Hims Hers Health Inc (HIMS)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Inventory turnover | 4.71 | 6.99 | 5.48 | 4.97 | 11.09 |
| Receivables turnover | 242.05 | 130.15 | 135.11 | 66.31 | 135.23 |
| Payables turnover | 3.33 | 3.65 | 3.65 | 3.43 | 4.87 |
| Working capital turnover | 8.46 | 4.94 | 3.12 | 1.43 | 1.52 |
Hims Hers Health Inc's inventory turnover has been fluctuating over the years, indicating changes in the efficiency of managing inventory. The ratio decreased from 11.09 in 2020 to 4.97 in 2021, signifying a decrease in the number of times inventory was sold and replaced during the year. Although it improved slightly in 2022 and 2023 to 5.48 and 6.99 respectively, it decreased again to 4.71 in 2024, suggesting a potential issue in managing inventory levels efficiently.
The receivables turnover ratio portrays the effectiveness of the company in collecting outstanding receivables. Hims Hers Health Inc experienced a significant drop in receivables turnover from 135.23 in 2020 to 66.31 in 2021, indicating a longer collection period for receivables. However, the ratio improved in the following years, reaching 242.05 in 2024, signifying a substantial enhancement in the collection efficiency.
The payables turnover ratio demonstrates how quickly the company pays its suppliers. Hims Hers Health Inc's payables turnover has been relatively stable over the years, ranging from 3.33 to 4.87. This consistency suggests the company has effectively managed its payments to suppliers without significant variations.
The working capital turnover ratio reflects how efficiently the company utilizes its working capital to generate sales. Hims Hers Health Inc's working capital turnover increased significantly from 1.52 in 2020 to 8.46 in 2024, indicating a substantial improvement in utilizing working capital to support revenue generation. This suggests that the company has become more efficient in turning its working capital into sales over the years.
Average number of days
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 77.51 | 52.21 | 66.59 | 73.44 | 32.90 |
| Days of sales outstanding (DSO) | days | 1.51 | 2.80 | 2.70 | 5.50 | 2.70 |
| Number of days of payables | days | 109.70 | 100.10 | 99.94 | 106.38 | 74.90 |
Hims Hers Health Inc's activity ratios provide insight into the efficiency of the company's operations. Here's a detailed analysis based on the provided data:
1. Days of Inventory on Hand (DOH):
- The average number of days inventory is held by the company increased from 32.90 days in 2020 to 77.51 days in 2024. This suggests a trend of holding inventory for a longer period, which could tie up capital and potentially lead to issues related to inventory obsolescence and storage costs.
- Despite fluctuations, the company should aim to manage its inventory levels effectively to optimize working capital and operational efficiency.
2. Days of Sales Outstanding (DSO):
- The average collection period for accounts receivable ranged from 1.51 days in 2024 to 5.50 days in 2021. A lower DSO indicates that the company is collecting its receivables more quickly, improving cash flow and reducing the risk of bad debts.
- The company has shown efficiency in collecting receivables, with a decreasing trend in DSO over the years, indicating effective credit management practices.
3. Number of Days of Payables:
- The average number of days the company takes to pay its suppliers increased from 74.90 days in 2020 to 109.70 days in 2024. A longer payment period could indicate liquidity constraints or strained relationships with suppliers.
- While extending payables can offer short-term cash flow benefits, it is important for the company to strike a balance in managing payables to maintain good supplier relationships and avoid potential supply chain disruptions.
Overall, Hims Hers Health Inc should focus on optimizing its inventory levels, maintaining efficient accounts receivable collection processes, and managing payables effectively to enhance its overall operational efficiency and financial performance.
Long-term
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Fixed asset turnover | — | — | 175.64 | 123.58 | 87.50 |
| Total asset turnover | 2.09 | 1.98 | 1.44 | 0.65 | 1.25 |
The Fixed Asset Turnover ratio indicates how efficiently a company is utilizing its fixed assets to generate revenue. For Hims Hers Health Inc, the ratio has shown an increasing trend over the years, from 87.50 in 2020 to 175.64 in 2023. However, the data for 2024 is missing.
This signifies that the company has been able to generate more revenue per dollar of fixed assets invested, reflecting improved operational efficiency and asset utilization.
Total Asset Turnover ratio measures the company's effectiveness in generating revenue from its total assets. Hims Hers Health Inc's Total Asset Turnover ratio fluctuated, with a significant decrease in 2021 at 0.65 followed by an increase to 2.09 in 2024.
The fluctuation in this ratio suggests varying levels of asset utilization and revenue generation efficiency over the years, which may be influenced by changes in business strategy, asset structure, or overall company performance. The upward trend in recent years indicates an improvement in the company's ability to generate sales relative to its total asset base.