Dollar Tree Inc (DLTR)
Activity ratios
Short-term
Turnover ratios
| Feb 3, 2024 | Jan 28, 2023 | Jan 29, 2022 | Jan 30, 2021 | Feb 1, 2020 | |
|---|---|---|---|---|---|
| Inventory turnover | 3.93 | 3.38 | 4.07 | 4.92 | 4.70 |
| Receivables turnover | — | — | — | — | — |
| Payables turnover | 10.32 | 10.22 | 9.87 | 11.97 | 12.40 |
| Working capital turnover | 21.31 | 13.23 | 18.37 | 19.32 | 32.66 |
Inventory turnover measures how many times a company sells and replenishes its inventory during a certain period. Dollar Tree Inc's inventory turnover has fluctuated over the past five years, ranging from a low of 3.38 in January 2023 to a high of 4.92 in January 2021. The latest figure of 3.93 as of February 3, 2024, indicates that Dollar Tree is turning over its inventory approximately 3.93 times in a year, which is crucial for managing inventory efficiently.
Receivables turnover, which shows how quickly a company collects its accounts receivable, is not provided in the data table. Analyzing this ratio could have provided insights into Dollar Tree's collection efficiency and credit policies.
The payables turnover ratio reveals how quickly a company pays its suppliers. Dollar Tree's payables turnover has been relatively stable over the years, with the latest figure at 10.32 as of February 3, 2024. This suggests that the company is paying its suppliers approximately 10.32 times a year, indicating effective management of payables.
Working capital turnover indicates how efficiently a company uses its working capital to generate sales. Dollar Tree's working capital turnover has varied significantly over the years, with the latest figure standing at 21.31 as of February 3, 2024. This indicates that Dollar Tree is generating sales 21.31 times for each dollar of working capital invested, showing strong efficiency in utilizing its resources.
Overall, Dollar Tree Inc's activity ratios reflect a mixed performance in managing its operating cycle. While the inventory turnover and working capital turnover ratios indicate good efficiency, the lack of data on receivables turnover limits a complete assessment of the company's overall asset management effectiveness.
Average number of days
| Feb 3, 2024 | Jan 28, 2023 | Jan 29, 2022 | Jan 30, 2021 | Feb 1, 2020 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 92.78 | 108.09 | 89.71 | 74.14 | 77.58 |
| Days of sales outstanding (DSO) | days | — | — | — | — | — |
| Number of days of payables | days | 35.38 | 35.73 | 36.98 | 30.49 | 29.44 |
Days of inventory on hand (DOH) for Dollar Tree Inc has shown some fluctuation over the past five years, with the highest level recorded in the fiscal year ending January 28, 2023, at 108.09 days, and the lowest level in the fiscal year ending January 30, 2021, at 74.14 days. This ratio indicates that, on average, the company holds inventory for approximately 92.78 days before selling it.
Days of sales outstanding (DSO) data is not available for analysis on Dollar Tree Inc for the specified years, so it's hard to draw conclusions regarding the efficiency of the company in collecting its receivables from customers.
The number of days of payables for Dollar Tree Inc has shown a slight upward trend over the five-year period, indicating that the company is taking slightly longer to pay its suppliers. The highest level of days of payables was recorded in the fiscal year ending January 29, 2022, at 36.98 days, while the lowest level was in the fiscal year ending Feb 1, 2020, at 29.44 days. On average, the company takes around 35.38 days to pay its suppliers.
Overall, by analyzing these activity ratios, it seems that Dollar Tree Inc has been making changes in how it manages its inventory and payables over the years, which could impact its overall operational efficiency and working capital management.
See also:
Long-term
| Feb 3, 2024 | Jan 28, 2023 | Jan 29, 2022 | Jan 30, 2021 | Feb 1, 2020 | |
|---|---|---|---|---|---|
| Fixed asset turnover | 4.98 | 5.70 | 5.88 | 6.20 | 6.08 |
| Total asset turnover | 1.39 | 1.23 | 1.21 | 1.23 | 1.21 |
Dollar Tree Inc's fixed asset turnover has gradually declined over the past five years, from 6.08 in 2020 to 4.98 in 2024. This indicates that the company is generating less revenue per dollar invested in fixed assets. However, the fixed asset turnover ratio remains relatively high, suggesting efficient utilization of fixed assets to generate sales.
On the other hand, the total asset turnover ratio has fluctuated over the same period, with a slight increase in 2024 compared to 2023. This indicates that Dollar Tree Inc generated $1.39 in sales for every $1 invested in total assets in 2024. The total asset turnover ratio reflects the company's overall efficiency in generating sales from all assets, including fixed and current assets.
Overall, the declining trend in fixed asset turnover may indicate potential inefficiencies in utilizing fixed assets to generate revenue. It is important for Dollar Tree Inc to closely monitor and improve its utilization of fixed assets to enhance profitability and operational efficiency.