Helen of Troy Ltd (HELE)

Short-term

Turnover ratios

Inventory Turnover: Helen of Troy Ltd's inventory turnover ratio indicates how efficiently the company is managing its inventory. The ratio has been fluctuating over the years, ranging from 1.99 to 3.59. The downward trend in recent periods suggests a possible decrease in inventory efficiency, which may require further investigation.

Receivables Turnover: The data provided does not include information on receivables turnover, making it impossible to assess how quickly the company is collecting payments from its customers. A higher receivables turnover ratio is generally favorable as it indicates faster collection of receivables.

Payables Turnover: Similar to receivables turnover, the data does not include information on payables turnover. This ratio would have provided insight into how quickly the company pays its suppliers, which is crucial for managing cash flow and relationships with vendors.

Working Capital Turnover: The working capital turnover ratio measures how effectively the company is using its working capital to generate sales revenue. Helen of Troy's working capital turnover has varied between 3.42 and 5.88. A higher ratio indicates that the company is efficiently using its working capital to generate sales, while a lower ratio may signal inefficiencies in working capital management.

Overall, the analysis of these activity ratios provides a snapshot of Helen of Troy Ltd's operational efficiency and working capital management. It highlights areas of strength and potential areas for improvement that may require further attention and analysis.

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Average number of days

Based on the provided data for Helen of Troy Ltd, the analysis of the activity ratios is as follows:

1. Days of Inventory on Hand (DOH):
- The DOH represents the number of days it takes for the company to sell its entire inventory.
- The trend for Helen of Troy Ltd's DOH shows fluctuation over the period.
- The DOH increased from 101.68 days as of May 31, 2020, to 183.16 days as of August 31, 2022, before decreasing to 136.25 days as of February 29, 2024.
- The company has seen some volatility in managing its inventory levels efficiently, which could indicate challenges in inventory management and sales forecasting during certain periods.

2. Days of Sales Outstanding (DSO):
- No data is provided for DSO, which represents the average number of days it takes the company to collect payment after a sale.
- The absence of data for DSO makes it impossible to gauge the efficiency of the company in collecting payments from customers.

3. Number of Days of Payables:
- Similarly, there is no data available for the number of days of payables, which shows how long the company takes to pay its suppliers.
- Without this information, it is challenging to assess the company's ability to manage its payables effectively and its relationships with suppliers.

In conclusion, while the analysis of inventory turnover highlights some issues with inventory management for Helen of Troy Ltd, the absence of data for DSO and payables limits a comprehensive evaluation of the company's overall activity ratios and working capital efficiency. Further information on these ratios would provide a more complete picture of the company's operational performance and financial health.

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Long-term

The Fixed Asset Turnover ratio for Helen of Troy Ltd has shown fluctuations over the years, starting at 10.53 in May 2020 and peaking at 16.51 in May 2021 before declining to 5.76 in May 2023. This ratio measures how efficiently the company is utilizing its fixed assets to generate revenue, indicating that the company experienced a significant increase in revenue generated per dollar of fixed assets during the earlier period but a decline in efficiency in more recent years.

On the other hand, the Total Asset Turnover ratio, which indicates how well the company is utilizing all its assets to generate sales, has shown a decreasing trend over the years. Starting at 0.89 in May 2020, it declined to 0.61 by February 2025. This suggests a decreasing efficiency in generating sales from the total assets held by the company.

Overall, the declining trends in both Fixed Asset Turnover and Total Asset Turnover ratios indicate potential inefficiencies in the utilization of assets to generate revenue over the years, which may require further investigation and analysis by stakeholders and management to improve the company's operational efficiency and financial performance.