Bath & Body Works Inc. (BBWI)

Short-term

Turnover ratios

Bath & Body Works Inc.'s activity ratios provide insight into the efficiency of the company's operations related to managing inventory, receivables, payables, and working capital turnover.

1. Inventory Turnover: Bath & Body Works Inc. has shown some fluctuations in its inventory turnover ratio over the years. In January 2023, the ratio was 8.72, indicating that the company sold and replaced its inventory 8.72 times during that period. However, by January 2025, the ratio had decreased to 5.55, suggesting a slowdown in inventory turnover. This downward trend may raise concerns about inventory management efficiency.

2. Receivables Turnover: The company's receivables turnover ratio reflects how quickly it collects outstanding receivables from customers. The data provided shows that Bath & Body Works Inc. had a high receivables turnover of 31.91 in January 2023, signifying that it collected receivables almost 32 times during that time frame. Interestingly, the data is missing for January 31, 2024, and January 31, 2025. This may imply that the company either had no receivables in those periods or the data was not reported.

3. Payables Turnover: Payables turnover ratio indicates how quickly a company pays its suppliers. Bath & Body Works Inc. had a payables turnover ratio of 13.59 in January 2023, but the data is missing for January 31, 2024, and January 31, 2025. The available data for February 3, 2024, shows an increased ratio of 16.19, indicating that the company improved its payables turnover efficiency, potentially by extending payment periods to suppliers.

4. Working Capital Turnover: The working capital turnover ratio measures how effectively the company utilizes its working capital to generate sales. Bath & Body Works Inc. demonstrated a relatively stable working capital turnover ratio over the years, ranging from 8.13 to 12.34. A higher ratio indicates that the company efficiently utilizes its working capital to generate sales revenue, showcasing good operational performance and capital management.

In summary, while Bath & Body Works Inc. has shown fluctuations in its activity ratios, particularly in inventory turnover, the company's performance in managing receivables, payables, and working capital turnover has been relatively consistent. Monitoring these ratios can help stakeholders assess the company's operational efficiency and financial health.

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Average number of days

The activity ratios of Bath & Body Works Inc. provide insights into how efficiently the company manages its operating cycle.

1. Days of Inventory on Hand (DOH):
- In January 2023, the company held inventory for an average of 41.85 days, which increased to 60.11 days by January 2023. The DOH further increased to 61.81 days by January 2024 before decreasing to 42.12 days by February 2024. However, there was an increase to 65.78 days by January 2025.
- The trend of increasing DOH over the years may suggest that Bath & Body Works Inc. may be facing challenges in managing its inventory efficiently, potentially leading to increased storage costs and risk of obsolescence.

2. Days of Sales Outstanding (DSO):
- DSO data is missing for January 31, 2023, and January 31, 2024. In January 2023, the company had a DSO of 11.44 days, which remained relatively stable at 11.49 days by February 2024.
- The missing data points for DSO limit a comprehensive analysis, but the stable DSO from 2023 to 2024 suggests that Bath & Body Works Inc. has been successful in collecting receivables efficiently.

3. Number of Days of Payables:
- The company took an average of 26.86 days to pay its payables as of January 28, 2023, with no data available for the following periods. By February 3, 2024, the days of payables decreased to 22.55 days.
- The decrease in the number of days of payables may indicate that Bath & Body Works Inc. is managing its payments more promptly, which could be beneficial for maintaining good relationships with suppliers.

Overall, the analysis of the activity ratios suggests that Bath & Body Works Inc. may need to focus on improving inventory management to reduce the number of days inventory is held and potentially optimize the operating cycle for increased efficiency.

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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 Bath & Body Works Inc., the fixed asset turnover ratio ranged from 5.83 to 6.34 over the period analyzed. This indicates that for each dollar invested in fixed assets, Bath & Body Works generated between $5.83 and $6.34 in revenue. The relatively high fixed asset turnover ratios suggest that Bath & Body Works effectively utilizes its fixed assets to drive sales.

Total asset turnover, on the other hand, reflects how efficiently the company generates sales from its total assets. Bath & Body Works Inc.'s total asset turnover ratio ranged from 1.30 to 1.50 during the period examined. This indicates that for each dollar invested in total assets, the company generated between $1.30 and $1.50 in revenue. The increasing trend in total asset turnover ratio implies that Bath & Body Works has been more effective in utilizing its total assets to generate sales over time.

Overall, the high fixed asset turnover ratios and the increasing trend in total asset turnover ratio suggest that Bath & Body Works Inc. effectively manages its assets to drive sales and generate revenue.