Lululemon Athletica Inc. (LULU)

Activity ratios

Short-term

Turnover ratios

	Jan 31, 2025	Jan 31, 2024	Jan 28, 2024	Jan 31, 2023	Jan 29, 2023
Inventory turnover	2.99	3.03	5.60	2.50	4.69
Receivables turnover	—	—	76.84	—	61.32
Payables turnover	—	—	21.27	—	39.32
Working capital turnover	6.98	3.96	3.95	4.86	4.89

Based on the activity ratios of Lululemon Athletica Inc. provided in the data, we can observe the following trends:

1. Inventory Turnover:
- The inventory turnover ratio has fluctuated over the years, ranging from as low as 2.50 to as high as 5.60. The higher the ratio, the better, as it indicates that the company is selling its inventory efficiently.
- The ratio was highest on January 28, 2024, suggesting that Lululemon managed its inventory effectively during that period.

2. Receivables Turnover:
- The receivables turnover data is missing for most of the years, except for January 29, 2023, and January 28, 2024. This could indicate that Lululemon's credit sales practices are not significant, or the data might be incomplete.
- The turnover ratios provided, 61.32 and 76.84, imply that Lululemon collects its receivables efficiently, as higher ratios are preferable.

3. Payables Turnover:
- Similar to receivables turnover, data for payables turnover is missing for most years except for January 29, 2023, and January 28, 2024. The ratios provided, 39.32 and 21.27, imply the number of times Lululemon pays its suppliers in a given period.
- A higher payables turnover ratio indicates that the company is paying its suppliers more frequently, which could have cash flow implications.

4. Working Capital Turnover:
- The working capital turnover ratio has varied over the years, with values ranging from 3.95 to 6.98. This ratio measures how effectively the company is generating revenue from its working capital.
- A higher ratio suggests that Lululemon is efficiently using its working capital to generate sales, which is a positive indicator of operational efficiency.

In conclusion, while the data provides insights into Lululemon Athletica Inc.'s activity ratios, the missing data points for receivables and payables turnover ratios limit a comprehensive analysis. However, the trends observed in inventory turnover and working capital turnover indicate the company's efficiency in managing inventory and utilizing working capital to drive sales.

Average number of days

		Jan 31, 2025	Jan 31, 2024	Jan 28, 2024	Jan 31, 2023	Jan 29, 2023
Days of inventory on hand (DOH)	days	121.92	120.48	65.18	146.01	77.78
Days of sales outstanding (DSO)	days	—	—	4.75	—	5.95
Number of days of payables	days	—	—	17.16	—	9.28

Lululemon Athletica Inc.'s activity ratios reflect the efficiency of the company in managing its working capital.

1. Days of Inventory on Hand (DOH):
- In January 2023, Lululemon held inventory for an average of 77.78 days, indicating a moderate turnover rate.
- By January 2025, this metric decreased to 121.92 days, suggesting an increase in the efficiency of inventory management.

2. Days of Sales Outstanding (DSO):
- In January 2023, Lululemon collected receivables within an average of 5.95 days, showing prompt collection of sales.
- There is missing data for DSO in subsequent years, making it challenging to assess the trend in accounts receivable turnover.

3. Number of Days of Payables:
- In January 2023, Lululemon took approximately 9.28 days to settle its payables, implying a relatively quick payment cycle to suppliers.
- The data for subsequent years is not available, making it difficult to evaluate the trend in payments to suppliers over time.

Overall, examining these activity ratios provides insights into Lululemon's effectiveness in managing inventory, collecting receivables, and paying its suppliers in a timely manner. Further information on the company's credit policies and inventory management strategies would be beneficial for a more comprehensive analysis.

Long-term

	Jan 31, 2025	Jan 31, 2024	Jan 28, 2024	Jan 31, 2023	Jan 29, 2023
Fixed asset turnover	—	—	6.20	6.39	6.42
Total asset turnover	1.53	1.36	1.35	1.45	1.45

Lululemon Athletica Inc.'s long-term activity ratios suggest efficient utilization of its fixed and total assets.

The Fixed asset turnover ratio, which measures how effectively the company generates sales from its fixed assets, has shown a slight decline over the years. It decreased from 6.42 in January 2023 to 6.20 in January 2024. This decline may indicate a slightly less efficient use of fixed assets in generating sales.

On the other hand, the Total asset turnover ratio, which indicates the company's ability to generate sales from its total assets, has shown improvement. It increased from 1.45 in January 2023 to 1.53 in January 2025, reflecting an increase in the efficiency of utilizing all assets to generate revenues.

Overall, the decline in the fixed asset turnover ratio should be monitored to ensure that the company continues to effectively manage its fixed assets to drive revenue growth. However, the improvement in the total asset turnover ratio indicates positive momentum in generating sales from all assets, which is a good sign for the company's operational efficiency.