Chewy Inc (CHWY)

Short-term

Turnover ratios

1. Inventory Turnover:
- Chewy Inc's inventory turnover ratio has remained relatively stable over the past five years, ranging between 13.10 and 14.89 times. This indicates that the company is efficiently managing its inventory by frequently selling and restocking goods. A higher inventory turnover ratio suggests that Chewy is effectively managing its inventory levels and minimizing the risk of obsolete or excess inventory.

2. Receivables Turnover:
- Chewy's receivables turnover ratio has shown a fluctuating trend, varying from 58.30 to 79.91 times over the same period. A higher receivables turnover ratio indicates that the company is efficient in collecting payments from customers. The decrease in 2021 and 2023 may imply that Chewy has been extending credit to customers for a longer period or experiencing challenges in collecting payments promptly.

3. Payables Turnover:
- Chewy's payables turnover ratio has been relatively consistent, ranging from 6.84 to 9.45 times. This suggests that Chewy is paying its suppliers in an efficient and timely manner. A higher payables turnover ratio indicates that the company is managing its payable obligations effectively and possibly taking advantage of discounts offered for early payments.

4. Working Capital Turnover:
- The data provided does not include information on Chewy Inc's working capital turnover for any of the five years. The working capital turnover ratio evaluates how effectively a company is utilizing its working capital to generate sales. Without this data, it is challenging to assess Chewy's efficiency in utilizing its working capital.

In conclusion, Chewy Inc has demonstrated efficiency in managing its inventory and payables, while the trend in receivables turnover suggests a need for monitoring customer credit policies. It would be beneficial to analyze further financial metrics and trends to gain a holistic view of Chewy's operational efficiency and liquidity management.

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Average number of days

Days of inventory on hand (DOH) measures how many days it takes for the company to sell its inventory. A lower DOH indicates that Chewy is efficiently managing its inventory turnover, converting inventory into sales more quickly. Over the past five years, Chewy has shown improvement in managing its inventory with a decreasing trend in DOH, dropping from 27.87 days in 2021 to 25.16 days in 2024.

Days of sales outstanding (DSO) reflects the average number of days it takes for Chewy to collect revenue after a sale has been made. A lower DSO suggests that the company has efficient collections processes. Chewy has been consistently improving its DSO over the years, with a decrease from 6.26 days in 2021 to 5.05 days in 2024, indicating that Chewy is collecting its receivables more quickly.

Number of days of payables illustrates how long Chewy takes to pay its suppliers. A higher number of days of payables generally indicates that the company is managing its cash flow effectively by delaying payments to suppliers. Chewy has managed to reduce its days of payables from 53.36 days in 2020 to 38.66 days in 2024, showing better management of payable obligations over the years.

Overall, Chewy's activity ratios suggest that the company has been improving its efficiency in managing inventory, collecting sales, and handling payables, which are all positive signs of effective working capital management and operational performance.

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Long-term

The long-term activity ratios for Chewy Inc, specifically the fixed asset turnover and total asset turnover, show the company's efficiency in generating sales relative to its asset base over the past five years.

1. Fixed asset turnover:
- The fixed asset turnover ratio measures how efficiently a company is using its fixed assets to generate revenue.
- Chewy Inc's fixed asset turnover has been consistently high over the past five years, with values ranging from 21.09 to 40.82.
- A high fixed asset turnover ratio indicates that Chewy Inc is effectively utilizing its fixed assets to generate sales, suggesting efficient management of its long-term resources.

2. Total asset turnover:
- The total asset turnover ratio indicates the company's ability to generate sales relative to its total assets.
- Chewy Inc's total asset turnover has fluctuated over the years, with values ranging from 3.50 to 5.20.
- While the total asset turnover has shown some variability, the ratios remain within a reasonable range, demonstrating Chewy Inc's ability to efficiently utilize its total assets to generate revenue.

Overall, based on the analysis of the fixed asset turnover and total asset turnover ratios, Chewy Inc appears to be effectively managing its long-term assets to drive sales growth and improve operational efficiency.