Burlington Stores Inc (BURL)

Short-term

Turnover ratios

Burlington Stores Inc's activity ratios provide insights into the efficiency of the company's operations in managing its inventory, receivables, payables, and working capital.

1. Inventory turnover:
- The inventory turnover ratio has been fairly stable over the past five years, ranging from 4.82 to 8.17. This indicates that Burlington is efficiently managing its inventory by swiftly selling and replenishing stock. A higher turnover ratio signifies that the company is selling its inventory quickly, which is positive for cash flow and profitability.

2. Receivables turnover:
- The receivables turnover ratio has shown an increasing trend over the years, from 79.63 in 2020 to 130.81 in 2024. This indicates that Burlington is collecting its receivables more quickly, which is a positive sign of effective credit management and liquidity. A higher turnover ratio suggests a shorter time between credit sales and cash collections.

3. Payables turnover:
- Burlington's payables turnover ratio has been generally consistent over the past five years, ranging from 4.14 to 9.29. A higher ratio indicates that the company is paying off its suppliers more quickly, potentially taking advantage of discounts or favorable credit terms. Efficient payables turnover can lead to improved vendor relationships and cash flow management.

4. Working capital turnover:
- The working capital turnover ratio, starting from 2020, has shown a consistent improvement, from 6.97 to 32.62 in 2024. A higher working capital turnover suggests that Burlington is using its working capital more efficiently to generate sales. This can indicate effective management of current assets and liabilities.

Overall, Burlington Stores Inc's activity ratios reflect a positive trend in managing its inventory, receivables, payables, and working capital efficiently over the past few years. These ratios indicate good operational performance and effective utilization of resources to support the company's growth and financial health.

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Average number of days

Activity ratios provide insight into how efficiently a company manages its assets and liabilities to generate revenue. Let's delve into the activity ratios of Burlington Stores Inc over the years:

1. Days of Inventory on Hand (DOH):
- Burlington Stores Inc has shown fluctuations in its DOH over the past five years, ranging from around 45 to 76 days.
- A lower DOH indicates faster inventory turnover, implying efficient management of inventory levels.
- The decrease in DOH from FY2021 to FY2022 suggests improved inventory management efficiency, which may lead to cost savings and better liquidity.

2. Days of Sales Outstanding (DSO):
- Burlington Stores Inc has maintained relatively consistent DSO levels over the years, ranging from 2 to 4 days.
- A lower DSO indicates the company is efficient in collecting revenue from credit sales.
- Consistent DSO levels reflect good credit management practices and strong customer payment behavior, contributing to cash flow stability.

3. Number of Days of Payables:
- Burlington Stores Inc has demonstrated varying trends in the number of days of payables, fluctuating from approximately 39 to 88 days.
- A higher number of days of payables suggests the company takes longer to pay its suppliers, potentially benefiting from extended payment terms.
- The decrease in the number of days of payables from FY2021 to FY2022 indicates the company is paying its suppliers more promptly, which may enhance supplier relationships and negotiating power.

Overall, these activity ratios highlight Burlington Stores Inc's management of inventory, receivables, and payables over the years, indicating efforts to optimize operational efficiency and working capital utilization.

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Long-term

To evaluate Burlington Stores Inc's long-term activity ratios over the past five years, we can analyze the fixed asset turnover and total asset turnover ratios.

The fixed asset turnover ratio measures how efficiently the company is utilizing its fixed assets to generate sales. Looking at the trend, we observe fluctuations in the fixed asset turnover ratio over the years. In 2022, the company achieved the highest efficiency in utilizing its fixed assets with a ratio of 6.01, indicating that for every dollar invested in fixed assets, the company generated $6.01 in sales. This was followed by a decline in 2023 and a further decrease in 2024 to 5.17, suggesting a slight decrease in efficiency in 2024 compared to the previous years.

On the other hand, the total asset turnover ratio reflects the company's overall efficiency in using all its assets to generate revenue. The trend in this ratio also shows variations over the years. In 2022 and 2020, the company achieved the highest total asset turnover ratios of 1.31 and 1.30, respectively. This indicates that for every dollar of assets held by the company, it generated $1.31 and $1.30 in sales, respectively. However, the ratio dropped in 2021 to 0.85, reflecting lower efficiency in asset utilization during that year.

Overall, the analysis of the long-term activity ratios for Burlington Stores Inc reveals fluctuations in both fixed asset turnover and total asset turnover ratios over the past five years. It is essential for investors and stakeholders to closely monitor these ratios to assess the company's efficiency in utilizing its assets and generating revenue.