Five Below Inc (FIVE)

Short-term

Turnover ratios

The activity ratios of Five Below Inc provide insights into the efficiency of the company's operations.

1. Inventory Turnover:
- The inventory turnover ratio measures how many times a company's inventory is sold and replaced during a specific period. In Five Below Inc's case, the inventory turnover has fluctuated over the years, with values ranging from 3.75 to 5.46. A higher inventory turnover indicates efficient management of inventory, as it suggests that products are selling quickly.

2. Receivables Turnover:
- The receivables turnover ratio reflects how efficiently a company collects payments from customers. In the provided data, the receivables turnover is not available, which may suggest that the company operates on a cash basis or that it has a quick turnover of receivables, resulting in minimal outstanding payments.

3. Payables Turnover:
- The payables turnover ratio indicates how many times a company pays its suppliers in a given period. Five Below Inc's payables turnover has been provided for select periods, with values of 12.88 and 12.46, indicating a relatively quick turnover of payables. A high payables turnover can suggest good relationships with suppliers or efficient working capital management.

4. Working Capital Turnover:
- The working capital turnover ratio assesses how efficiently a company utilizes its working capital to generate sales. Five Below Inc's working capital turnover has ranged from 6.52 to 7.30, showing strong efficiency in utilizing working capital to generate revenue over the years.

Overall, the activity ratios of Five Below Inc depict a mixed picture of operational efficiency, with notable strengths in inventory turnover and working capital turnover. These ratios indicate effective management of inventory and working capital, which are essential for sustaining operational activities and profitability.

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Average number of days

The Days of Inventory on Hand (DOH) ratio for Five Below Inc has shown some fluctuations over the years. In January 2023, it was 67.64 days, which increased to 97.24 days by January 2023, indicating a possible buildup of inventory. However, this figure decreased to 66.85 days by February 2024, suggesting better management of inventory levels. As of January 2025, the DOH stands at 95.38 days, which may require monitoring to optimize inventory turnover.

The Days of Sales Outstanding (DSO) ratio data is unavailable for each of the periods, indicating that specific information on the time taken to collect sales revenue from customers is not provided in the dataset. This lack of data makes it challenging to assess the efficiency of the company in collecting its receivables.

Regarding the Number of Days of Payables, the data reveals that Five Below Inc had 28.34 days of payables in January 2023, which slightly increased to 29.30 days by February 2024. The absence of data for January 31, 2023, and January 31, 2025, for this metric restricts a comprehensive analysis of the company's payment practices and relationships with suppliers over time.

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Long-term

The Fixed Asset Turnover ratio measures how efficiently a company is using its fixed assets to generate revenue. For Five Below Inc, the Fixed Asset Turnover ratio has remained relatively stable around 3.3 from January 28, 2023, to February 3, 2024, indicating that the company is generating approximately $3.30 in revenue for every $1 of fixed assets invested.

On the other hand, the Total Asset Turnover ratio reflects how effectively a company is utilizing all its assets to generate sales. Five Below Inc's Total Asset Turnover ratio has been slightly declining over the same period, from 0.93 in January 28, 2023, to 0.89 in January 31, 2025. This decrease suggests that the company may not be efficiently utilizing all its assets to generate revenue, which could be a concern for investors and creditors.

Overall, while Five Below Inc appears to be effectively generating revenue from its fixed assets, there may be some inefficiencies in utilizing its total assets to generate sales, as evidenced by the declining trend in the Total Asset Turnover ratio. Further investigation into the company's asset management strategies may be warranted to address these concerns and improve overall operational efficiency.