Hims Hers Health Inc (HIMS)

Short-term

Turnover ratios

Hims Hers Health Inc's inventory turnover has been improving steadily over the past five years, indicating that the company has been managing its inventory more efficiently. The ratio increased from 5.48 in 2022 to 6.99 in 2023, showing that the company sold its inventory 6.99 times during the year.

The receivables turnover ratio has been relatively stable over the past few years, with a high turnover rate in 2023 of 130.15, indicating that the company collects its receivables efficiently, on average over 130 times during the year. This implies strong credit control and effective management of accounts receivable.

The payables turnover ratio has also remained quite steady, hovering around 3.43 to 4.87 over the past five years. A lower ratio like this suggests that the company takes longer to pay its suppliers, potentially indicating good working relationships with suppliers while keeping cash flow intact.

The working capital turnover has shown improvement from 2019 to 2023, with a significant decrease from 121.59 to 4.94. This ratio indicates how effectively the company is using its working capital to generate revenue. The lower the ratio, the more efficient the company is in utilizing its working capital to generate sales.

Overall, the activity ratios of Hims Hers Health Inc reflect efficient management of inventory, receivables, payables, and working capital, signaling effective operational performance and financial management.

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Average number of days

The Days of Inventory on Hand (DOH) for Hims Hers Health Inc has shown a fluctuating trend over the past five years, ranging from 32.90 days in 2020 to 73.44 days in 2021, before decreasing to 52.21 days in 2023. This indicates that the company has been managing its inventory levels differently each year, possibly due to changes in demand or inventory control measures.

The Days of Sales Outstanding (DSO) has been relatively stable over the years, with slight fluctuations between 2.70 days and 5.50 days. This suggests that the company has been efficient in collecting its accounts receivable promptly, with a minimal impact on the overall cash flow cycle.

In terms of the Number of Days of Payables, there has been a consistent increasing trend from 0.17 days in 2019 to 100.10 days in 2023. This indicates that the company has been taking longer to pay its suppliers over the years, potentially benefiting from extended payment terms or managing cash flow strategically.

Overall, the activity ratios of Hims Hers Health Inc suggest that the company has been actively managing its inventory levels, maintaining efficient accounts receivable collection practices, and strategically handling its accounts payable to optimize its cash flow cycle and overall liquidity position.

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Long-term

Hims Hers Health Inc's long-term activity ratios provide insights into the company's efficiency in utilizing its fixed assets and total assets to generate revenue over the years.

1. Fixed Asset Turnover: The fixed asset turnover ratio measures how efficiently a company utilizes its fixed assets to generate sales. Hims Hers Health Inc's fixed asset turnover has shown significant fluctuations over the analyzed period. The sudden increase from 87.50 in 2020 to 175.64 in 2022 indicates a substantial improvement in utilizing fixed assets effectively in generating revenue. However, the lack of data for 2023 makes it challenging to assess the current trend in this ratio accurately.

2. Total Asset Turnover: The total asset turnover ratio indicates the efficiency of a company in using all its assets to generate sales. Hims Hers Health Inc's total asset turnover has displayed varying trends, with a notable increase from 0.40 in 2019 to 1.44 in 2022, suggesting improved efficiency in asset utilization. The ratio dropping to 0.65 in 2021 indicates a decline in the efficiency of total asset turnover, which may require further analysis to understand the underlying reasons behind this decrease.

Overall, the analysis of Hims Hers Health Inc's long-term activity ratios reveals a mixed performance in asset utilization efficiency, with fluctuations in both fixed asset turnover and total asset turnover ratios. Further investigation into the company's operational strategies and changes in the business environment may help in understanding the factors influencing these ratios and assessing the company's long-term sustainability.