Ollie's Bargain Outlet Hldg (OLLI)

Short-term

Turnover ratios

Inventory Turnover:
The inventory turnover ratio measures how efficiently Ollie's Bargain Outlet is managing its inventory. The ratio indicates how many times the company's inventory is sold and replaced over a specific period. The trend in Ollie's inventory turnover shows a relatively stable performance, ranging from 3.31 to 4.33 over the past five years. This suggests that the company is effectively managing its inventory levels.

Receivables Turnover:
The receivables turnover ratio reflects how efficiently Ollie's collects its accounts receivable. A high turnover ratio indicates that the company is collecting its receivables quickly. Ollie's Bargain Outlet has shown a fluctuating trend in receivables turnover, with the ratio ranging from 495.77 to 2,912.35 over the past five years. The substantial fluctuations may suggest variations in the company's credit policies or customer payment behaviors.

Payables Turnover:
The payables turnover ratio evaluates how quickly Ollie's pays its suppliers. A higher turnover ratio implies that the company is paying its suppliers more rapidly. Ollie's payables turnover has varied over the years, ranging from 13.06 to 19.56. A decreasing trend in the payables turnover ratio may indicate a lengthening of the company's payment period to suppliers.

Working Capital Turnover:
The working capital turnover ratio measures how efficiently Ollie's is using its working capital to generate sales revenue. A higher turnover ratio implies more efficient utilization of working capital. Ollie's working capital turnover has fluctuated between 3.45 and 5.50 over the past five years. A downward trend in the working capital turnover ratio may suggest a decrease in sales generated by the working capital employed.

In conclusion, Ollie's Bargain Outlet shows varying trends in its activity ratios over the past five years, indicating fluctuations in inventory management, accounts receivable collection, payables management, and working capital efficiency. Further analysis and correlation with other financial metrics are necessary to assess the overall financial health and operational efficiency of the company accurately.

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Average number of days

Based on the activity ratios for Ollie's Bargain Outlet Hldg over the past five years, we can observe the following trends:

1. Days of Inventory on Hand (DOH):
- The company has shown fluctuations in its inventory turnover efficiency, with the number of days of inventory on hand ranging from 84.31 days in 2021 to 110.16 days in 2022.
- The upward trend in DOH from 2021 to 2022 suggests that Ollie's Bargain Outlet Hldg may have experienced challenges in managing its inventory levels efficiently during that period.

2. Days of Sales Outstanding (DSO):
- Ollie's Bargain Outlet Hldg has maintained a relatively low level of days of sales outstanding over the years, indicating a quick collection of accounts receivable.
- The increase in DSO from 0.13 days in 2021 to 0.74 days in 2020 might suggest a slight delay in collecting payments from customers during the specific year.

3. Number of Days of Payables:
- The company's days of payables have varied over the years, with the number of days of payables ranging from 18.66 days in 2020 to 27.94 days in 2021.
- The increase in the number of days of payables in 2021 could indicate that Ollie's Bargain Outlet Hldg took longer to settle its payables during that year.

Overall, the analysis of the activity ratios indicates that Ollie's Bargain Outlet Hldg has experienced fluctuations in its inventory management, accounts receivable collection, and accounts payable practices over the past five years. These trends suggest the need for the company to closely monitor and optimize its working capital management strategies to improve overall operational efficiency and cash flow management.

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Long-term

Ollie's Bargain Outlet Hldg has shown a consistent trend of efficiently utilizing its fixed assets to generate revenue over the past five years, as indicated by the increasing values of the fixed asset turnover ratio from 10.66 in February 2020 to 11.91 in January 2022. This suggests that the company has been able to generate $11.91 in sales for every dollar invested in fixed assets in January 2022. However, there was a slight decrease in this ratio to 7.79 in February 2024, indicating a potential decline in efficiency in utilizing fixed assets to generate sales.

In terms of total asset turnover, Ollie's Bargain Outlet Hldg has generally maintained a relatively stable performance over the same period, with the ratio fluctuating around 0.89 to 0.92. This indicates that the company has been generating approximately $0.89 to $0.92 in sales for every dollar invested in total assets.

Overall, the company's ability to efficiently generate revenue from both its fixed assets and total assets is essential for maximizing profitability and shareholder value. Management should continue to monitor these ratios to ensure effective utilization of assets going forward.