Carter’s Inc (CRI)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Inventory turnover | 2.13 | 1.60 | 1.98 | 2.10 | 3.39 |
| Receivables turnover | 15.84 | 15.86 | 14.81 | 15.91 | 14.02 |
| Payables turnover | 4.72 | 4.51 | 3.15 | 2.67 | 10.95 |
| Working capital turnover | 4.94 | 4.77 | 2.90 | 2.57 | 5.57 |
Inventory Turnover:
Carter’s Inc's inventory turnover has been fluctuating over the last five years. In 2021 and 2022, the company experienced a decrease in inventory turnover which might indicate inefficiencies in managing inventory levels. However, in 2023, there was a slight improvement in inventory turnover, which suggests the company may have better inventory management practices in place compared to the previous years.
Receivables Turnover:
The receivables turnover ratio of Carter’s Inc has been relatively stable over the past five years. A high receivables turnover ratio indicates that the company efficiently collects payments from its customers. Even though there were minor fluctuations, the consistency in the receivables turnover ratio reflects the company's effectiveness in managing its accounts receivable efficiently.
Payables Turnover:
Carter’s Inc's payables turnover ratio has experienced fluctuations over the years. A higher payables turnover ratio signifies that the company is paying off its suppliers at a faster rate. The significant decrease in the payables turnover ratio in 2021 and 2022 might indicate delays in payments to suppliers, which could be a cause for concern. However, the ratio improved in 2023, suggesting that the company may have adjusted its payment practices.
Working Capital Turnover:
The working capital turnover ratio of Carter’s Inc has varied significantly over the years. A higher working capital turnover ratio indicates that the company efficiently utilizes its working capital to generate sales. The decrease in the ratio in 2021 and 2022 may indicate inefficiencies in utilizing working capital to generate revenue. However, the ratio increased in 2023, indicating improved efficiency in converting working capital into sales.
In conclusion, it is essential for Carter’s Inc to closely monitor its activity ratios, especially inventory turnover and payables turnover, to ensure effective management of resources and sustainable growth.
Average number of days
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 171.39 | 228.38 | 184.64 | 173.64 | 107.82 |
| Days of sales outstanding (DSO) | days | 23.04 | 23.01 | 24.65 | 22.94 | 26.03 |
| Number of days of payables | days | 77.27 | 81.00 | 116.03 | 136.81 | 33.34 |
Carter’s Inc activity ratios show fluctuations over the past five years. The Days of Inventory on Hand (DOH) increased from 107.82 days in 2019 to 228.38 days in 2022 before decreasing to 171.39 days in 2023. This indicates that inventory turnover slowed in 2022 but improved in 2023.
The Days of Sales Outstanding (DSO) remained relatively stable between 22.94 days in 2020 and 26.03 days in 2019, with a slight decrease to 23.04 days in 2023. This suggests that the company's collection of receivables has been consistent, with a slight improvement in 2023.
The Number of Days of Payables increased significantly from 33.34 days in 2019 to 136.81 days in 2020 before declining to 77.27 days in 2023. This indicates that Carter’s Inc took longer to pay its suppliers in 2020 but has since reduced this payment period.
Overall, the analysis of Carter’s Inc activity ratios shows fluctuations in inventory management, stable receivables collection, and variations in payment periods to suppliers over the past five years.
Long-term
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Fixed asset turnover | 15.90 | 16.59 | 15.86 | 11.31 | 10.99 |
| Total asset turnover | 1.22 | 1.29 | 1.07 | 0.87 | 1.28 |
Carter’s Inc's long-term activity ratios display a consistent trend of improvement over the past five years. The fixed asset turnover ratio measures the efficiency of the company in generating sales from its long-term assets, and it has steadily increased from 10.99 in 2019 to 15.90 in 2023. This indicates that the company is effectively utilizing its fixed assets to generate revenue.
Similarly, the total asset turnover ratio reflects the company's ability to generate sales from all its assets, both short-term and long-term. Carter’s Inc has shown a positive trend in this ratio as well, increasing from 0.87 in 2020 to 1.22 in 2023. This indicates that the company is becoming more efficient in utilizing its total assets to generate sales.
Overall, the improving trend in both fixed asset turnover and total asset turnover ratios suggests that Carter’s Inc is effectively managing its assets to drive sales growth and improve operational efficiency over the years. This bodes well for the company's long-term financial performance and indicates a positive outlook for its future growth prospects.