Abercrombie & Fitch Company (ANF)

Short-term

Turnover ratios

Based on the activity ratios provided for Abercrombie & Fitch Company:

1. Inventory Turnover: The company's inventory turnover ratio has remained relatively stable over the years, ranging from 3.09 to 3.38. This indicates that Abercrombie & Fitch is efficiently managing its inventory by selling and replenishing it at a consistent rate.

2. Receivables Turnover: The data shows fluctuations in the receivables turnover ratio, with values reported for some years and missing for others. For the years with available data, there is a significant increase in the ratio, indicating that the company is collecting its receivables at a faster pace.

3. Payables Turnover: The payables turnover ratio is missing for most of the years, which makes it difficult to assess Abercrombie & Fitch's efficiency in paying its suppliers. However, the available data suggests a decrease in the ratio, indicating a potentially slower payment to suppliers.

4. Working Capital Turnover: The working capital turnover ratio has declined over the years from 11.35 to 9.06. This decrease suggests that the company's efficiency in generating revenue from its working capital has decreased, which may indicate less effective utilization of assets to generate sales.

Overall, while the inventory turnover ratio indicates efficient inventory management, the trends in receivables turnover, payables turnover, and working capital turnover suggest areas where Abercrombie & Fitch could focus on improving its operational efficiency and cash flow management.

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Average number of days

The activity ratios provide insight into how efficiently Abercrombie & Fitch manages its inventory, collects receivables, and pays its suppliers.

1. Days of Inventory on Hand (DOH):
- The DOH indicates the average number of days it takes for the company to sell its inventory.
- Abercrombie & Fitch's DOH has been relatively stable, ranging from around 108 to 119 days over the five-year period.
- A decreasing trend in DOH could signify that the company is managing its inventory more efficiently and turning over stock faster, which is generally positive for cash flow and profitability.

2. Days of Sales Outstanding (DSO):
- The DSO represents how long it takes for the company to collect payment from its customers.
- Abercrombie & Fitch has shown variations in DSO over the years, with values ranging from approximately 6.7 to 10.3 days.
- A lower DSO indicates that the company is collecting payments faster, which is beneficial for cash flow and liquidity.

3. Number of Days of Payables:
- This ratio reflects the average number of days it takes for Abercrombie & Fitch to pay its suppliers.
- The data provided shows that the company's payment terms with suppliers have also fluctuated, with values between roughly 59 to 68 days.
- Extending the number of days payable can be advantageous in managing cash flow, as long as it is done in a manner that maintains good relationships with suppliers.

In summary, analyzing Abercrombie & Fitch's activity ratios reveals the company's effectiveness in managing inventory, collecting receivables, and paying suppliers. Monitoring these ratios can help identify opportunities for improvement in operational efficiency and working capital management.

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Long-term

The Fixed Asset Turnover ratio measures how efficiently a company utilizes its fixed assets to generate revenue. In the case of Abercrombie & Fitch Company, the Fixed Asset Turnover ratio showed significant fluctuations over the years.

In January 28, 2023, the Fixed Asset Turnover ratio was 6.70, indicating that Abercrombie & Fitch generated $6.70 in sales for every dollar invested in fixed assets. However, by January 31, 2023, this ratio decreased to 2.90, suggesting a decrease in efficiency in utilizing fixed assets to generate sales.

Interestingly, there was missing data for January 31, 2024, but by February 3, 2024, the Fixed Asset Turnover ratio improved significantly to 7.96, showing a strong performance in generating sales relative to fixed assets. The efficiency seemed to have increased substantially.

For January 31, 2025, the data was unavailable.

Overall, the Fixed Asset Turnover ratios demonstrate fluctuations in Abercrombie & Fitch's efficiency in utilizing fixed assets to generate revenue, with significant improvements observed in some periods.

The Total Asset Turnover ratio measures the efficiency of a company in generating sales revenue relative to its total assets. Abercrombie & Fitch Company's Total Asset Turnover ratio remained relatively stable over the years.

In January 28, 2023, and January 31, 2023, the Total Asset Turnover ratio was 1.36, indicating that the company generated $1.36 in sales for every dollar of total assets. By January 31, 2024, and February 3, 2024, the ratio increased to 1.44, showing a slight improvement in efficiency in utilizing total assets to generate sales.

The Total Asset Turnover ratio continued to increase to 1.50 by January 31, 2025, indicating a further improvement in Abercrombie & Fitch's efficiency in generating sales with its total assets.

Overall, the Total Asset Turnover ratios reflect a consistent and positive trend in Abercrombie & Fitch's efficiency in utilizing its total assets to drive revenue growth over the years.