Deckers Outdoor Corporation (DECK)

Activity ratios

Short-term

Turnover ratios

	Mar 31, 2024	Mar 31, 2023	Mar 31, 2022	Mar 31, 2021	Mar 31, 2020
Inventory turnover	7.11	5.59	5.11	7.36	5.77
Receivables turnover	12.61	11.84	9.82	11.47	11.01
Payables turnover	8.91	11.21	7.90	8.85	12.17
Working capital turnover	2.49	2.57	2.60	2.15	2.39

Deckers Outdoor Corporation's activity ratios provide insight into how efficiently the company manages its inventory, receivables, payables, and working capital.

1. Inventory turnover:
- The inventory turnover ratio has ranged from 5.11 to 7.36 over the past five years, with an average of approximately 6.19.
- This suggests that Deckers is effectively managing its inventory and turning over its inventory between 5 to 7 times a year.
- The increase in 2021 followed by a slight decrease in 2022 indicates some fluctuations in inventory management efficiency.

2. Receivables turnover:
- The receivables turnover ratio has varied from 9.82 to 12.61 over the period, averaging around 11.55.
- This indicates that Deckers collects its accounts receivable approximately 11 to 12 times per year, reflecting a strong credit and collection process.
- The consistent performance in this ratio demonstrates the company's effectiveness in managing credit sales and collections.

3. Payables turnover:
- The payables turnover ratio fluctuated from 7.90 to 12.17, with an average of about 9.81.
- A lower payables turnover could suggest that the company is taking longer to pay off its suppliers, while a higher ratio indicates faster payment cycles.
- Deckers' payables turnover has shown some variability, with a notable decrease in 2022 followed by fluctuations in the subsequent years.

4. Working capital turnover:
- The working capital turnover ratio ranges from 2.15 to 2.60, with an average of approximately 2.44.
- This ratio indicates how efficiently the company is utilizing its working capital to generate sales revenue.
- The relatively consistent performance in this ratio suggests that Deckers is efficiently utilizing its working capital to support its operations and generate revenue.

In summary, Deckers Outdoor Corporation has demonstrated efficiency in managing its inventory, receivables, payables, and working capital, as indicated by the activity ratios analyzed over the past five years.

Average number of days

		Mar 31, 2024	Mar 31, 2023	Mar 31, 2022	Mar 31, 2021	Mar 31, 2020
Days of inventory on hand (DOH)	days	51.36	65.33	71.47	49.57	63.21
Days of sales outstanding (DSO)	days	28.95	30.82	37.18	31.83	33.16
Number of days of payables	days	40.98	32.56	46.18	41.26	30.00

The Days of Inventory on Hand (DOH) for Deckers Outdoor Corporation decreased from 65.33 days in 2023 to 51.36 days in 2024, indicating a more efficient management of inventory. This reduction suggests that the company is selling products more quickly or managing inventory levels more effectively.

The Days of Sales Outstanding (DSO) also improved, decreasing from 30.82 days in 2023 to 28.95 days in 2024. A lower DSO suggests that the company is collecting receivables faster, which can improve cash flow and reduce the risk of bad debts.

On the other hand, the Number of Days of Payables increased from 32.56 days in 2023 to 40.98 days in 2024. A higher number of days of payables indicates that the company is taking more time to pay its suppliers, potentially benefiting from improved cash flow but it may also strain relationships with suppliers if not managed carefully.

Overall, the trend in these activity ratios suggests that Deckers Outdoor Corporation has improved its inventory management and collection processes, but may need to monitor its payment practices to ensure optimal relationships with suppliers while maintaining strong cash flow.

Long-term

	Mar 31, 2024	Mar 31, 2023	Mar 31, 2022	Mar 31, 2021	Mar 31, 2020
Fixed asset turnover	14.19	13.60	14.16	12.34	10.20
Total asset turnover	1.37	1.42	1.35	1.17	1.21

The fixed asset turnover ratio for Deckers Outdoor Corporation has shown a consistent increasing trend over the past five years, reaching 14.19 in 2024 from 10.20 in 2020. This indicates that the company is generating more sales revenue relative to its investment in fixed assets.

On the other hand, the total asset turnover ratio fluctuated slightly over the same period, with a decrease from 1.21 in 2020 to 1.17 in 2021 followed by an increase to 1.42 in 2023, then a decrease to 1.37 in 2024. This ratio measures the efficiency of the company in generating sales revenue from all its assets.

Overall, despite the fluctuations in total asset turnover, the upward trend in fixed asset turnover suggests that Deckers Outdoor Corporation has been effectively utilizing its fixed assets to generate sales revenue. Additionally, the company's ability to efficiently convert its investments in fixed assets into sales has improved significantly over the years, indicating a positive trend in its operational efficiency.