Floor & Decor Holdings Inc (FND)

Short-term

Turnover ratios

Floor & Decor Holdings Inc's Inventory Turnover ratio has been fluctuating over the past five years, declining from 2.13 in 2020 to 1.96 in 2022 before showing improvement to 2.23 in 2024. This indicates the number of times the company's inventory is sold and replaced within a year. The decreasing trend from 2020 to 2022 could suggest inefficiencies in managing inventory, but the rebound in 2024 is a positive sign.

The Receivables Turnover ratio is not provided, indicating that there is no data available to analyze how efficiently the company collects outstanding payments from customers.

Similarly, the Payables Turnover ratio is not available, which means there is no information on how quickly the company is paying its suppliers.

The Working Capital Turnover ratio for Floor & Decor Holdings Inc has shown significant variability, increasing from 7.10 in 2020 to 26.81 in 2023 before declining to 17.95 in 2024. This ratio measures how effectively the company generates revenue from its working capital. The sharp increase in 2023 suggests improved efficiency in utilizing working capital to drive sales, although the decline in 2024 indicates a potential need for further assessment of working capital management strategies.

Overall, Floor & Decor Holdings Inc's activity ratios reflect mixed performance in managing its inventory, working capital, and payables, with room for improvement in optimizing these operational aspects for better financial efficiency.

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Average number of days

Floor & Decor Holdings Inc's activity ratios show how efficiently the company manages its assets and liabilities.

1. Days of Inventory on Hand (DOH):
- The trend in DOH shows that the number of days it takes for Floor & Decor to sell its inventory has increased over the years, from 171.62 days in 2020 to 163.56 days in 2024.
- This indicates that the company is holding onto its inventory for a longer period, which may tie up cash and increase storage costs.

2. Days of Sales Outstanding (DSO):
- The data provided does not include Days of Sales Outstanding (DSO) for Floor & Decor Holdings Inc for any of the years.
- DSO measures how quickly the company collects payment from its customers and a higher DSO could indicate potential issues with accounts receivable management.

3. Number of Days of Payables:
- Similarly, the information does not provide the Number of Days of Payables for Floor & Decor Holdings Inc for any of the years.
- A longer period of payables indicates that the company is taking longer to pay its suppliers, which could be beneficial in terms of cash flow management.

In conclusion, based on the limited data provided, it appears that Floor & Decor Holdings Inc has been holding onto its inventory for a longer period over the years. However, the lack of information on DSO and payables makes it difficult to assess the overall efficiency of the company's working capital management.

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Long-term

Floor & Decor Holdings Inc's fixed asset turnover ratio has shown a declining trend over the last few years, indicating a decrease in the efficiency of utilizing fixed assets to generate sales. The ratio was 4.19 in 2020, but it decreased to 1.73 in 2022. This significant decline suggests that the company may not be effectively leveraging its fixed assets to drive revenue growth.

On the other hand, Floor & Decor's total asset turnover ratio has shown some fluctuations over the same period. The ratio was 0.84 in 2020, increased to 0.92 in 2021, peaked at 0.98 in 2022, but then decreased to 0.88 in 2024. This indicates that the company's ability to generate sales from its total assets improved initially but has slightly weakened in recent years.

Overall, the declining trend in the fixed asset turnover ratio coupled with the fluctuating total asset turnover ratio may signal that Floor & Decor Holdings Inc needs to assess its asset management strategies to improve efficiency in utilizing both fixed and total assets to drive sales and profitability.