Best Buy Co. Inc (BBY)
Activity ratios
Short-term
Turnover ratios
| Feb 3, 2024 | Jan 28, 2023 | Jan 29, 2022 | Jan 30, 2021 | Feb 1, 2020 | |
|---|---|---|---|---|---|
| Inventory turnover | 6.83 | 7.08 | 6.73 | 6.54 | 6.49 |
| Receivables turnover | 46.27 | 40.58 | 49.67 | 44.54 | 37.98 |
| Payables turnover | 7.30 | 6.40 | 5.90 | 5.26 | 6.35 |
| Working capital turnover | — | — | — | 23.41 | 54.75 |
Inventory turnover measures how efficiently a company manages its inventory. Best Buy Co. Inc's inventory turnover has been relatively stable over the past five years, ranging from 6.49 to 7.08. This indicates that the company is able to sell and replace its inventory multiple times during the year, with the latest figure being 6.83 as of Feb 3, 2024.
Receivables turnover reflects how quickly the company is able to collect outstanding receivables. Best Buy Co. Inc's receivables turnover has shown a positive trend over the years, increasing from 37.98 in Feb 1, 2020, to 46.27 in Feb 3, 2024. This suggests that the company is becoming more efficient in collecting payments from customers.
Payables turnover measures how quickly a company pays its suppliers. Best Buy Co. Inc's payables turnover has shown some fluctuation, but the latest figure stands at 7.30 as of Feb 3, 2024. A higher payables turnover ratio indicates that the company is settling its payables more quickly, which may improve relationships with suppliers.
Working capital turnover ratio reflects how effectively a company is utilizing its working capital to generate sales. Best Buy Co. Inc did not provide data for working capital turnover before 2021 but reported figures of 23.41 in Jan 30, 2021, and 54.75 in Feb 1, 2020. These high ratios suggest that the company is efficiently using its working capital to generate revenue.
Overall, Best Buy Co. Inc's activity ratios indicate efficient management of inventory, receivables, payables, and working capital in recent years, contributing to improved operational performance.
Average number of days
| Feb 3, 2024 | Jan 28, 2023 | Jan 29, 2022 | Jan 30, 2021 | Feb 1, 2020 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 53.46 | 51.56 | 54.27 | 55.83 | 56.22 |
| Days of sales outstanding (DSO) | days | 7.89 | 9.00 | 7.35 | 8.19 | 9.61 |
| Number of days of payables | days | 50.00 | 57.05 | 61.89 | 69.43 | 57.46 |
Days of Inventory on Hand (DOH):
- The Days of Inventory on Hand have slightly increased from 51.56 days in January 2023 to 53.46 days in February 2024.
- This indicates that Best Buy Co. Inc is taking slightly longer to sell its inventory, which may tie up more capital and increase holding costs compared to the previous year.
Days of Sales Outstanding (DSO):
- The Days of Sales Outstanding have decreased from 9.00 days in January 2023 to 7.89 days in February 2024.
- This suggests that Best Buy Co. Inc is collecting its accounts receivable more efficiently, which can improve cash flow and liquidity.
Number of Days of Payables:
- The Number of Days of Payables have decreased from 57.05 days in January 2023 to 50.00 days in February 2024.
- This indicates that Best Buy Co. Inc is taking fewer days to pay its suppliers, which may signal improved relationships with vendors or better management of payables.
Overall, the changes in these activity ratios show that Best Buy Co. Inc has made some improvements in inventory management and accounts receivable collection, which can positively impact its working capital and operational efficiency.
See also:
Best Buy Co. Inc Short-term (Operating) Activity Ratios
Long-term
| Feb 3, 2024 | Jan 28, 2023 | Jan 29, 2022 | Jan 30, 2021 | Feb 1, 2020 | |
|---|---|---|---|---|---|
| Fixed asset turnover | 19.23 | 19.68 | 23.00 | 20.91 | 18.74 |
| Total asset turnover | 2.90 | 2.93 | 2.96 | 2.48 | 2.80 |
Best Buy Co. Inc's long-term activity ratios, specifically the fixed asset turnover and total asset turnover, provide valuable insight into the company's efficiency in utilizing its assets to generate revenue over the long term.
Fixed asset turnover has been relatively stable over the past five years, ranging from 18.74 to 23.00. This indicates that Best Buy effectively generates sales in relation to its fixed assets, such as property, equipment, and infrastructure. A higher fixed asset turnover ratio suggests that the company is efficiently using its fixed assets to drive revenue, which can be a positive sign of operational effectiveness and asset utilization.
On the other hand, total asset turnover has shown some fluctuation but remained within a relatively narrow range of 2.48 to 2.96. This ratio reflects how efficiently the company generates sales with all of its assets, including both fixed and current assets. A higher total asset turnover ratio signifies that Best Buy is generating more sales relative to its total assets, indicating efficient asset management and effective use of resources to drive revenue.
Overall, Best Buy Co. Inc's long-term activity ratios reveal a consistent performance in terms of efficiently utilizing its fixed assets to drive revenue, while also maintaining a steady level of total asset turnover over the years. These ratios indicate that the company has been effectively managing its assets to generate sales, which is crucial for sustaining its long-term profitability and financial health.