Leslies Inc (LESL)

Short-term

Turnover ratios

Inventory Turnover:
Leslies Inc's inventory turnover has been improving over the years, indicating that the company is managing its inventory more effectively. A higher inventory turnover ratio suggests that the company is selling its inventory faster, which can lead to reduced carrying costs and potential obsolescence risks.

Receivables Turnover:
The receivables turnover ratio has fluctuated over the years, but generally, it indicates that Leslies Inc is collecting its receivables more efficiently. A higher receivables turnover ratio means that the company is collecting cash from its customers more quickly, which can improve cash flow and reduce the risk of bad debts.

Payables Turnover:
The payables turnover ratio has also shown some variability, but overall, it seems that Leslies Inc is taking longer to pay its suppliers. A lower payables turnover ratio may indicate that the company is utilizing trade credit effectively or negotiating favorable payment terms with its suppliers.

Working Capital Turnover:
Leslies Inc's working capital turnover has been increasing steadily, suggesting that the company is generating more sales revenue for each dollar of working capital employed. A higher working capital turnover ratio indicates efficient utilization of working capital and better management of the company's resources.

Overall, Leslies Inc's activity ratios reflect positive trends in terms of inventory management, receivables collection, and working capital efficiency. However, there may be opportunities to optimize payables management further to enhance cash flow and supplier relationships.

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Average number of days

Leslies Inc's activity ratios provide insight into the efficiency of its operations and management of its working capital.

1. Days of Inventory on Hand (DOH):
- In 2024, Leslies Inc reduced its days of inventory on hand to 65.47 days, indicating that the company is managing its inventory more efficiently compared to the previous years. This implies that inventory turnover has improved, which can lead to lower carrying costs and reduced risk of obsolescence.

2. Days of Sales Outstanding (DSO):
- The days of sales outstanding for Leslies Inc increased slightly to 13.77 days in 2024. This suggests that the company is taking longer to collect its accounts receivable compared to the prior year. A higher DSO could indicate potential issues with customer credit policies or collection procedures.

3. Number of Days of Payables:
- Leslies Inc has been gradually decreasing its number of days of payables since 2021, reaching 18.90 days in 2024. A lower number of days of payables indicates that the company is paying its suppliers more quickly. While this can improve relationships with suppliers, it may also strain cash flow if not managed effectively.

Overall, Leslies Inc's activity ratios reflect improvements in inventory management and payables, but a slight deterioration in accounts receivable collection efficiency. It is important for the company to continue monitoring and optimizing these ratios to ensure balanced working capital management and sustainable operational performance.

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Long-term

The fixed asset turnover ratio of Leslie's Inc has been gradually decreasing over the past four years, indicating that the company is generating less revenue relative to its investment in fixed assets. This may suggest potential inefficiencies in utilizing fixed assets to generate sales.

On the other hand, the total asset turnover ratio has shown fluctuation over the same period, with a slight increase in 2023 followed by a decrease in 2024. This ratio reflects how efficiently the company is using all its assets to generate sales.

Overall, the trend in both ratios indicates that there may be room for improvement in optimizing asset utilization to enhance revenue generation and operational efficiency in the long term for Leslie's Inc.