American Eagle Outfitters Inc (AEO)

Short-term

Turnover ratios

American Eagle Outfitters Inc's activity ratios provide insights into how efficiently the company manages its assets and liabilities.

1. Inventory turnover: This ratio indicates American Eagle's ability to sell its inventory. The trend shows fluctuations, but generally, the inventory turnover has been relatively stable, with values ranging from 6.15 to 10.33. An increasing trend in recent periods suggests that the company is managing its inventory effectively and selling its products at a faster rate.

2. Receivables turnover: This ratio reflects how quickly American Eagle collects payments from its customers. The values have been consistently high, ranging from 17.77 to 55.52. The increasing trend in recent periods is a positive sign, indicating that the company is efficient in collecting receivables, which helps maintain healthy cash flow.

3. Payables turnover: This ratio measures how quickly American Eagle pays its suppliers. The values have varied, but generally, they have been relatively stable, ranging from 10.67 to 26.81. The decreasing trend in recent periods can be a concern as it may indicate a slowdown in payment to suppliers, potentially impacting relationships with vendors.

4. Working capital turnover: This ratio evaluates how effectively American Eagle utilizes its working capital to generate sales. The values have fluctuated, with some periods showing significant variations. However, the upward trend in recent periods, with values reaching as high as 16.28, suggests that the company has been efficient in using its working capital to drive revenue growth.

Overall, the activity ratios of American Eagle Outfitters Inc demonstrate a mixed performance, with some areas showing improvement while others may require closer attention to sustain operational efficiency and profitability.

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Average number of days

American Eagle Outfitters Inc's activity ratios provide insights into the efficiency of its operations.

1. Days of Inventory on Hand (DOH): Over the past few quarters, American Eagle has shown fluctuations in its ability to manage inventory. The number of days of inventory on hand ranged from a low of 35.34 days to a high of 59.35 days. The company's inventory management improved in Q1 2022 with only 35.34 days of inventory on hand, suggesting efficient sales and inventory turnover. However, this ratio increased in subsequent quarters, indicating potential inventory management challenges.

2. Days of Sales Outstanding (DSO): American Eagle's collection efficiency remained relatively stable over the quarters, with DSO ranging from 9.67 days to 20.54 days. The company improved its collections process in Q1 2021 with only 9.67 days of sales outstanding, indicating effective credit management and timely collection from customers. However, there was a slight increase in DSO in later quarters, suggesting a potential slowdown in collections.

3. Number of Days of Payables: American Eagle's payable days have been fluctuating, ranging from 13.62 days to 34.20 days. The company extended its payment period in Q3 2020 with 14.84 days of payables, which improved its cash flow and working capital management. However, the number of days of payables increased in subsequent quarters, reaching a high of 34.20 days in Q4 2019, indicating potential liquidity challenges or strained supplier relationships.

Overall, American Eagle Outfitters Inc should focus on optimizing its inventory management to control costs and improve efficiency. Additionally, maintaining stable collection processes and managing payables effectively can help enhance working capital management and overall financial performance.

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Long-term

The fixed asset turnover ratio measures how efficiently a company is utilizing its fixed assets to generate revenue. American Eagle Outfitters Inc's fixed asset turnover has been relatively stable over the analyzed periods, ranging from 5.44 to 7.38 times. This indicates that the company is generating between $5.44 and $7.38 in revenue for every dollar invested in fixed assets.

On the other hand, the total asset turnover ratio reflects how effectively the company is utilizing all its assets to generate sales. American Eagle Outfitters Inc's total asset turnover ratio has also been fairly consistent, fluctuating between 1.05 and 2.12 times. This suggests that the company is generating between $1.05 and $2.12 in revenue for every dollar invested in total assets.

Overall, both the fixed asset turnover and total asset turnover ratios indicate that American Eagle Outfitters Inc is efficiently utilizing its assets to generate sales, with a slight preference towards fixed assets in creating revenue.