Dollar Tree Inc (DLTR)

Short-term

Turnover ratios

Based on the provided data for Dollar Tree Inc, the analysis of the activity ratios is as follows:

1. Inventory Turnover:
- The inventory turnover ratio measures how efficiently the company is managing its inventory. Dollar Tree Inc's inventory turnover ratio fluctuated over the periods provided, ranging from a low of 3.31 to a high of 4.42. A higher inventory turnover ratio indicates better efficiency in selling inventory, which can lead to lower holding costs and potentially higher profits.

2. Receivables Turnover:
- The receivables turnover ratio indicates how many times a company collects its accounts receivable during a specific period. The data shows that Dollar Tree Inc's receivables turnover data is not available for the periods provided. A higher receivables turnover ratio generally indicates that the company is efficient in collecting payments from its customers.

3. Payables Turnover:
- The payables turnover ratio measures how quickly a company pays its suppliers. Dollar Tree Inc's payables turnover ratio ranged from 9.49 to 12.91 over the periods available. A higher payables turnover ratio may suggest that the company is managing its payables effectively and potentially benefiting from favorable credit terms from suppliers.

4. Working Capital Turnover:
- The working capital turnover ratio reflects how efficiently a company is using its working capital to generate sales. Dollar Tree Inc's working capital turnover ratio varied significantly, with a notable increase in the ratio in July 2024 and October 2024. A higher working capital turnover ratio indicates that the company is generating higher sales relative to its working capital, which can be a positive sign of operational efficiency.

Overall, the analysis of Dollar Tree Inc's activity ratios suggests fluctuations in efficiency levels over the periods provided. Further analysis and comparison with industry benchmarks may provide greater insights into the company's operational performance.

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Average number of days

Based on the provided data, Dollar Tree Inc's activity ratios can be analyzed as follows:

1. Days of Inventory on Hand (DOH):
- The DOH measures how many days, on average, a company holds its inventory before selling it.
- Dollar Tree Inc's inventory holding period has shown some fluctuations over the periods, ranging from a low of 82.56 days to a high of 110.35 days.
- A decreasing trend in DOH indicates that Dollar Tree Inc is managing its inventory more efficiently, while an increasing trend may suggest inventory management challenges.

2. Days of Sales Outstanding (DSO):
- Unfortunately, the data does not include information on DSO for Dollar Tree Inc, which would have provided insights into how quickly the company collects its outstanding accounts receivable.
- DSO is a key metric in assessing the efficiency of the company's credit and collection policies.

3. Number of Days of Payables:
- The number of days of payables represents the average number of days it takes for a company to pay its suppliers.
- Dollar Tree Inc's payables period has varied over the periods, with some periods having information available while others are not provided.
- A longer payables period allows Dollar Tree Inc to hold onto cash longer, improving liquidity, but it may strain supplier relationships if extended too far.

Overall, proper management of activity ratios like DOH and payables period is crucial for Dollar Tree Inc to optimize working capital and maintain healthy liquidity levels.

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See also:

Dollar Tree Inc Short-term (Operating) Activity Ratios (Quarterly Data)

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Long-term

Long-term activity ratios such as Fixed Asset Turnover and Total Asset Turnover provide insights into how efficiently a company utilizes its assets to generate sales revenue.

Dollar Tree Inc's Fixed Asset Turnover ratio has shown fluctuation over the years, with values ranging from 2.44 to 6.09. This ratio measures the company's ability to generate sales from its fixed assets, such as property, plant, and equipment. The company experienced a significant increase in Fixed Asset Turnover from January 31, 2022, to April 30, 2022, indicating improved efficiency in utilizing its fixed assets to generate revenue. Subsequently, the ratio remained relatively stable around 5.00, reflecting consistent performance in this aspect.

On the other hand, the Total Asset Turnover ratio of Dollar Tree Inc has shown a more stable trend over time, with values ranging from 0.94 to 1.46. This ratio evaluates how efficiently the company generates sales from all its assets, including both fixed and current assets. Dollar Tree Inc's Total Asset Turnover ratio gradually increased over the years, reaching its peak at 1.46 on April 30, 2024, indicating an improved ability to generate revenue relative to its assets.

Overall, both Fixed Asset Turnover and Total Asset Turnover ratios suggest that Dollar Tree Inc effectively leverages its assets to drive sales growth and generate revenue, demonstrating good operational efficiency and asset utilization.

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See also:

Dollar Tree Inc Long-term (Investment) Activity Ratios (Quarterly Data)