Wingstop Inc (WING)

Short-term

Turnover ratios

Based on the provided data, Wingstop Inc's activity ratios can be analyzed as follows:

1. Inventory Turnover:
- The inventory turnover ratio measures how efficiently a company manages its inventory. Wingstop Inc's inventory turnover has fluctuated over the years, with a high of 341.02 in 2022 and a low of 253.33 in 2021. However, there is missing data for 2024. A higher inventory turnover ratio indicates that Wingstop is selling its inventory more frequently.

2. Receivables Turnover:
- The receivables turnover ratio reflects how quickly Wingstop collects on its credit sales. The ratio has generally decreased from 50.48 in 2020 to 31.83 in 2024. A declining trend in the receivables turnover ratio could indicate potential issues with collecting payments from customers promptly.

3. Payables Turnover:
- The payables turnover ratio assesses how quickly Wingstop pays its suppliers. Wingstop's payables turnover has varied, reaching a peak of 36.03 in 2023. A higher payables turnover ratio suggests that Wingstop is managing its payables effectively by paying suppliers quickly.

4. Working Capital Turnover:
- The working capital turnover ratio measures Wingstop's efficiency in utilizing its working capital to generate sales. The ratio has seen fluctuations, with a significant decrease from 11.23 in 2020 to 2.03 in 2024. A lower working capital turnover ratio may indicate inefficiencies in utilizing working capital resources.

In conclusion, Wingstop Inc's activity ratios highlight fluctuations in inventory turnover, receivables turnover, payables turnover, and working capital turnover over the years. It is essential for Wingstop to closely monitor these ratios to ensure efficient management of inventory, timely collection of receivables, effective payment of payables, and optimal utilization of working capital.

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Average number of days

Based on the provided data for Wingstop Inc's activity ratios:

1. Days of Inventory on Hand (DOH):
- Wingstop's Days of Inventory on Hand have shown a fluctuating trend over the years, ranging from 1.07 days to 1.44 days.
- The company has maintained a low level of inventory on hand, which indicates efficient management of inventory and potentially lower risk of obsolete inventory.

2. Days of Sales Outstanding (DSO):
- Wingstop's Days of Sales Outstanding have been increasing gradually over the years, with values ranging from 7.23 days to 11.47 days.
- A higher DSO suggests that it takes Wingstop longer to collect payments from customers, which could indicate issues with accounts receivable management or potentially loosening credit policies.

3. Number of Days of Payables:
- The Number of Days of Payables for Wingstop have shown some variability, ranging from 10.13 days to 16.12 days.
- A higher number of days of payables indicates that Wingstop takes longer to pay its suppliers, which could be a strategic move to manage working capital effectively or a reflection of negotiation power with suppliers.

Overall, the analysis of Wingstop Inc's activity ratios suggests that the company is managing its inventory efficiently but may need to focus on improving its accounts receivable collection process to shorten the DSO. The varying number of days of payables indicates changes in the company's relationship with its suppliers or its approach to managing payables.

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Long-term

Wingstop Inc's fixed asset turnover ratio, which measures the efficiency of the company in generating sales from its fixed assets, has shown a decreasing trend from 8.90 in December 2020 to 4.97 in December 2024. This indicates that the company may be less efficient in utilizing its fixed assets to generate revenue over the years.

In contrast, the total asset turnover ratio, which gives an insight into the company's ability to generate revenue from all its assets, fluctuated over the period. It decreased from 1.18 in December 2020 to 0.84 in December 2022, before increasing to 1.22 in December 2023, and then dropping to 0.87 in December 2024. This pattern suggests variability in Wingstop Inc's overall asset utilization efficiency, possibly influenced by changes in the company's asset base or revenue generation strategies.

Overall, the declining trend in fixed asset turnover and the fluctuations in total asset turnover highlight the importance for Wingstop Inc to closely monitor and manage its asset utilization efficiency to support its long-term financial performance and growth.