Five Below Inc (FIVE)

Short-term

Turnover ratios

Five Below Inc's inventory turnover has been relatively consistent over the past five years, ranging from 5.23 to 6.70 times. This indicates that the company efficiently manages its inventory levels, with a higher turnover generally being more favorable.

The lack of data for receivables turnover suggests that Five Below Inc may not extend credit to customers or the information is not readily available.

The payables turnover has also shown consistency, ranging from 12.46 to 13.60 times. This indicates that the company pays its suppliers in a timely manner, with a higher turnover being more favorable as it reflects efficient management of payable obligations.

The working capital turnover has varied over the years, with the highest turnover of 8.96 in January 2022 and the lowest of 5.87 in February 2020. This ratio reflects how efficiently the company is utilizing its working capital to generate sales. An increasing trend in working capital turnover is generally positive as it implies effective utilization of resources.

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Average number of days

Days of Inventory on Hand (DOH) measures the number of days it takes for a company to turn its inventory into sales. Five Below Inc's inventory turnover has varied over the past five years, with the DOH ranging from 54.44 days to 69.83 days. The decreasing trend from 2021 to 2022 suggests that the company was able to manage its inventory more efficiently in 2022 compared to 2021.

Days of Sales Outstanding (DSO) indicates the average number of days it takes for a company to collect its accounts receivable. Unfortunately, DSO data is not available for Five Below Inc for the past five years, so no specific analysis can be provided for this metric.

Number of Days of Payables shows how long a company takes to pay its suppliers. Five Below Inc has been increasing its payment period to suppliers over the past five years, with the number of days of payables increasing from 26.83 days in 2021 to 29.30 days in 2024. This extension in payment periods can improve cash flow management for the company.

In conclusion, Five Below Inc has shown fluctuations in its activity ratios over the years, indicating varying efficiency in managing inventory and payables. The lack of data for DSO makes it challenging to provide a complete analysis, but the trends in DOH and payables days suggest some improvements in inventory and cash management practices.

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Long-term

The fixed asset turnover ratio of Five Below Inc has shown a declining trend over the past five years, from 4.21 in 2020 to 3.14 in 2024. This suggests that the company is generating $3.14 in sales for every dollar invested in fixed assets, indicating a decrease in efficiency in utilizing its fixed assets to generate revenues.

In contrast, the total asset turnover ratio has fluctuated over the same period, with a peak of 0.99 in 2022 and a low of 0.85 in 2021. The current total asset turnover ratio stands at 0.92 in 2024. This ratio indicates that the company is generating $0.92 in sales for every dollar invested in total assets.

Overall, the declining fixed asset turnover ratio and relatively stable total asset turnover ratio may suggest that Five Below Inc is facing challenges in effectively utilizing its fixed assets to generate sales. This trend should be monitored closely to ensure optimal asset utilization and efficiency in the company's operations.