Dollar Tree Inc (DLTR)
Activity ratios
Short-term
Turnover ratios
| Jan 31, 2025 | Feb 3, 2024 | Jan 31, 2024 | Jan 31, 2023 | Jan 28, 2023 | |
|---|---|---|---|---|---|
| Inventory turnover | 4.22 | 3.93 | 4.16 | 3.56 | 3.38 |
| Receivables turnover | — | — | — | — | — |
| Payables turnover | — | 10.32 | — | — | 10.22 |
| Working capital turnover | 33.72 | 21.31 | 21.31 | 13.23 | 13.23 |
Inventory turnover reflects the efficiency of Dollar Tree Inc in managing its inventory levels. The trend shows an improvement over the years, with the ratio increasing from 3.38 in January 2023 to 4.22 in January 2025. This indicates that Dollar Tree has been selling its inventory more frequently in recent years.
Receivables turnover, on the other hand, is not available, suggesting that Dollar Tree does not extend credit terms to its customers or has negligible receivables that need to be collected.
Payables turnover indicates how quickly the company pays its suppliers. The data shows that Dollar Tree had a payable turnover of 10.22 in January 2023, increasing to 10.32 in February 2024. This implies that the company is managing its payables efficiently by making payments to suppliers within a reasonable timeframe.
Lastly, working capital turnover measures how effectively Dollar Tree is utilizing its working capital to generate sales. The ratios have been consistently high, indicating that the company is efficiently using its working capital to generate revenue. The ratio has increased from 13.23 in January 2023 to 33.72 in January 2025, demonstrating improved efficiency in utilizing its resources.
Average number of days
| Jan 31, 2025 | Feb 3, 2024 | Jan 31, 2024 | Jan 31, 2023 | Jan 28, 2023 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 86.43 | 92.78 | 87.73 | 102.55 | 108.09 |
| Days of sales outstanding (DSO) | days | — | — | — | — | — |
| Number of days of payables | days | — | 35.38 | — | — | 35.73 |
Based on the provided data for Dollar Tree Inc, let's analyze the activity ratios:
1. Days of Inventory on Hand (DOH):
- January 28, 2023: 108.09 days
- January 31, 2023: 102.55 days
- January 31, 2024: 87.73 days
- February 3, 2024: 92.78 days
- January 31, 2025: 86.43 days
The trend in the Days of Inventory on Hand (DOH) shows a decrease over time, indicating that Dollar Tree Inc has been more efficient in managing its inventory levels. The company has been able to reduce the number of days it takes to sell its inventory, which can lead to lower holding costs and potentially higher inventory turnover.
2. Days of Sales Outstanding (DSO):
- January 28, 2023: Not provided
- January 31, 2023: Not provided
- January 31, 2024: Not provided
- February 3, 2024: Not provided
- January 31, 2025: Not provided
Unfortunately, the data for Days of Sales Outstanding (DSO) is not available, which makes it challenging to evaluate Dollar Tree Inc's efficiency in collecting receivables from its customers.
3. Number of Days of Payables:
- January 28, 2023: 35.73 days
- January 31, 2023: Not provided
- January 31, 2024: Not provided
- February 3, 2024: 35.38 days
- January 31, 2025: Not provided
Dollar Tree Inc's Number of Days of Payables has been relatively stable around 35 days over the years. This indicates that the company takes around 35 days to pay its suppliers, which can have implications for its working capital management and relationships with vendors.
In conclusion, Dollar Tree Inc has shown improvements in its inventory management as seen through decreasing Days of Inventory on Hand. However, the lack of data for Days of Sales Outstanding limits a comprehensive analysis of the company's receivables collection efficiency. The stability in the Number of Days of Payables suggests consistent payment practices with suppliers. Monitoring and managing these activity ratios can provide insights into the company's operational efficiency and cash flow management.
See also:
Long-term
| Jan 31, 2025 | Feb 3, 2024 | Jan 31, 2024 | Jan 31, 2023 | Jan 28, 2023 | |
|---|---|---|---|---|---|
| Fixed asset turnover | — | 4.98 | — | 5.70 | 5.70 |
| Total asset turnover | 0.94 | 1.39 | 1.39 | 1.23 | 1.23 |
The fixed asset turnover ratio measures how efficiently Dollar Tree Inc is utilizing its fixed assets to generate revenue. For the periods provided, the fixed asset turnover ratio remained stable at 5.70 for January 28, 2023, and January 31, 2023, suggesting that the company is generating $5.70 in revenue for every $1 of fixed assets invested.
However, there was a decrease in the fixed asset turnover ratio to 4.98 on February 3, 2024, indicating a possible decrease in efficiency in utilizing fixed assets to generate sales. The absence of data for January 31, 2024, and January 31, 2025, limits further analysis for those periods.
On the other hand, the total asset turnover ratio reflects Dollar Tree Inc's overall efficiency in generating sales from all its assets. The total asset turnover ratio increased from 1.23 in January 28, 2023, and January 31, 2023, to 1.39 on January 31, 2024, and remained the same for February 3, 2024. This improvement suggests that the company is generating more revenue from its total assets.
However, there was a notable decline in the total asset turnover ratio to 0.94 on January 31, 2025. This decrease may indicate either a decrease in sales relative to total assets or an increase in the total assets without a proportional increase in sales.
In general, the analysis of Dollar Tree Inc's long-term activity ratios indicates fluctuations in both fixed asset turnover and total asset turnover ratios over the periods provided, reflecting changes in the company's efficiency in utilizing its assets to generate revenue.