Bath & Body Works Inc. (BBWI)

Short-term

Turnover ratios

Based on the provided data, let's analyze the activity ratios of Bath & Body Works Inc.

1. Inventory Turnover: Bath & Body Works Inc. managed its inventory efficiently over the period under review. The company's inventory turnover ratio fluctuated, with a range of 3.56 to 8.75 times during the evaluated period. A higher inventory turnover ratio indicates that the company is selling its products quickly, which may lead to lower inventory holding costs and potentially better cash flow management.

2. Receivables Turnover: The receivables turnover data for Bath & Body Works Inc. shows that the company had inconsistent trends in collecting receivables during the period. The receivables turnover ratio ranged from 25.28 to 59.97 times, although there were periods where data was not available. A higher receivables turnover ratio reflects effective credit management and timely collection of outstanding payments from customers.

3. Payables Turnover: The payables turnover ratio data suggests that Bath & Body Works Inc. managed its payables effectively with the turnover ratio ranging from 6.39 to 15.84 times. A higher payables turnover ratio indicates that the company is efficiently managing its payments to suppliers, potentially benefiting from favorable credit terms and cash flow management.

4. Working Capital Turnover: Bath & Body Works Inc.'s working capital turnover ratio varied significantly, ranging from 8.46 to 51.21 times during the evaluated period. A higher working capital turnover ratio signifies that the company efficiently utilizes its working capital to generate sales revenue, indicating effective working capital management.

Overall, analyzing Bath & Body Works Inc.'s activity ratios provides insights into the company's operational efficiency, inventory management, receivables collection, payables management, and working capital utilization during the reviewed period.

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Average number of days

The activity ratios of Bath & Body Works Inc. provide insights into how efficiently the company is managing its inventory, collecting receivables, and paying its payables.

1. Days of Inventory on Hand (DOH):
- The trend in DOH shows an increase from January 2022 to October 2024, indicating that inventory turnover has slowed down over time.
- The company held inventory for approximately 65 to 100 days during the period, with a slight decrease in the most recent period to around 65 days.
- A high DOH could indicate overstocking or slow-moving inventory, which may tie up capital and lead to potential obsolescence risks.

2. Days of Sales Outstanding (DSO):
- The DSO data is incomplete, showing values for only a few periods.
- The available data suggests a decreasing trend in DSO from 2022 to 2024, indicating that the company is collecting receivables more quickly over time.
- Lower DSO values signify that the company is efficiently collecting payments from customers, which improves cash flow and reduces the risk of bad debts.

3. Number of Days of Payables:
- The company's payables data is also incomplete, with values provided for only a few periods.
- The trend in the number of days of payables shows a mixed pattern, with fluctuations in the number of days the company takes to pay its suppliers.
- A longer number of days of payables could signal favorable payment terms negotiated with suppliers, providing the company with additional working capital. However, it may also indicate potential liquidity issues if payables are being stretched too far.

Overall, by analyzing these activity ratios, Bath & Body Works Inc. can assess its effectiveness in managing inventory, collecting receivables, and paying payables, which are essential factors in maintaining a healthy and efficient operational cycle.

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Long-term

Bath & Body Works Inc.'s fixed asset turnover ratio has shown some fluctuations over the past few periods, indicative of changes in how efficiently the company is utilizing its fixed assets to generate sales. The ratio decreased from 9.24 in January 2022 to 2.64 in October 31, 2023, before increasing to 7.21 in February 3, 2024.

This fluctuation may suggest varying levels of operational efficiency and productivity in utilizing its fixed assets during different periods. While a high fixed asset turnover ratio generally indicates efficient asset utilization, a significant decrease in the ratio may raise concerns about underutilization or potential inefficiencies in managing fixed assets.

In comparison, Bath & Body Works Inc.'s total asset turnover ratio has also displayed fluctuations but to a lesser extent. The ratio ranged from 1.11 in July 31, 2023, to 1.89 in April 30, 2022, showcasing moderate variability in how effectively the company is generating sales relative to its total assets.

Overall, analyzing the fixed asset turnover and total asset turnover ratios provides insights into Bath & Body Works Inc.'s operational efficiency and asset utilization over various reporting periods, highlighting the company's performance in leveraging its assets to drive revenue generation.