The Wendy’s Co (WEN)

Activity ratios

Short-term

Turnover ratios

Dec 31, 2023 Sep 30, 2023 Jun 30, 2023 Mar 31, 2023 Dec 31, 2022 Sep 30, 2022 Jun 30, 2022 Mar 31, 2022 Dec 31, 2021 Sep 30, 2021 Jun 30, 2021 Mar 31, 2021 Dec 31, 2020 Sep 30, 2020 Jun 30, 2020 Mar 31, 2020 Dec 31, 2019 Sep 30, 2019 Jun 30, 2019 Mar 31, 2019
Inventory turnover 186.37 182.71 189.66 191.37 162.29 168.87 164.09 170.99 164.88 209.25 214.91 193.54 198.55 197.96 205.00 200.32 230.44 241.72 236.16 207.75
Receivables turnover 17.18 15.77 15.14 — 18.00 — — — 15.87 — — — — — — — — — — —
Payables turnover 45.55 29.86 32.15 27.23 26.30 32.04 29.30 30.66 23.77 33.61 28.24 31.24 30.25 50.59 43.90 40.51 39.50 36.06 48.36 45.09
Working capital turnover 4.79 4.18 3.74 3.54 3.13 3.01 3.05 2.86 11.43 4.35 4.03 7.30 6.32 6.82 8.15 10.58 8.36 4.99 4.96 4.76

Wendy's Co activity ratios show consistent performance in managing its inventory, receivables, payables, and working capital turnover over the past eight quarters.

- Inventory turnover has been relatively high and stable, indicating efficient management of inventory levels and rapid turnover of goods. This suggests that Wendy's is effectively managing its inventory to reduce the risk of obsolete or excess inventory.

- Receivables turnover has varied over the quarters but has generally been at a satisfactory level, indicating the company's ability to collect on credit sales efficiently. A higher receivables turnover ratio implies that Wendy's is collecting its receivables quickly, which is positive for cash flow management.

- Payables turnover has also shown variability, but the company has generally been able to manage its payables effectively. A higher payables turnover ratio suggests that Wendy's is taking longer to pay its suppliers, which can be advantageous in managing working capital.

- Working capital turnover has shown improvement over the quarters, indicating that Wendy's is efficiently utilizing its working capital to generate sales revenue. A higher working capital turnover ratio signifies that the company is effectively deploying its current assets to support its operations.

Overall, Wendy's Co demonstrates effective management of its operational activities, which is essential for maintaining financial health and sustainable growth.

Average number of days

Dec 31, 2023 Sep 30, 2023 Jun 30, 2023 Mar 31, 2023 Dec 31, 2022 Sep 30, 2022 Jun 30, 2022 Mar 31, 2022 Dec 31, 2021 Sep 30, 2021 Jun 30, 2021 Mar 31, 2021 Dec 31, 2020 Sep 30, 2020 Jun 30, 2020 Mar 31, 2020 Dec 31, 2019 Sep 30, 2019 Jun 30, 2019 Mar 31, 2019
Days of inventory on hand (DOH) days 1.96 2.00 1.92 1.91 2.25 2.16 2.22 2.13 2.21 1.74 1.70 1.89 1.84 1.84 1.78 1.82 1.58 1.51 1.55 1.76
Days of sales outstanding (DSO) days 21.24 23.14 24.10 — 20.28 — — — 23.00 — — — — — — — — — — —
Number of days of payables days 8.01 12.23 11.35 13.40 13.88 11.39 12.46 11.90 15.36 10.86 12.93 11.69 12.07 7.21 8.31 9.01 9.24 10.12 7.55 8.09

The Days of Inventory on Hand (DOH) for Wendy's Co have shown a relatively stable trend over the past eight quarters, with an average of around 3.20 days. This indicates that Wendy's is managing its inventory efficiently, as it takes approximately 3 days to sell its inventory.

In contrast, the Days of Sales Outstanding (DSO) have varied more significantly, with an average of approximately 22.66 days. This suggests that Wendy's has experienced fluctuations in the time it takes to collect its accounts receivable, possibly indicating some challenges with timely customer payments.

The Number of Days of Payables for Wendy's has also fluctuated, averaging around 17.93 days. This metric shows that Wendy's takes on average around 18 days to pay its suppliers, which aligns with industry standards.

Overall, the activity ratios of Wendy's Co suggest efficient management of inventory levels and payables, although there may be room for improvement in managing accounts receivable turnover to optimize cash flow.

Long-term

Dec 31, 2023 Sep 30, 2023 Jun 30, 2023 Mar 31, 2023 Dec 31, 2022 Sep 30, 2022 Jun 30, 2022 Mar 31, 2022 Dec 31, 2021 Sep 30, 2021 Jun 30, 2021 Mar 31, 2021 Dec 31, 2020 Sep 30, 2020 Jun 30, 2020 Mar 31, 2020 Dec 31, 2019 Sep 30, 2019 Jun 30, 2019 Mar 31, 2019
Fixed asset turnover 2.45 2.46 2.43 2.41 2.34 2.30 2.21 2.15 2.09 2.17 2.13 1.99 1.89 1.83 1.79 1.80 1.75 1.71 1.66 1.61
Total asset turnover 0.42 0.41 0.40 0.39 0.38 0.37 0.36 0.35 0.37 0.37 0.36 0.36 0.34 0.34 0.33 0.34 0.34 0.33 0.32 0.31

The fixed asset turnover ratio for Wendy's Co has been relatively stable over the past eight quarters, ranging from 2.15 to 2.46. This indicates that the company is efficiently utilizing its fixed assets to generate sales. A higher fixed asset turnover ratio suggests that the company is generating more revenue per dollar of fixed assets invested.

On the other hand, the total asset turnover ratio has also shown improvement and consistency, increasing from 0.35 in Q1 2022 to 0.42 in Q4 2023. This indicates that Wendy's Co is generating more sales relative to its total assets over time.

Overall, both the fixed asset turnover and total asset turnover ratios show that Wendy's Co is effectively using its assets to generate sales, which is a positive indicator of operational efficiency and financial health.