Academy Sports Outdoors Inc (ASO)

Short-term

Turnover ratios

Academy Sports Outdoors Inc's inventory turnover has shown a slight increase over the last two years, with a ratio of 4.60 in 2024 compared to 4.33 in 2023. This indicates that the company is selling its inventory more efficiently.

In terms of receivables turnover, there was a decrease in 2024 compared to the previous year, with a ratio of 315.55 indicating that the company is collecting its receivables at a slower rate.

The payables turnover ratio has been steadily increasing over the years, reaching 10.15 in 2024, suggesting that the company is taking longer to pay its suppliers.

The working capital turnover ratio has shown a decreasing trend over the last few years, indicating that the company's working capital is being utilized less efficiently to generate sales. It dropped from 22.62 in 2021 to 7.99 in 2024.

Overall, Academy Sports Outdoors Inc's activity ratios suggest that while they have been effective in managing inventory turnover and payables turnover, there are areas such as receivables turnover and working capital turnover that may require further attention to improve efficiency and performance.

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Average number of days

Academy Sports Outdoors Inc's activity ratios provide insights into the efficiency of its inventory management, accounts receivable collection, and accounts payable payment processes.

1. Days of Inventory on Hand (DOH): The trend in Academy Sports' DOH shows that the company has been able to reduce the number of days inventory is held on hand over the past four years. This indicates an improvement in inventory management efficiency, allowing the company to minimize holding costs and potentially avoid inventory obsolescence.

2. Days of Sales Outstanding (DSO): The DSO ratio measures the average number of days it takes for the company to collect payment on its credit sales. Academy Sports has seen fluctuations in its DSO over the years, with a slight increase in 2024 compared to the previous year. A lower DSO suggests that the company is efficient in collecting payments from customers, while a higher DSO could indicate potential issues with credit policies or the ability to collect receivables promptly.

3. Number of Days of Payables: The trend in the number of days of payables shows that Academy Sports has been managing its payables effectively, with a consistent decrease in the number of days it takes to pay its suppliers over the past four years. A lower number of days of payables could indicate a more favorable payment terms negotiation with suppliers or improved working capital management.

Overall, analyzing Academy Sports Outdoors Inc's activity ratios suggests that the company has been making improvements in its inventory management and accounts payable processes, but there have been fluctuations in accounts receivable collection efficiency. Monitoring these ratios can help stakeholders assess the company's operational efficiency and working capital management strategies.

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Long-term

Academy Sports Outdoors Inc's long-term activity ratios, specifically the Fixed Asset Turnover and Total Asset Turnover ratios, provide insights into the company's efficiency in utilizing its assets to generate sales revenues.

1. Fixed Asset Turnover: This ratio measures how efficiently the company generates sales revenue from its fixed assets. A higher fixed asset turnover ratio indicates better asset utilization. Over the past four years, Academy Sports Outdoors Inc's fixed asset turnover has fluctuated, with a peak of 19.44 in January 2022, indicating that the company generated $19.44 in sales for every $1 of fixed assets invested. The current ratio of 13.73 in February 2024 shows a slight decline from the previous year but remains relatively high, suggesting that the company continues to efficiently utilize its fixed assets to generate revenue.

2. Total Asset Turnover: This ratio reflects how effectively the company is using all its assets to generate sales. A higher total asset turnover ratio indicates a more efficient use of assets to generate revenue. Academy Sports Outdoors Inc's total asset turnover has also shown variability over the four-year period, peaking at 1.47 in January 2022. The current ratio of 1.31 in February 2024 indicates that the company generated $1.31 in sales for every $1 of total assets held, demonstrating efficient asset utilization.

In conclusion, Academy Sports Outdoors Inc has demonstrated relatively strong efficiency in generating sales revenue from both its fixed assets and total assets over the past four years, as evident from the consistent high turnover ratios. This efficiency in asset utilization can contribute positively to the company's financial performance and profitability.