National Vision Holdings Inc (EYE)

Short-term

Turnover ratios

National Vision Holdings Inc has shown consistently strong performance in managing its inventory over the years as evidenced by its increasing inventory turnover ratio. The company's ability to turn over its inventory efficiently improved from 12.91 in 2019 to 18.13 in 2023, indicating that it is selling its inventory more frequently each year.

In terms of managing receivables, the company has been able to collect its receivables effectively, as indicated by the high receivables turnover ratios across the years. This suggests that National Vision Holdings Inc is efficient in collecting payments from its customers, with the turnover ratio ranging from 24.50 to 37.74 during the period.

The payables turnover ratio has fluctuated over the years but generally remained at satisfactory levels. The company's ability to manage its payables improved from 25.06 in 2020 to 32.17 in 2023, indicating that it is paying its suppliers more frequently, which may lead to better relationships and potential discounts.

The working capital turnover ratio provides insights into how effectively the company is utilizing its working capital to generate sales. However, the data shows a missing value for 2023, which limits the comprehensive analysis of this metric. Still, over the available years, National Vision Holdings Inc has shown improvement in utilizing its working capital efficiently to generate sales.

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Average number of days

The activity ratios for National Vision Holdings Inc show trends in the efficiency of the company's operations over the past five years.

1. Days of Inventory on Hand (DOH): This ratio measures how many days, on average, it takes for the company to convert its inventory into sales. A lower number indicates faster inventory turnover and better management of inventory levels. National Vision Holdings Inc has shown a decreasing trend in DOH from 28.27 days in 2019 to 20.14 days in 2023, indicating an improvement in inventory management efficiency over time.

2. Days of Sales Outstanding (DSO): DSO reflects the average number of days it takes for the company to collect its accounts receivable. A lower DSO indicates that the company is collecting payments from its customers more quickly. National Vision Holdings Inc experienced fluctuations in DSO over the years, with the ratio ranging from 9.67 days in 2019 to 14.90 days in 2023. The increase in DSO in recent years may suggest potential challenges in collecting receivables efficiently.

3. Number of Days of Payables: This ratio represents the average number of days it takes for the company to pay its suppliers. A higher number of days of payables suggests that the company is taking longer to pay its debts, which can be advantageous for managing cash flow. National Vision Holdings Inc's number of days of payables ranged from 9.04 days in 2019 to 14.57 days in 2020, indicating some variability in the company's payment practices.

In summary, National Vision Holdings Inc has shown improvements in inventory management efficiency, fluctuations in accounts receivable collection, and variability in payment practices over the past five years. Monitoring these activity ratios can help assess the company's operational performance and efficiency in managing working capital.

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Long-term

National Vision Holdings Inc's long-term activity ratios provide insights into how efficiently the company utilizes its assets to generate revenues.

1. Fixed Asset Turnover:

The fixed asset turnover ratio measures how effectively the company generates sales relative to its investment in fixed assets. National Vision Holdings Inc has shown a consistent improvement in this ratio over the past five years. In 2023, the company achieved a fixed asset turnover of 6.05, indicating that for every dollar invested in fixed assets, the company generated $6.05 in sales. This demonstrates the company's efficient utilization of its fixed assets to drive revenue growth.

2. Total Asset Turnover:

The total asset turnover ratio reflects the company's ability to generate revenue from all its assets. National Vision Holdings Inc's total asset turnover has also shown a positive trend, increasing from 0.83 in 2019 to 0.98 in 2023. This suggests that the company has become more efficient in generating sales relative to its total assets over the years.

Overall, both fixed asset turnover and total asset turnover ratios indicate that National Vision Holdings Inc has been improving its asset utilization efficiency, which is a positive sign for the company's long-term growth prospects. It suggests that the company is effectively managing its assets to drive higher sales and potentially increase profitability.