H&R Block Inc (HRB)

Short-term

Turnover ratios

The activity ratios of H&R Block Inc over the specified periods indicate notable changes in operational efficiency and asset management.

Inventory Turnover:
The inventory turnover ratio demonstrates a significant increase from 7.88 times as of June 30, 2021, to 67.87 times on June 30, 2023. This sharp rise suggests an enhanced efficiency in managing inventory, possibly reflecting improved inventory management, faster product turnover, or shifts towards more service-oriented activities where inventory holding is minimal. The ratio further escalates to 111.47 times in June 30, 2024, indicating continued improvements, although data for June 30, 2022 and 2025 are unavailable, which limits a complete trend analysis.

Receivables Turnover:
This ratio exhibits a consistent upward trend, increasing from 6.43 times in 2021 to 36.21 times in 2023, and further to 52.27 times in 2024, culminating at 59.12 times in 2025. The rising receivables turnover indicates an improvement in the collection processes, reduced days sales outstanding, and more efficient management of accounts receivable. The increased frequency of receivables being converted into cash reflects positively on liquidity and operational effectiveness.

Payables Turnover:
An upward trend is also evident in payables turnover, rising from 9.30 times in 2021 to 14.48 times in 2025. This increase suggests that the company is paying its suppliers more frequently or faster, which could reflect improved cash flow management, a shift towards maintaining good supplier relationships, or strategic payment policies. The increased turnover rate indicates a more efficient use of short-term liabilities.

Working Capital Turnover:
The working capital turnover ratio improved from 6.36 in 2021 to 13.96 in 2023, maintaining similar levels at 13.77 in 2024 before data becomes unavailable for 2025. This upward trajectory indicates an increasing efficiency in utilizing working capital to generate sales. The company appears to be generating higher sales relative to its working capital, reflecting effective management of current assets and liabilities.

Summary:
Overall, the activity ratios reveal a trajectory of increasing operational efficiency from 2021 to 2024. The dramatic rise in inventory turnover suggests a transition toward leaner inventory practices or fundamentally different business activities, potentially emphasizing more service-based revenue streams. The steady improvement in receivables and payables turnover ratios indicates better management of receivables collection and supplier payments, contributing to enhanced liquidity and cash flow management. The improvements in working capital turnover affirm the company's enhanced ability to generate sales with its short-term assets and liabilities. Future analysis would benefit from complete data sets to confirm the persistence of these trends and to evaluate the impact of these operational efficiencies on overall financial performance.

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Average number of days

The activity ratios for H&R Block Inc, specifically the days of inventory on hand (DOH), days of sales outstanding (DSO), and days of payables, exhibit notable trends over the period from June 30, 2021, to June 30, 2025.

Days of Inventory on Hand (DOH):
In 2021, the company held inventory for approximately 46.30 days. This figure significantly decreased in subsequent years, with data available up to 2023, showing a reduction to 5.38 days, and further declining to 3.27 days by 2024. The absence of data for 2022 and 2025 suggests either a transition to a largely inventory-light or digital model, or a reclassification of inventory measurement. The sharp decrease indicates an improvement in inventory management efficiency or a shift toward service-oriented operations with minimal inventory holdings.

Days of Sales Outstanding (DSO):
H&R Block's DSO decreased markedly from 56.80 days in 2021 to 27.54 days in 2022, continuing to decline to 10.08 days in 2023, with further reductions to 6.98 days in 2024, and 6.17 days in 2025. This downward trend signifies a steady improvement in collection efficiency and quicker turnover of receivables, enhancing the company's cash flow and liquidity profile.

Number of Days of Payables:
The days payable decreased gradually from 39.25 days in 2021 to 31.22 days in 2022, then to 30.34 days in 2023, followed by further reductions to 28.56 days in 2024 and 25.20 days in 2025. This trend suggests an increasingly prompt payment cycle to suppliers, potentially reflecting improved liquidity, renegotiated credit terms, or strategic payment timing.

Overall Assessment:
Collectively, these ratios depict a pattern of enhanced operational efficiency. The significant reductions in DSO and the days of inventory on hand imply that H&R Block has optimized its receivables collection and minimized inventory levels over time. The decreasing days of payables indicate a faster payment cycle, which, when combined with the rising efficiency in receivables and inventory management, suggests the company is actively managing its working capital to improve liquidity and operational agility. However, the diminishing gap between payables and receivables, alongside decreasing inventory, also warrants consideration of the company's strategy to balance cash flow and supplier relationships.

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Long-term

The analysis of H&R Block Inc.'s long-term activity ratios reveals distinct trends over the periods ending June 30, 2021, through June 30, 2024.

The fixed asset turnover ratio demonstrates significant variability, with a notable peak at 26.71 times in the fiscal year ending June 30, 2023. Prior to this peak, the ratio increased steadily from 5.83 in 2021 to 6.28 in 2022. The sharp rise in 2023 suggests a period of highly efficient use of fixed assets to generate revenue, which may be attributable to operational improvements, asset disposals, or restructuring efforts that optimized asset utilization. However, this elevated ratio was not sustained in 2024, when it declined sharply to 6.09, closer to the levels observed in 2021 and 2022, indicating a potential normalization or challenge in maintaining previous efficiency levels.

The total asset turnover ratio reflects a more moderate upward trend, increasing gradually from 0.93 in 2021 to 1.13 in 2023, with a subsequent slight stabilization at 1.12 in 2024. This consistent improvement suggests that H&R Block has been increasingly effective in utilizing its overall assets to generate sales during this period. The upward trend signifies improved operational efficiency and asset management, with the ratio approaching and surpassing the 1.0 threshold, indicating that the company generates more revenue per dollar of assets than in previous years.

In summary, the data indicates that H&R Block experienced a marked enhancement in fixed asset efficiency in 2023, followed by a decline in 2024, whereas the overall asset utilization improved steadily over the observed period. These trends reflect efforts to optimize asset use and could be influenced by strategic operational changes or shifts in business activities, which would warrant further qualitative analysis to fully understand the underlying factors.