John Wiley & Sons (WLY)

Short-term

Turnover ratios

The activity ratios for John Wiley & Sons demonstrate the effectiveness of the company in managing its inventory, receivables, and payables over the past five years.

1. Inventory turnover:
The inventory turnover ratio has been consistently high, with values ranging from 40.50 to 63.68. This indicates that the company efficiently sells its inventory, generating revenue multiple times in a year. The increasing trend in inventory turnover suggests that John Wiley & Sons has been improving its inventory management processes over the years, leading to quicker inventory turnover and potentially lower holding costs.

2. Receivables turnover:
The receivables turnover ratio has also shown improvement over the years, increasing from 5.85 in 2020 to 8.34 in 2024. This indicates that the company is collecting its receivables more efficiently, turning accounts receivable into cash more quickly. A higher receivables turnover suggests effective credit management practices and timely collection of outstanding payments from customers.

3. Payables turnover:
The payables turnover ratio has fluctuated over the years but generally shows an increasing trend, from 17.98 in 2021 to 30.00 in 2024. This indicates that John Wiley & Sons is taking longer to settle its payables, which could be a reflection of improved cash flow management as the company may be optimizing its payment terms with suppliers. A higher payables turnover ratio suggests that the company is taking longer to pay its suppliers, potentially benefiting from favorable credit terms.

4. Working capital turnover:
Unfortunately, the table does not provide information on the working capital turnover ratio for John Wiley & Sons. This ratio evaluates how effectively the company utilizes its working capital to generate sales. Without this data, it is challenging to assess the efficiency of utilizing working capital.

Overall, the activity ratios reflect positively on the management of inventory, receivables, and payables by John Wiley & Sons, indicating improved efficiency in operational and financial processes over the years.

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Average number of days

Analyzing the activity ratios of John Wiley & Sons over the past five years reveals trends in its management of inventory, receivables, and payables.

1. Days of Inventory on Hand (DOH):
- The company has been efficiently managing its inventory over the years, as reflected by a decreasing trend in the DOH ratio from 8.02 days in 2020 to 5.73 days in 2024.
- A lower DOH indicates that John Wiley & Sons is selling its inventory faster, which can lead to reduced storage costs and lower risk of obsolescence.

2. Days of Sales Outstanding (DSO):
- The DSO ratio indicates how quickly the company collects payments from its customers. A lower DSO is generally favorable as it represents a shorter collection period.
- In this case, there has been a gradual improvement in DSO from 62.39 days in 2020 to 43.74 days in 2024, suggesting that the company has become more efficient in managing its receivables.

3. Number of Days of Payables:
- The trend in the number of days of payables indicates how quickly the company pays its suppliers. A higher number of days of payables may indicate better cash flow management.
- John Wiley & Sons has been extending its payment period to suppliers, as evidenced by the increase in the days of payables from 17.23 days in 2020 to 12.17 days in 2024.

Overall, the company's effective management of its activity ratios, specifically in inventory turnover, receivables collection, and payables, demonstrates improved operational efficiency and working capital management over the years.

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Long-term

John Wiley & Sons' long-term activity ratios, specifically the fixed asset turnover and total asset turnover, demonstrate the efficiency with which the company utilizes its assets to generate sales over the past five years.

The fixed asset turnover ratio has shown consistent improvement, increasing from 6.07 in 2020 to 9.72 in 2024. This indicates that the company is generating more revenue for each dollar invested in fixed assets, such as property, plant, and equipment. A higher fixed asset turnover ratio signifies efficient utilization and management of these long-term assets.

Similarly, the total asset turnover ratio has also been on an upward trend, rising from 0.57 in 2020 to 0.69 in 2024. This ratio measures the company's ability to generate sales in relation to its total assets. The increasing trend implies that John Wiley & Sons is becoming more efficient in utilizing its total assets to generate revenue.

Overall, the improvement in both the fixed asset turnover and total asset turnover ratios reflects positively on the company's operational efficiency and management of its long-term assets to drive sales growth.