Hanesbrands Inc (HBI)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Inventory turnover | 4.00 | 2.95 | 3.96 | 4.54 | 3.28 |
| Receivables turnover | 10.09 | 8.63 | 7.54 | 7.96 | 8.53 |
| Payables turnover | 7.43 | 6.37 | 5.17 | 6.97 | 6.52 |
| Working capital turnover | 6.35 | 4.64 | 5.62 | 4.69 | 4.79 |
Inventory turnover measures how many times a company's inventory is sold and replaced over a period. Hanesbrands Inc's inventory turnover has been relatively consistent over the past five years, ranging from 2.95 to 4.54 times. This suggests that the company efficiently manages its inventory and is able to sell and replace its products at a moderate to high rate.
Receivables turnover reflects how effectively a company collects payment from its customers. Hanesbrands Inc's receivables turnover has shown a generally increasing trend over the last five years, ranging from 7.54 to 10.09 times. This indicates that the company has been improving in collecting payments from its customers more efficiently.
Payables turnover, on the other hand, measures how quickly a company pays its suppliers. Hanesbrands Inc's payables turnover fluctuated over the five-year period, ranging from 5.17 to 7.43 times. This suggests that the company has varying payment practices with its suppliers but generally pays its payables at a reasonable rate.
Working capital turnover evaluates how well a company utilizes its working capital to generate sales. Hanesbrands Inc's working capital turnover has shown a consistent and increasing trend over the past five years, ranging from 4.64 to 6.35 times. This indicates that the company has been effectively utilizing its working capital to generate sales revenue, which is a positive sign for its operational efficiency.
Overall, Hanesbrands Inc's activity ratios reflect a reasonably efficient management of its inventory, collection of receivables, payment to suppliers, and utilization of working capital to generate sales revenue over the past five years.
Average number of days
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 91.31 | 123.61 | 92.08 | 80.33 | 111.18 |
| Days of sales outstanding (DSO) | days | 36.17 | 42.29 | 48.38 | 45.85 | 42.78 |
| Number of days of payables | days | 49.14 | 57.29 | 70.62 | 52.38 | 55.95 |
Hanesbrands Inc's activity ratios provide insight into the efficiency of the company's operations.
1. Days of Inventory on Hand (DOH): This ratio indicates the number of days it takes for the company to sell its inventory. A lower DOH is generally preferable as it suggests faster inventory turnover. Hanesbrands Inc's DOH has fluctuated over the past five years, with a significant decrease in 2020 compared to 2019, followed by an increase in 2022 and a slight decrease in 2023. Overall, the trend shows some variability in managing inventory levels.
2. Days of Sales Outstanding (DSO): DSO measures how long it takes for the company to collect payment from its customers after making a sale. A lower DSO implies a quicker collection of receivables. Hanesbrands Inc has shown a decreasing trend in DSO from 2019 to 2023, which indicates improvements in receivables management and increased efficiency in collecting payments from customers.
3. Number of Days of Payables: This ratio represents the number of days it takes for the company to pay its suppliers. A higher number of days indicates the company is taking longer to pay its bills. Hanesbrands Inc's days of payables have fluctuated over the past five years, with the highest number of days in 2021 and a decrease in 2023 compared to the previous year. This variability may suggest changes in the company's payment terms or supplier relationships.
Overall, the analysis of Hanesbrands Inc's activity ratios reveals some variability in managing inventory levels, improvements in receivables management, and fluctuations in payment terms with suppliers. Future monitoring of these ratios will be important to assess the company's operational efficiency and working capital management.
Long-term
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Fixed asset turnover | 13.58 | 14.07 | 15.28 | 12.80 | 13.48 |
| Total asset turnover | 1.00 | 0.96 | 0.95 | 0.79 | 0.95 |
The fixed asset turnover ratio for Hanesbrands Inc has been relatively stable over the past five years, ranging from 12.80 to 15.28. This signifies that the company generates between 12.80 to 15.28 in sales revenue for every dollar invested in fixed assets. The consistency in this ratio indicates that the company efficiently utilizes its fixed assets to generate sales revenue.
In contrast, the total asset turnover ratio has shown some fluctuations over the same period, ranging from 0.79 to 1.00. This ratio measures the company's ability to generate sales from its total assets. An increasing trend in total asset turnover indicates improved efficiency in asset utilization. In 2023, the ratio reached 1.00, indicating that the company generated $1 in sales for each dollar of total assets.
Overall, the fixed asset turnover and total asset turnover ratios suggest that Hanesbrands Inc has been effectively leveraging its assets to generate sales revenue, with the total asset turnover showing a more varied trend compared to the fixed asset turnover.