Helen of Troy Ltd (HELE)

Short-term

Turnover ratios

The activity ratios of Helen of Troy Ltd provide insights into the efficiency of the company's operations over the past five years.

1. Inventory turnover:
- The inventory turnover ratio indicates how many times inventory is sold and replaced during a period.
- Helen of Troy's inventory turnover has been relatively stable, ranging from 3.52 to 6.05 over the past five years.
- The increasing trend from 2021 to 2020 suggests an improvement in managing inventory levels and sales.

2. Receivables turnover:
- The receivables turnover ratio measures how efficiently the company collects outstanding receivables from customers.
- Helen of Troy's receivables turnover has fluctuated between 4.84 and 5.45 over the period.
- A higher turnover ratio indicates faster collection of receivables, which can improve cash flow.

3. Payables turnover:
- The payables turnover ratio reflects how quickly the company pays its suppliers.
- Helen of Troy's payables turnover has varied significantly, ranging from 5.48 to 10.16 in the last five years.
- A higher turnover ratio implies faster payment to suppliers, which can impact relationships with vendors.

4. Working capital turnover:
- The working capital turnover ratio measures how efficiently working capital is used to generate sales.
- Helen of Troy's working capital turnover has shown fluctuations but has generally remained above 4.
- A higher turnover ratio indicates that the company is effectively utilizing its working capital to support revenue generation.

Overall, the analysis of Helen of Troy's activity ratios suggests variations in the efficiency of inventory management, receivables collection, payables payment, and working capital utilization over the past five years. Continual monitoring and improvement in these activity ratios can lead to enhanced operational efficiency and financial performance.

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Average number of days

Helen of Troy Ltd's activity ratios provide insight into the efficiency of the company's operations in managing its inventory, receivables, and payables.

1. Days of inventory on hand (DOH):
- Helen of Troy Ltd's DOH has fluctuated over the past five years, ranging from 60.34 days in 2020 to 103.72 days in 2022. A higher DOH indicates that the company is holding inventory for a longer period, which may tie up capital and increase carrying costs. The decreasing trend from 2022 to 2024 suggests improved inventory management efficiency.

2. Days of sales outstanding (DSO):
- The DSO for Helen of Troy Ltd has varied between 66.92 days in 2021 to 75.47 days in 2022. A higher DSO implies that the company takes longer to collect outstanding receivables, which could impact cash flow. The decreasing trend from 2022 to 2024 indicates enhanced accounts receivable management.

3. Number of days of payables:
- Helen of Troy Ltd's days of payables have fluctuated over the years, with the number of days varying from 35.94 days in 2020 to 66.60 days in 2021. A higher number of days of payables suggests that the company is taking longer to pay its suppliers, which could impact relationships but can also improve cash flow. The increase in days of payables from 2020 to 2021 indicates a shift towards a longer payment period.

Overall, the analysis of Helen of Troy Ltd's activity ratios highlights the importance of managing inventory levels, collecting receivables efficiently, and balancing payment terms with suppliers to optimize cash flow and operational efficiency.

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Long-term

Helen of Troy Ltd's long-term activity ratios reflect its efficiency in utilizing fixed and total assets to generate sales over the past five fiscal years. The fixed asset turnover ratio has shown a consistent level of performance, ranging from 5.78 to 15.28, indicating the company's ability to generate sales relative to its investment in fixed assets. However, there was a noticeable decrease in this ratio from 2021 to 2022, suggesting a potential decline in the efficiency of utilizing fixed assets during that period.

On the other hand, the total asset turnover ratio has exhibited a declining trend over the same period, with values decreasing from 0.92 in 2021 to 0.69 in 2024. This implies that the company's overall efficiency in generating sales in relation to its total assets has weakened over time. The lower total asset turnover could indicate either an increase in the company's asset base without a proportionate increase in sales or a decline in sales relative to its asset base.

Overall, the analysis of Helen of Troy Ltd's long-term activity ratios suggests that the company may need to focus on improving its efficiency in utilizing both fixed and total assets to enhance its revenue generation capabilities and optimize its asset utilization efficiency in the future.