Capri Holdings Ltd (CPRI)

Short-term

Turnover ratios

Capri Holdings Ltd's activity ratios provide insight into how efficiently the company manages its assets and operations.

1. Inventory Turnover:
- The inventory turnover ratio measures how many times a company sells and replaces its inventory over a period. Capri Holdings' inventory turnover has been fluctuating, from 1.99 in 2021 to 2.12 in 2024. A higher turnover indicates efficient inventory management by selling products quickly.

2. Receivables Turnover:
- This ratio shows how efficiently the company collects its accounts receivables. Capri Holdings' receivables turnover has been increasing steadily from 10.88 in 2021 to 13.53 in 2024. A higher turnover suggests the company is collecting payments faster.

3. Payables Turnover:
- Payables turnover measures how long it takes for a company to pay its suppliers. Capri Holdings' payables turnover has also been on an upward trend, from 2.86 in 2021 to 5.20 in 2024. A higher turnover indicates the company is managing its payables effectively.

4. Working Capital Turnover:
- This ratio shows how effectively a company utilizes its working capital to generate revenue. Capri Holdings saw a significant increase in 2022 with a working capital turnover of 17.40, indicating strong efficiency in generating revenue from its working capital. However, there is missing data for the subsequent years.

Overall, Capri Holdings Ltd has shown improvements in its activity ratios, particularly in managing its inventory, receivables, and payables efficiently. These ratios suggest that the company is effectively utilizing its assets and operations to drive revenue growth.

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Average number of days

Capri Holdings Ltd's activity ratios have shown some fluctuations over the years based on the provided data.

1. Days of Inventory on Hand (DOH):
- The days of inventory on hand measures how long it takes a company to sell its inventory. Capri Holdings Ltd's DOH has fluctuated over the period, ranging from 171.84 days to 209.45 days.
- In general, a decrease in DOH indicates a more efficient inventory management process, while an increase may suggest excess inventory or potential issues with inventory turnover.

2. Days of Sales Outstanding (DSO):
- The days of sales outstanding ratio indicates how long it takes for the company to collect its accounts receivable.
- Capri Holdings Ltd's DSO has shown a decreasing trend from 33.53 days to 26.97 days, suggesting an improvement in the company's ability to collect receivables promptly.

3. Number of Days of Payables:
- The number of days of payables ratio reflects how long it takes the company to pay its suppliers.
- Capri Holdings Ltd's payables days have decreased consistently over the years, indicating the company is paying its bills more quickly. A decrease in this ratio may indicate more favorable credit terms or improved cash management.

Overall, the analysis of these activity ratios provides insights into Capri Holdings Ltd's efficiency in managing its inventory, collecting receivables, and paying its bills, highlighting potential areas of strength or weakness in its operational performance.

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Long-term

The fixed asset turnover ratio for Capri Holdings Ltd has shown a fluctuating trend over the years. It increased from 8.37 in March 2021 to 11.88 in March 2022, indicating that the company generated $11.88 in sales for every dollar invested in fixed assets during that period. However, the ratio decreased significantly to 2.99 in March 2023, suggesting a potential decline in efficiency in utilizing fixed assets to generate revenue.

On the other hand, the total asset turnover ratio has been relatively consistent, staying around 0.77 from March 2023 to March 2024. This ratio signifies that Capri Holdings generated $0.77 in sales for every dollar of total assets during these years.

The long-term activity ratios provide insights into how effectively the company is utilizing its assets to generate revenue. The fluctuation in the fixed asset turnover ratio may indicate changes in the company's asset management strategies or shifts in the industry landscape. Further analysis and comparison with industry benchmarks can provide a more comprehensive understanding of Capri Holdings Ltd's performance in this area.