Abercrombie & Fitch Company (ANF)

Short-term

Turnover ratios

Inventory Turnover Ratio:

Abercrombie & Fitch's inventory turnover ratio indicates the number of times the company sells and replaces its inventory over a specific period. The trend in the inventory turnover ratio shows a slight decline from 3.09 in January 2022 to 2.46 in October 2024. A decrease in this ratio may suggest potential issues such as overstocking, slow sales, or inefficient inventory management.

Receivables Turnover Ratio:

The receivables turnover ratio measures how efficiently Abercrombie & Fitch collects payments from its customers. The data indicates that there were missing values for some periods, implying inconsistent or unavailable accounts receivable information. When the ratio is higher, it signifies effective credit and collection policies.

Payables Turnover Ratio:

Abercrombie & Fitch's payables turnover ratio illustrates how quickly the company pays its suppliers. The turnover ratio increased from 4.09 in July 2022 to 6.13 in February 2024, indicating a more efficient payment cycle. A higher turnover ratio could suggest the company is managing its payables well or negotiating better credit terms.

Working Capital Turnover Ratio:

The working capital turnover ratio reflects how efficiently Abercrombie & Fitch utilizes its working capital to generate revenue. The fluctuations in this ratio over the periods indicate changes in the company's operational efficiency. A high turnover ratio indicates that the company is effectively using its working capital to support sales and operations.

In summary, analyzing these activity ratios can provide insights into Abercrombie & Fitch's operational performance, inventory management, collection practices, payment cycles, and overall efficiency in utilizing its working capital to drive sales and growth.

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Average number of days

Abercrombie & Fitch Company's activity ratios provide insights into the company's efficiency in managing its inventory, collecting receivables, and paying its payables.

1. Days of Inventory on Hand (DOH):
- The DOH ratio indicates how many days, on average, the company holds its inventory before selling it.
- Abercrombie & Fitch's DOH has fluctuated over the years, ranging from 91.47 days to 190.12 days.
- A decreasing trend in DOH is generally favorable as it suggests efficient inventory management, as seen in the declining trend from October 2023 to April 2024.
- However, the increase in DOH from October 2024 to January 2025 may indicate potential issues with inventory management or slowing sales.

2. Days of Sales Outstanding (DSO):
- DSO measures how quickly the company collects payments from its customers.
- Abercrombie & Fitch's DSO data is incomplete, with varying values reported over different periods.
- Lower DSO values are typically preferred as they indicate faster collection of receivables.
- The fluctuating and incomplete DSO data makes it challenging to assess the company's efficiency in collecting receivables accurately.

3. Number of Days of Payables:
- This ratio reflects how long the company takes to pay its suppliers.
- Abercrombie & Fitch's number of days of payables ranged from 46.26 days to 97.57 days.
- A longer payment period can indicate favorable terms with suppliers, but it may also signal potential liquidity issues if payables are extended excessively.
- The fluctuating nature of the payables period makes it important to monitor changes to understand the company's payment practices.

Overall, analyzing these activity ratios collectively can provide a more comprehensive view of Abercrombie & Fitch Company's operational efficiency and financial health in managing its inventory, receivables, and payables.

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Long-term

Long-term activity ratios such as Fixed Asset Turnover and Total Asset Turnover provide insights into how efficiently Abercrombie & Fitch Company is utilizing its assets to generate sales.

Looking at the Fixed Asset Turnover ratio over the past few years, we can see fluctuations in the efficiency of Abercrombie & Fitch in generating sales from its fixed assets. The ratio ranged from 2.68 to 9.33, with the highest value seen on February 3, 2024. This indicates that the company experienced a significant improvement in utilizing its fixed assets to generate revenue during that period.

On the other hand, the Total Asset Turnover ratio, which measures the efficiency of Abercrombie & Fitch in generating sales from all its assets, also varied over time. The ratio ranged from 1.23 to 1.69, showing fluctuations in how effectively the company is utilizing all its assets to generate revenue.

Overall, the analysis of these long-term activity ratios suggests that Abercrombie & Fitch Company has experienced varying levels of efficiency in utilizing its fixed assets and total assets to generate sales over the years, indicating fluctuations in operational efficiency and asset utilization.