Leslies Inc (LESL)

Short-term

Turnover ratios

Leslies Inc's inventory turnover ratio has shown fluctuations over the past several quarters, ranging from 2.79 to 5.51. This ratio indicates that the company is effectively managing its inventory levels by selling and replacing its inventory multiple times during the year.

The receivables turnover ratio has also varied over the same period, with values between 23.18 and 50.94, suggesting that Leslies Inc is efficient in collecting payments from its customers. A higher turnover ratio indicates that the company is able to convert its receivables into cash quickly.

On the other hand, the payables turnover ratio has also fluctuated, ranging from 5.89 to 23.37. A lower turnover ratio may indicate that the company is taking longer to pay its suppliers, causing potential liquidity concerns.

The working capital turnover ratio has displayed significant variance, indicating changes in how efficiently Leslies Inc is utilizing its working capital to generate revenue. Higher turnover ratios signify that the company is effectively utilizing its resources to generate sales.

In summary, Leslies Inc's activity ratios show fluctuating trends, and it would be beneficial for the company to focus on maintaining consistency in managing inventory, collecting receivables promptly, and optimizing its payables cycle to enhance overall operational efficiency and financial performance.

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Average number of days

Leslies Inc's activity ratios indicate how efficiently the company is managing its operations.

1. Days of Inventory on Hand (DOH):
- The days of inventory on hand have shown fluctuation over the periods, ranging from a low of 63.15 days to a high of 130.93 days.
- A decrease in DOH indicates efficient inventory management, allowing the company to quickly turn over its inventory.
- Leslies Inc should aim to lower its DOH to improve liquidity and reduce carrying costs associated with holding excess inventory.

2. Days of Sales Outstanding (DSO):
- DSO has varied between 7.17 days to 15.75 days, with lower values indicating that the company collects receivables quicker.
- A decreasing trend in DSO suggests effective credit management and timely collection of revenues.
- Leslies Inc should continue efforts to reduce DSO to enhance cash flow and minimize the risk of bad debts.

3. Number of Days of Payables:
- The number of days of payables ranges from 15.62 days to 61.95 days, reflecting the time it takes for the company to pay its suppliers.
- A longer payment period can indicate favorable terms with suppliers but may also signal liquidity issues or strained relationships.
- Leslies Inc should strike a balance in managing payables to optimize cash flow while maintaining positive vendor relationships.

In conclusion, Leslies Inc should focus on optimizing inventory levels, accelerating collection of receivables, and managing payables effectively to enhance operational efficiency and financial performance.

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Long-term

Leslies Inc's fixed asset turnover ratio has shown a declining trend over the past few quarters, indicating that the company is generating fewer sales in relation to its investment in fixed assets. This may suggest that the company's efficiency in utilizing its fixed assets to generate revenue has been decreasing.

On the other hand, Leslies Inc's total asset turnover ratio has fluctuated over the periods but has generally remained relatively stable. This ratio measures the company's ability to generate sales in relation to its total assets. A ratio above 1 indicates that the company is generating more sales per dollar of assets, which is generally favorable.

Overall, while the fixed asset turnover ratio for Leslies Inc has been on a declining trend, the total asset turnover ratio has shown some stability. It is important for the company to monitor and possibly improve its efficiency in utilizing fixed assets to boost overall asset turnover and profitability in the long term.