John Wiley & Sons (WLY)

Short-term

Turnover ratios

The activity ratios of John Wiley & Sons over the provided periods reveal notable trends and patterns that reflect aspects of operational efficiency and asset management.

Inventory Turnover:
The company's inventory turnover ratio demonstrates a consistent upward trend, increasing from 14.70 times as of April 30, 2021, to 19.15 times in 2022, and further rising to 22.53 times in 2023. In 2024, the ratio slightly decreased to 22.11. This pattern indicates an improvement in inventory management efficiency, with inventory being sold and replenished more frequently over time. Such an increase suggests optimized inventory levels relative to sales, potentially reducing holding costs and improving liquidity.

Receivables Turnover:
Receivables turnover ratios also show a positive trajectory, moving from 6.23 times in 2021 to 6.27 times in 2022, and then increasing to 6.51 times in 2023. A significant jump is observed in 2024, with the ratio reaching 8.35. This suggests an enhancement in the collection process, leading to faster conversion of receivables into cash. An increasing receivables turnover ratio typically indicates more efficient credit policies and improved cash flow management.

Payables Turnover:
Payables turnover ratios fluctuate over the analyzed periods, starting at 6.53 times in 2021, rising to 9.05 times in 2022, and then decreasing slightly to 8.21 times in 2023. In 2024, the ratio increases again to 10.42. Higher payables turnover ratios denote more frequent payments to suppliers, which could reflect either increased operational liquidity or altered payment policies. The upward trend in 2024 suggests an acceleration in settling liabilities, potentially indicating strong liquidity position or strategic payment timing to optimize cash flow.

Working Capital Turnover:
Data for working capital turnover is unavailable across all periods, preventing analysis of this ratio's trend or implications.

Overall Analysis:
The observed trends in inventory and receivables turnover ratios indicate a period of increased operational efficiency, with faster inventory turnover and improved receivables collection. The fluctuating but generally upward movement in payables turnover suggests a responsiveness to operational liquidity or strategic payment practices. Collectively, these ratios point toward a potentially healthier and more efficient asset management profile for John Wiley & Sons during the analyzed timeframe. However, the absence of working capital turnover data limits a comprehensive assessment of overall working capital utilization.

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Average number of days

The activity ratios for John Wiley & Sons over the period from April 2021 through April 2024 reveal notable trends in the company's operational efficiency and working capital management.

Days of Inventory on Hand (DOH):
The DOH has demonstrated a consistent decline over the analyzed period, decreasing from 24.83 days as of April 2021 to 16.20 days in April 2023. This reduction indicates that the company has been managing its inventory more efficiently, potentially reducing holding costs and aligning inventory levels more closely with sales activity. The slight increase to 16.51 days in April 2024 suggests a stabilization at a lower inventory period, reflecting continued focus on inventory management without significant build-up.

Days of Sales Outstanding (DSO):
The DSO metric shows a downward trend, decreasing from 58.58 days in April 2021 to 56.04 days in April 2023, and further down to 43.69 days in April 2024. This decline indicates improvement in the collection efficiency of receivables, leading to faster cash inflows. Such a trend enhances liquidity and reduces the working capital tied up in accounts receivable.

Number of Days of Payables:
The payables period exhibits fluctuation but an overall reduction from 55.91 days in April 2021 to 44.44 days in April 2023, and further down to 35.04 days in April 2024. This indicates that the company has been paying its suppliers more quickly over time, possibly reflecting improved cash flow position or strategic changes in payment policies.

Overall Observation:
The combined trend of decreasing DOH, DSO, and days of payables suggests that John Wiley & Sons has been pursuing efforts to streamline its working capital and improve operational efficiency. The reduction in inventory holding days and receivable days indicates a more responsive and prompt collection process, while the shorter payables period reflects faster settlement of liabilities. These developments are consistent with a company aiming to optimize cash flow and enhance liquidity management. However, the absence of data beyond April 2024 limits a comprehensive analysis of potential future trends.

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Long-term

The analysis of John Wiley & Sons' long-term activity ratios reveals insights into the company's efficiency in utilizing its fixed assets and total assets over the specified period.

The Fixed Asset Turnover ratio indicates how effectively the company is generating revenue from its fixed assets. From April 30, 2021, to April 30, 2023, this ratio experienced a decline from 9.66 to 5.43, suggesting a decrease in the efficiency of fixed asset utilization during this period. This downward trend may reflect either increased investment in fixed assets that has yet to translate into proportional revenue, or potential inefficiencies in using these assets.

In the subsequent year, April 30, 2023, to April 30, 2024, the ratio improved slightly to 5.97, indicating a modest recovery in fixed asset efficiency. Nonetheless, it remains considerably lower than the 2021 level, pointing to sustained challenges in maximizing fixed asset productivity.

The Total Asset Turnover ratio shows a steady upward trajectory from 0.56 in 2021 to 0.65 in 2023, and further to 0.69 in 2024. This trend suggests that the company has been gradually enhancing its overall asset utilization, converting a larger proportion of its total assets into revenue. The increasing ratio over this period reflects ongoing improvements in operational efficiency at the aggregate asset level.

Overall, while the company has demonstrated a positive trend in total asset utilization, as indicated by the rising total asset turnover, the decline in fixed asset turnover highlights potential concerns regarding the efficiency of fixed asset deployment. Continued focus on optimizing fixed asset use or portfolio management may be necessary to sustain long-term operational effectiveness.