alliance Inc is efficiently collecting outstanding receivables, with slight fluctuations but generally maintaining a strong performance in this area.

3. Payables Turnover:
- The payables turnover ratio also demonstrated stability with some minor fluctuations.
- The company maintained a consistent pace in managing its payables over the monitoring periods analyzed, showing an efficient approach to handling its obligations to suppliers.

4. Working Capital Turnover:
- The data for working capital turnover is missing in the provided table, indicating that this specific ratio was not calculated or reported for the periods involved.

In conclusion, Walgreens Boots Alliance Inc has shown varying levels of efficiency in managing its inventory, receivables, and payables over the analyzed periods, with a clear focus on maintaining a strong receivables turnover and stable payables turnover.

Average number of days

		Feb 29, 2024	Nov 30, 2023	Aug 31, 2023	May 31, 2023	Feb 28, 2023	Nov 30, 2022	Aug 31, 2022	May 31, 2022	Feb 28, 2022	Nov 30, 2021	Aug 31, 2021	May 31, 2021	Feb 28, 2021	Nov 30, 2020	Aug 31, 2020	May 31, 2020	Feb 29, 2020	Nov 30, 2019	Aug 31, 2019	May 31, 2019
Days of inventory on hand (DOH)	days	19.14	23.42	20.11	20.28	22.26	24.08	22.70	23.28	24.47	26.07	21.81	29.59	28.80	36.80	26.89	24.86	26.03	28.73	25.63	28.65
Days of sales outstanding (DSO)	days	15.67	15.33	14.06	15.60	15.61	13.33	13.82	13.68	14.37	16.20	15.13	13.72	12.89	20.35	18.71	18.42	20.00	19.82	19.35	19.45
Number of days of payables	days	28.57	33.68	30.77	29.88	32.34	31.47	30.58	32.23	30.58	34.26	29.76	40.09	37.13	53.37	34.45	36.48	40.36	42.00	39.39	41.00

The Days of Inventory on Hand (DOH) ratio for Walgreens Boots Alliance Inc has experienced some fluctuations over the past few quarters, ranging from 19.14 days to 36.80 days. A lower DOH indicates that the company is selling inventory more quickly, which can be positive for cash flow and profitability. However, a sudden increase in DOH, as seen in the most recent quarter compared to the previous quarter, may indicate potential issues with inventory management efficiency.

The Days of Sales Outstanding (DSO) ratio for Walgreens ranged from 12.89 days to 20.35 days over the same period. A lower DSO suggests that the company is collecting receivables faster, which is generally a positive sign. Despite some fluctuations, the DSO remained relatively stable over the quarters analyzed.

The Number of Days of Payables ratio for Walgreens Boots Alliance ranged from 29.76 days to 53.37 days. A higher number of days of payables indicates that the company is taking longer to pay its suppliers, which can sometimes signal liquidity or cash flow issues. The increase in this ratio over recent quarters may suggest that the company is stretching out its payables, potentially to manage cash flow or working capital.

Overall, analyzing these activity ratios provides insights into how effectively Walgreens Boots Alliance is managing its inventory, receivables, and payables. It is important for the company to strike the right balance in these areas to ensure smooth operations and optimal financial performance.

Long-term

	Feb 29, 2024	Nov 30, 2023	Aug 31, 2023	May 31, 2023	Feb 28, 2023	Nov 30, 2022	Aug 31, 2022	May 31, 2022	Feb 28, 2022	Nov 30, 2021	Aug 31, 2021	May 31, 2021	Feb 28, 2021	Nov 30, 2020	Aug 31, 2020	May 31, 2020	Feb 29, 2020	Nov 30, 2019	Aug 31, 2019	May 31, 2019
Fixed asset turnover	6.38	6.02	12.81	5.73	5.66	5.61	5.55	5.57	5.41	5.40	11.16	5.55	5.63	5.60	10.87	5.67	10.25	10.05	10.12	9.90
Total asset turnover	1.71	1.45	1.45	1.39	1.33	1.43	1.47	1.45	1.46	1.39	1.68	1.49	1.52	1.58	1.60	1.60	1.54	1.51	2.02	1.98

The fixed asset turnover ratio measures how efficiently a company utilizes its fixed assets to generate sales revenue. Looking at the data provided for Walgreens Boots Alliance Inc over various reporting periods, we observe fluctuations in the fixed asset turnover ratio.

The company demonstrated a relatively stable fixed asset turnover ratio around 5.5 to 6.5 over most reporting periods. However, there were notable spikes in the ratio, such as in August 2023 and May 2020, where the ratios were significantly higher at 12.81 and 10.87, respectively. These spikes indicate that during those periods, Walgreens Boots Alliance Inc was able to generate higher revenue utilizing its fixed assets more efficiently.

On the other hand, the total asset turnover ratio, which measures how efficiently a company generates sales revenue from all its assets, showed a more varying trend over the reporting periods. The total asset turnover ratio trended around 1.3 to 1.6 for most periods but saw some fluctuations, particularly in August 2023 and August 2021, where the ratios were higher at 1.47 and 1.68, respectively.

Overall, the fixed asset turnover ratios for Walgreens Boots Alliance Inc indicate relatively stable efficiency in utilizing fixed assets to generate sales, with occasional periods of significant improvement. The total asset turnover ratios varied more widely, reflecting fluctuations in the overall efficiency of generating sales revenue from all assets.