Crocs Inc (CROX)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Inventory turnover | 7.66 | 5.78 | 7.72 | 6.78 | 6.49 |
| Receivables turnover | 12.25 | 11.02 | 11.18 | 9.07 | 11.14 |
| Payables turnover | 11.30 | 11.80 | 10.16 | 10.53 | 11.67 |
| Working capital turnover | 17.89 | 8.89 | 8.23 | 6.84 | 7.25 |
Crocs Inc's activity ratios provide insights into the efficiency of the company's management of its assets and liabilities.
1. Inventory Turnover:
- Crocs Inc's inventory turnover has shown an increasing trend over the past five years, with a ratio of 4.55 in 2023 compared to 3.57 in 2019. This indicates that the company is managing its inventory more efficiently, converting inventory into sales at a faster rate.
2. Receivables Turnover:
- The receivables turnover ratio has also been increasing steadily, reaching 11.96 in 2023 from 10.41 in 2019. This suggests that Crocs Inc is collecting receivables more quickly, which is a positive sign of effective credit management.
3. Payables Turnover:
- Crocs Inc's payables turnover ratio has fluctuated over the years, but it has generally remained within a stable range. A ratio of 6.71 in 2023 indicates that the company is paying its suppliers at a slightly slower rate compared to the previous year.
4. Working Capital Turnover:
- The working capital turnover ratio has shown significant improvement, with a ratio of 18.65 in 2023 compared to 7.32 in 2019. This implies that Crocs Inc is generating sales more efficiently relative to its working capital, which can be a sign of strong operational performance.
Overall, the activity ratios suggest that Crocs Inc has been improving its efficiency in managing inventory, receivables, payables, and working capital over the years. This bodes well for the company's operational performance and ability to generate sales effectively.
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 | 47.67 | 63.19 | 47.31 | 53.82 | 56.20 |
| Days of sales outstanding (DSO) | days | 29.80 | 33.11 | 32.64 | 40.25 | 32.78 |
| Number of days of payables | days | 32.31 | 30.93 | 35.93 | 34.66 | 31.28 |
Crocs Inc's activity ratios provide insights into how efficiently the company manages its inventory, collects its receivables, and pays its suppliers.
1. Days of Inventory on Hand (DOH):
- Crocs Inc's days of inventory on hand has shown a decreasing trend from 2020 to 2023, indicating that the company is managing its inventory more efficiently over the years.
- The decrease in DOH implies that Crocs is selling its inventory at a faster rate, thus reducing the amount of capital tied up in inventory.
2. Days of Sales Outstanding (DSO):
- The days of sales outstanding for Crocs Inc fluctuated over the years, but there is an overall decreasing trend from 2019 to 2023.
- A decreasing DSO suggests that the company is improving its collection process and converting its accounts receivable into cash more quickly.
3. Number of Days of Payables:
- Crocs Inc's number of days of payables has varied over the years, with no clear trend observed.
- A higher number of days of payables indicates that the company is taking longer to pay its suppliers, potentially benefiting from extended credit terms.
Overall, the decreasing trend in days of inventory on hand and days of sales outstanding suggest that Crocs Inc has been more efficient in managing its inventory and converting sales into cash. However, the variability in the number of days of payables indicates potential fluctuations in the company's payment practices to suppliers.
Long-term
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Fixed asset turnover | 15.94 | 18.85 | 21.14 | 23.94 | 25.73 |
| Total asset turnover | 0.82 | 0.76 | 1.48 | 1.23 | 1.65 |
Crocs Inc's long-term activity ratios indicate the efficiency of the company in generating sales using its fixed assets and total assets over the years.
The fixed asset turnover ratio has witnessed a declining trend from 2019 to 2023, decreasing from 25.96 to 16.63. This trend suggests a reduction in the company's ability to generate sales from its fixed assets over the years. A lower fixed asset turnover ratio may indicate underutilization of fixed assets or difficulties in efficiently utilizing them to generate revenue.
On the other hand, the total asset turnover ratio has fluctuated over the same period, with a peak in 2021 at 1.50 and hitting a low of 0.79 in 2022. This ratio signifies the company's efficiency in generating sales from all its assets. While the ratio has varied, it is worth noting that in 2023, the total asset turnover ratio stands at 0.85, suggesting that Crocs Inc's ability to generate sales from its total assets improved slightly compared to the prior year.
In conclusion, the declining trend in fixed asset turnover raises concerns about the company's management of fixed assets. However, the fluctuating but relatively stable total asset turnover indicates improvements in utilizing all assets to generate sales. Crocs Inc may benefit from further analysis to identify reasons behind the decline in fixed asset turnover and strategize for better asset utilization in the future.