Wolverine World Wide Inc (WWW)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Inventory turnover | 3.67 | 2.17 | 3.79 | 4.34 | 3.88 |
| Receivables turnover | 9.72 | 11.11 | 7.56 | 6.68 | 6.87 |
| Payables turnover | 6.65 | 5.93 | 6.24 | 5.71 | 6.68 |
| Working capital turnover | 14.41 | 17.32 | 16.76 | 3.60 | 12.65 |
Inventory turnover measures how efficiently a company manages its inventory. Wolverine World Wide Inc's inventory turnover has fluctuated over the past five years, ranging from a low of 2.17 in 2022 to a high of 4.34 in 2020, with a current ratio of 3.67 in 2023. This suggests that the company is currently taking longer to sell its inventory compared to 2020 but has improved from 2022.
Receivables turnover indicates how quickly a company collects its outstanding accounts receivable. Wolverine World Wide Inc's receivables turnover has been relatively stable over the five-year period, ranging from 6.68 in 2020 to 11.11 in 2022, with a ratio of 9.72 in 2023. This indicates that the company is collecting its receivables at a decent pace.
Payables turnover measures how efficiently a company pays its suppliers. Wolverine World Wide Inc's payables turnover has fluctuated over the years, with a current ratio of 6.65 in 2023. This indicates that the company is paying its suppliers more frequently than in previous years, which can impact cash flow management.
Working capital turnover reflects how effectively a company utilizes its working capital to generate sales. Wolverine World Wide Inc's working capital turnover has varied significantly over the five-year period, with a ratio of 14.41 in 2023. This suggests that the company is efficiently using its working capital to generate revenue, especially compared to 2020.
Overall, Wolverine World Wide Inc's activity ratios show mixed performance in managing inventory, collecting receivables, paying suppliers, and utilizing working capital over the past five years. Monitoring and analyzing these ratios can provide insights into the company's operational efficiency and financial health.
Average number of days
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 99.51 | 168.48 | 96.32 | 84.07 | 94.15 |
| Days of sales outstanding (DSO) | days | 37.56 | 32.86 | 48.31 | 54.68 | 53.17 |
| Number of days of payables | days | 54.87 | 61.54 | 58.53 | 63.97 | 54.65 |
Wolverine World Wide Inc's activity ratios provide insight into how effectively the company manages its inventory, accounts receivable, and accounts payable.
1. Days of Inventory on Hand (DOH): The trend in DOH shows significant fluctuations over the years. In 2023 and 2021, the company improved its inventory management compared to previous years, with 99.51 days and 96.32 days respectively. This indicates that in 2023, the company was holding fewer days' worth of inventory on hand compared to previous years. A lower DOH suggests more efficient inventory turnover and potentially better liquidity.
2. Days of Sales Outstanding (DSO): DSO measures how long it takes for the company to collect payments from customers. The trend in DSO shows a decrease in 2023 to 37.56 days from 32.86 days in 2022. This indicates that Wolverine World Wide Inc has been collecting payments from customers more quickly in the most recent year. A decreasing DSO can imply stronger cash flow management and a more efficient accounts receivable process.
3. Number of Days of Payables: The trend in the number of days of payables shows fluctuations over the years. In 2023, the company reduced its payables period to 54.87 days from 61.54 days in 2022. A shorter payable period may imply that the company is paying its suppliers more quickly. However, it could also indicate a negotiation strategy or changes in working capital management.
Overall, Wolverine World Wide Inc has shown improvements in inventory management and accounts receivable collection in 2023. However, the company should continue monitoring and optimizing its activity ratios to ensure efficient working capital management and sustainable operations.
Long-term
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Fixed asset turnover | 23.29 | 19.71 | 18.72 | 14.37 | 16.13 |
| Total asset turnover | 1.09 | 1.08 | 0.93 | 0.84 | 0.92 |
The long-term activity ratios of Wolverine World Wide Inc indicate the company's efficiency in utilizing its fixed assets and total assets to generate sales over the past five years.
The fixed asset turnover ratio has shown a generally increasing trend from 2019 to 2023, reaching a high of 23.29 in 2023. This suggests that Wolverine World Wide Inc has been able to generate higher sales relative to its investment in fixed assets, indicating improved efficiency in asset utilization. The company has been effectively leveraging its fixed assets to drive revenue growth over the years.
The total asset turnover ratio has also been gradually increasing over the same period, reaching 1.09 in 2023. This indicates that Wolverine World Wide Inc has been able to generate more sales for each dollar of total assets invested, reflecting improved efficiency in utilizing its total asset base to drive sales growth.
Overall, the increasing trends in both fixed asset turnover and total asset turnover ratios suggest that Wolverine World Wide Inc has been effectively managing its assets to drive revenue growth and optimize its operational performance over the past five years.