Dollar General Corporation (DG)

Activity ratios

Short-term

Turnover ratios

	Feb 2, 2024	Feb 3, 2023	Jan 28, 2022	Jan 29, 2021	Jan 31, 2020
Inventory turnover	5.18	5.11	5.52	5.75	5.44
Receivables turnover	341.74	277.18	349.74	370.17	361.31
Payables turnover	10.11	9.72	8.29	8.35	8.90
Working capital turnover	29.86	22.23	104.98	27.92	43.56

Inventory turnover is a measure of how efficiently a company manages its inventory. Dollar General Corporation's inventory turnover has been relatively stable over the past five years, ranging between 5.11 and 5.75 times per year. This indicates that the company is effectively selling through its inventory and restocking at an appropriate pace.

Receivables turnover measures how quickly a company collects cash from its customers. Dollar General Corporation's receivables turnover has shown significant variability, with a peak of 370.17 in 2021 and a low of 277.18 in 2023. The high turnover ratio suggests that the company efficiently collects payments from customers, while the fluctuations may indicate changes in customers' payment behaviors.

Payables turnover evaluates how effectively a company manages its accounts payable. Dollar General Corporation's payables turnover has been consistent, ranging from 8.29 to 10.11, over the past five years. A higher turnover ratio suggests that the company pays its suppliers more frequently, potentially benefiting from early payment discounts.

Working capital turnover measures how efficiently a company generates sales revenue relative to its working capital investment. Dollar General Corporation's working capital turnover has varied significantly, with a notable spike in 2022 to 104.98 and lower ratios in other years. The elevated turnover ratio in 2022 could indicate a higher level of sales generated with the available working capital.

Overall, Dollar General Corporation shows consistent performance in managing its inventory, receivables, and payables, with fluctuations in working capital turnover possibly driven by changes in sales volume or working capital management strategies.

Average number of days

		Feb 2, 2024	Feb 3, 2023	Jan 28, 2022	Jan 29, 2021	Jan 31, 2020
Days of inventory on hand (DOH)	days	70.42	71.49	66.10	63.43	67.06
Days of sales outstanding (DSO)	days	1.07	1.32	1.04	0.99	1.01
Number of days of payables	days	36.12	37.57	44.02	43.69	41.02

Activity ratios provide insights into how efficiently a company manages its assets and liabilities. Looking at Dollar General Corporation's activity ratios over the past five years, we can see trends in its operational performance.

1. Days of Inventory on Hand (DOH):
- Dollar General's DOH has fluctuated over the years, ranging from 63.43 days to 71.49 days, with the current value at 70.42 days.
- A higher DOH suggests slower inventory turnover, indicating that Dollar General may be holding excess inventory or facing challenges in selling products promptly.
- The recent increase in DOH compared to the prior year may indicate potential inefficiencies in managing inventory levels, impacting liquidity and profitability.

2. Days of Sales Outstanding (DSO):
- Dollar General has shown a consistent and efficient collection of receivables, with DSO ranging from 0.99 days to 1.32 days over the past five years, currently standing at 1.07 days.
- A low DSO indicates that Dollar General collects payments from customers quickly, improving cash flow and reducing the risk of bad debts.
- The slight decrease in DSO from the prior year suggests effective credit management practices, enhancing the company's financial health and operational efficiency.

3. Number of Days of Payables:
- Dollar General has maintained a stable range of days of payables, from 36.12 days to 44.02 days, with the most recent value at 36.12 days.
- A lower number of days of payables reflects a shorter time taken to settle accounts payable, potentially indicating strong supplier relationships or favorable payment terms.
- The consistent decrease in days of payables over the years may signal improved working capital management and cash flow optimization for Dollar General.

Overall, while Dollar General has shown efficient collection of receivables and manageability of payables, the recent increase in days of inventory on hand suggests potential challenges in inventory management that could impact the company's operational efficiency and financial performance. Monitoring these activity ratios can help identify areas for improvement and drive strategic decision-making within Dollar General Corporation.

Long-term

	Feb 2, 2024	Feb 3, 2023	Jan 28, 2022	Jan 29, 2021	Jan 31, 2020
Fixed asset turnover	6.30	7.19	7.84	8.61	8.44
Total asset turnover	1.25	1.29	1.29	1.30	1.21

Dollar General Corporation's long-term activity ratios provide insights into its efficiency in utilizing fixed assets and total assets to generate sales revenue over the years. The fixed asset turnover has exhibited a decreasing trend from 8.44 in 2020 to 6.30 in 2024, indicating that the company's fixed assets are generating less revenue relative to previous years. This could be a result of changes in the company's business operations, asset base, or industry dynamics.

On the other hand, the total asset turnover has been relatively stable, ranging between 1.21 and 1.30 over the five-year period. This implies that Dollar General is efficiently utilizing its total assets to generate sales revenue, maintaining a consistent level of productivity in this aspect. Overall, while the fixed asset turnover has shown a decline, the total asset turnover reflects stable efficiency in asset utilization for revenue generation, suggesting a balanced performance in managing the company's asset base for sales growth.