Boot Barn Holdings Inc (BOOT)

Short-term

Turnover ratios

1. Inventory Turnover: Boot Barn's inventory turnover has been relatively stable over the past five years, ranging from 2.42 to 2.93 times annually. A higher inventory turnover indicates that the company is efficiently managing its inventory levels and selling products quickly. However, there has been a slight decrease in the inventory turnover ratio in the most recent year, which may signal slower inventory movement.

2. Receivables Turnover: The receivables turnover ratio measures how efficiently Boot Barn collects payments from its customers. The company has shown significant improvement in this ratio over the years, with a substantial increase from 48.97 in 2020 to 82.33 in 2024. A higher receivables turnover ratio suggests that Boot Barn is promptly collecting payments from its customers, which is a positive sign for liquidity and cash flow management.

3. Payables Turnover: Boot Barn's payables turnover ratio reflects how quickly the company pays its suppliers. The payables turnover has been increasing over the years, from 7.72 in 2021 to 11.06 in 2024. A higher payables turnover ratio indicates that Boot Barn is efficiently managing its accounts payable and paying off its suppliers faster, which could help improve relationships with vendors and possibly negotiate better terms.

4. Working Capital Turnover: The working capital turnover ratio measures how efficiently Boot Barn is utilizing its working capital to generate sales. The company's performance in this ratio has shown some fluctuations, with the ratio decreasing from 11.73 in 2020 to 4.00 in 2024. A higher working capital turnover ratio indicates that Boot Barn is turning over its working capital more frequently to drive sales. The decrease in this ratio may signal a decrease in sales generation relative to working capital employed.

In summary, Boot Barn's activity ratios reflect reasonable efficiency in inventory management, improvements in receivables collection, and better management of payables. The fluctuations in working capital turnover may warrant further investigation into the company's sales and working capital utilization strategies.

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Average number of days

Boot Barn Holdings Inc's activity ratios provide insights into how efficiently the company manages its inventory, accounts receivable, and accounts payable.

1. Days of Inventory on Hand (DOH) measures how long it takes for the company to sell its inventory. The decreasing trend in DOH from 2020 to 2023 indicates that Boot Barn is managing its inventory more efficiently, but there was a slight increase in 2024. This suggests the company may be holding excessive inventory or experiencing slower inventory turnover.

2. Days of Sales Outstanding (DSO) measures how long it takes the company to collect payment from its customers. The decreasing trend in DSO from 2020 to 2021 indicates that Boot Barn has been improving its accounts receivable management, but there was a small increase in 2024. A lower DSO is generally favorable as it indicates quicker revenue collection.

3. Number of Days of Payables indicates how long it takes the company to pay its suppliers. The decreasing trend in the number of days of payables from 2020 to 2022 suggests that Boot Barn has been paying its suppliers more quickly. However, in 2023 and 2024, there was an increase in the number of days of payables, indicating a slower payment to suppliers.

Overall, while Boot Barn has shown some improvement in managing its inventory and accounts receivable, there are signs of deteriorating performance in managing payables. The company may need to focus on optimizing its working capital cycle to maintain efficient operations and potentially improve its cash flow position.

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Long-term

Boot Barn Holdings Inc's long-term activity ratios indicate how effectively the company is using its assets to generate sales over the years.

The fixed asset turnover ratio has shown a declining trend from 2018 to 2022, indicating that the company is generating fewer sales for each dollar invested in fixed assets. However, the ratio rebounded in 2023 and further improved in 2024. This suggests that the company has become more efficient in utilizing its fixed assets to generate revenue.

On the other hand, the total asset turnover ratio has also fluctuated over the years, with a peak in 2022. This ratio reflects how efficiently the company is utilizing all its assets to generate sales. The downward trend from 2022 to 2023 may indicate a decrease in sales relative to total assets. However, the ratio slightly improved in 2024.

Overall, while the fixed asset turnover ratio has shown a recent improvement, the total asset turnover ratio has been relatively stable. It is essential for Boot Barn Holdings Inc to continue monitoring and optimizing its asset utilization to maintain or improve its efficiency in generating sales.