Planet Fitness Inc (PLNT)

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	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019
Inventory turnover	40.63	27.38	29.34	34.87	33.65	72.96	94.33	156.28	223.66	49.12	158.34	383.57	408.82	58.14	48.92	64.47	221.72	75.65	74.92	49.53
Receivables turnover	17.52	19.43	15.72	29.71	12.78	14.15	14.12	16.06	11.48	18.75	13.27	13.09	8.95	9.51	12.92	20.05	12.39	16.37	15.22	19.92
Payables turnover	7.99	7.27	6.83	10.27	8.61	13.87	12.85	11.29	9.26	9.28	10.46	12.33	9.97	5.31	11.86	4.83	9.14	8.58	11.57	7.40
Working capital turnover	4.47	3.69	4.13	2.63	2.74	2.68	2.57	2.01	1.05	1.02	0.96	0.75	0.76	0.92	1.06	1.29	1.65	3.71	2.01	2.02

Activity ratios provide insights into how efficiently a company is managing its assets and liabilities to generate sales and revenue. Here is a detailed analysis of Planet Fitness Inc's activity ratios:

1. Inventory Turnover:
- Planet Fitness Inc's inventory turnover has been relatively high and consistent over the past eight quarters, ranging from 27.38 to 42.57.
- The increasing trend in inventory turnover indicates that the company is efficiently managing its inventory levels and quickly turning over its stock into sales.

2. Receivables Turnover:
- The receivables turnover ratio fluctuates significantly, ranging from 14.05 to 32.40, showing variability in the company's collection efficiency.
- A higher turnover ratio implies that Planet Fitness is collecting receivables more quickly, which is positive for cash flow management.

3. Payables Turnover:
- The payables turnover ratio ranges from 4.78 to 10.27, indicating variations in how quickly the company pays its suppliers.
- A higher payables turnover ratio suggests that Planet Fitness is paying its suppliers more frequently, potentially maintaining good relationships and managing its cash flow effectively.

4. Working Capital Turnover:
- The working capital turnover ratio ranges from 2.29 to 4.86, reflecting the efficiency with which Planet Fitness utilizes its working capital to generate sales.
- Higher working capital turnover indicates that the company is effectively utilizing its current assets to support its operations and drive revenue growth.

Overall, the analysis of Planet Fitness Inc's activity ratios suggests that the company is efficiently managing its inventory, receivables, payables, and working capital to support its business operations. The consistent improvement in inventory turnover and moderate fluctuations in receivables turnover indicate sound operational efficiency and effective working capital management.

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	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019
Days of inventory on hand (DOH)	days	8.98	13.33	12.44	10.47	10.85	5.00	3.87	2.34	1.63	7.43	2.31	0.95	0.89	6.28	7.46	5.66	1.65	4.82	4.87	7.37
Days of sales outstanding (DSO)	days	20.83	18.79	23.22	12.28	28.55	25.79	25.84	22.73	31.79	19.46	27.51	27.89	40.78	38.37	28.25	18.20	29.47	22.30	23.98	18.32
Number of days of payables	days	45.69	50.18	53.47	35.54	42.39	26.31	28.40	32.32	39.41	39.35	34.90	29.61	36.60	68.77	30.78	75.57	39.92	42.55	31.55	49.33

To analyze Planet Fitness Inc's activity ratios, we can look at Days of Inventory on Hand (DOH), Days of Sales Outstanding (DSO), and Number of Days of Payables.

1. Days of Inventory on Hand (DOH): This ratio measures how many days a company takes to sell its inventory. A lower DOH indicates efficient inventory management. Over the past few quarters, Planet Fitness Inc has shown fluctuating DOH values, ranging from 5.52 days to 13.33 days. The increase in Q3 2023 and Q2 2023 compared to the previous quarters may suggest slower inventory turnover, which could lead to excess inventory.

2. Days of Sales Outstanding (DSO): DSO reflects how long it takes for a company to collect its accounts receivable. A lower DSO is favorable as it indicates quicker collection of sales. Planet Fitness Inc's DSO values have also varied, ranging from 11.27 days to 25.98 days. The decrease in DSO in Q1 2023 suggests an improvement in the efficiency of collecting accounts receivable.

3. Number of Days of Payables: This ratio represents how long a company takes to pay its suppliers. A higher number of days indicates a longer period to pay off payables. Planet Fitness Inc's days of payables values have fluctuated between 35.54 days and 76.40 days. The decrease in Q1 2022 to 35.54 days compared to the previous quarters may indicate a more aggressive payment strategy or improved vendor terms.

Overall, Planet Fitness Inc should focus on managing its inventory efficiently to maintain optimal working capital levels, improving collections on accounts receivable, and potentially negotiating favorable payment terms with suppliers to support its cash flow and operational efficiency.

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	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019
Fixed asset turnover	2.53	1.49	1.54	1.50	1.48	1.41	1.27	1.16	1.57	1.58	1.49	2.04	2.15	2.54	3.16	4.29	4.46	4.81	5.06	4.99
Total asset turnover	0.33	0.33	0.33	0.31	0.30	0.27	0.23	0.19	0.25	0.25	0.23	0.18	0.19	0.22	0.26	0.33	0.38	0.45	0.39	0.38

Long-term activity ratios provide insight into how effectively a company is utilizing its assets to generate sales.

Fixed asset turnover measures the company's ability to generate sales from its fixed assets. Planet Fitness Inc's fixed asset turnover has been consistently increasing over the past eight quarters, ranging from 1.99 to 2.98. This indicates that the company has been able to generate more sales relative to its investment in fixed assets, reflecting efficient utilization of these assets.

Total asset turnover, on the other hand, measures the company's ability to generate sales from all its assets. Planet Fitness Inc's total asset turnover has also shown a positive trend, consistently improving from 0.22 to 0.36 over the same period. This suggests that the company has been efficient in utilizing all its assets to generate sales.

Overall, the increasing trend in both fixed asset turnover and total asset turnover ratios for Planet Fitness Inc signifies effective asset management and operational efficiency, indicating that the company is generating more revenue per dollar invested in assets.