Leslies Inc (LESL)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | |
|---|---|---|---|---|---|---|---|---|---|---|
| Inventory turnover | 3.77 | 4.08 | 2.91 | 2.59 | 3.18 | 3.71 | 3.57 | 3.53 | 4.82 | 5.78 |
| Receivables turnover | 51.58 | 39.75 | 26.10 | — | 30.18 | 30.73 | 29.20 | 30.14 | 31.05 | 29.88 |
| Payables turnover | 19.81 | 21.70 | 8.61 | 9.12 | 11.64 | 8.57 | 5.89 | 7.57 | 11.84 | 11.38 |
| Working capital turnover | 7.35 | 7.22 | 6.57 | 5.10 | 6.05 | 7.88 | 7.36 | 10.40 | 11.14 | 4.45 |
The activity ratios of Leslies Inc provide insights into how efficiently the company is managing its assets and liabilities.
1. Inventory Turnover: The inventory turnover ratio measures how many times a company sells and replaces its inventory within a specific period. Leslies Inc's inventory turnover has been fluctuating, with a peak of 5.78 in Q3 2021 and a low of 2.59 in Q1 2023. Overall, the company's inventory turnover indicates that it takes approximately between 2.5 to 5.0 times to sell and replace its inventory annually.
2. Receivables Turnover: The receivables turnover ratio reflects how quickly a company collects cash from its credit sales. Leslies Inc's receivables turnover has been volatile, ranging from 26.10 to 51.58. The higher turnover ratios suggest that the company is effective at collecting cash from credit sales, with Q4 2023 being the most prominent.
3. Payables Turnover: The payables turnover ratio indicates how long it takes a company to pay its suppliers. Leslies Inc's payables turnover has varied between 5.89 and 21.70. A higher turnover ratio suggests that the company is settling its payables more quickly, which may indicate effective cash management.
4. Working Capital Turnover: The working capital turnover ratio shows how efficiently a company is utilizing its working capital to generate sales. Leslies Inc's working capital turnover has been inconsistent, with Q4 2022 showing the highest turnover of 11.14. The varying ratios indicate fluctuations in the company's ability to generate sales relative to its working capital.
Overall, Leslies Inc's activity ratios demonstrate fluctuations in the efficiency of managing its inventory, receivables, payables, and working capital. It is essential for the company to monitor and analyze these ratios regularly to optimize its operational efficiency and financial performance.
Average number of days
| Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 96.84 | 89.56 | 125.58 | 140.96 | 114.82 | 98.42 | 102.25 | 103.34 | 75.79 | 63.15 |
| Days of sales outstanding (DSO) | days | 7.08 | 9.18 | 13.98 | — | 12.09 | 11.88 | 12.50 | 12.11 | 11.75 | 12.21 |
| Number of days of payables | days | 18.42 | 16.82 | 42.41 | 40.03 | 31.35 | 42.58 | 61.95 | 48.19 | 30.84 | 32.07 |
Leslies Inc's activity ratios provide insights into the efficiency of its operations and management of working capital.
1. Days of inventory on hand (DOH) measures how many days, on average, the company's inventory is held before being sold. The trend for Leslies Inc shows fluctuations in inventory management efficiency over the past few quarters, with a significant increase in DOH from September 2021 to June 2023. This indicates a long-standing inventory turnover cycle, potentially tying up capital and increasing storage costs.
2. Days of sales outstanding (DSO) calculates the average number of days it takes for the company to collect payment after a sale is made. Leslies Inc has shown relatively stable DSO figures over the quarters reviewed, indicating consistent customer payment behavior. However, the slight increase in DSO from September 2021 to December 2023 suggests a longer collection period, which may impact cash flow and liquidity.
3. Number of days of payables measures how many days, on average, it takes for the company to pay its suppliers. Leslies Inc's payables period has fluctuated throughout the quarters, with a notable increase from September 2021 to June 2022, followed by a decrease in subsequent quarters. This may suggest variations in the company's payment terms negotiation with suppliers or changes in inventory purchasing patterns.
In summary, Leslies Inc should closely monitor its activity ratios to ensure efficient management of inventory levels, timely collection of receivables, and optimization of payables cycles to enhance working capital efficiency and overall financial performance.
Long-term
| Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | |
|---|---|---|---|---|---|---|---|---|---|---|
| Fixed asset turnover | 14.91 | 15.54 | 17.02 | 18.95 | 20.46 | 19.62 | 20.48 | 19.70 | 20.51 | 18.47 |
| Total asset turnover | 1.38 | 1.36 | 1.28 | 1.31 | 1.43 | 1.38 | 1.31 | 1.49 | 1.67 | 1.25 |
Leslies Inc's long-term activity ratios provide insight into the company's efficiency in utilizing its assets to generate sales. The fixed asset turnover ratio has shown a decreasing trend over the recent quarters, indicating that the company may be less efficient in generating revenue from its fixed assets. However, the ratio remains relatively high, suggesting that Leslies Inc is still able to generate substantial sales relative to its investment in fixed assets.
Conversely, the total asset turnover ratio has fluctuated over the quarters but generally remains at a moderate level. This ratio indicates the company's overall efficiency in generating sales from all its assets, including both fixed and current assets. The fluctuations may be due to changes in the company's asset base or sales volume.
In conclusion, while Leslies Inc's fixed asset turnover ratio has been declining, indicating potential inefficiencies in utilizing fixed assets, the total asset turnover ratio suggests that the company is moderately efficient in generating sales from all its assets. It is important for the company to closely monitor these ratios to ensure optimal asset utilization and sustainable long-term growth.