PVH Corp (PVH)

Short-term

Turnover ratios

The activity ratios of PVH Corp can provide valuable insights into the efficiency of the company's operations and management of its working capital.

1. Inventory turnover:
- The inventory turnover ratio measures how efficiently the company is managing its inventory.
- PVH Corp's inventory turnover has fluctuated over the past five years, with the highest being in 2022 (2.84) and the lowest in 2023 (2.16).
- A higher inventory turnover ratio indicates that the company is selling its inventory quickly, which can minimize the risk of obsolete inventory and improve cash flow.

2. Receivables turnover:
- The receivables turnover ratio indicates how quickly the company is collecting payment from its customers.
- PVH Corp's receivables turnover has shown a generally increasing trend over the years, with the highest turnover in 2020 (13.37) and the lowest in 2023 (9.77).
- A higher receivables turnover ratio suggests that the company is efficiently managing its accounts receivable, which can enhance liquidity and reduce the risk of bad debts.

3. Payables turnover:
- The payables turnover ratio reflects how quickly the company is paying its suppliers.
- PVH Corp's payables turnover has varied over the five-year period, with the highest in 2020 (5.12) and the lowest in 2022 (2.94).
- A higher payables turnover ratio implies that the company is paying its suppliers promptly, which can build stronger supplier relationships and potentially negotiate better terms.

4. Working capital turnover:
- The working capital turnover ratio measures how efficiently the company is utilizing its working capital to generate sales.
- PVH Corp's working capital turnover has shown an increasing trend over the years, with the highest turnover in 2024 (18.88) and the lowest in 2021 (5.24).
- A higher working capital turnover ratio indicates that the company is effectively using its resources to generate sales, which can improve profitability and operational efficiency.

Overall, analyzing these activity ratios can help investors and stakeholders evaluate PVH Corp's operational efficiency, financial health, and management of working capital.

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Average number of days

The Days of Inventory on Hand (DOH) for PVH Corp decreased from 168.65 days in 2023 to 134.44 days in 2024, indicating that the company is managing its inventory more efficiently. A lower DOH suggests that the company is turning over its inventory more quickly, which can lead to lower carrying costs and potentially higher profitability.

The Days of Sales Outstanding (DSO) decreased from 37.36 days in 2023 to 31.41 days in 2024, showing that PVH Corp is collecting its accounts receivable more rapidly. A lower DSO implies that the company is better at converting its sales into cash, which can improve its liquidity and reduce the risk of bad debts.

The Number of Days of Payables for PVH Corp increased from 124.19 days in 2023 to 101.65 days in 2024, suggesting that the company is taking longer to pay its suppliers. A longer payables period can provide a temporary source of financing and help improve cash flow, but it can also strain relationships with suppliers if not managed carefully.

Overall, the trends in these activity ratios indicate that PVH Corp has been improving its inventory management, accounts receivable collection, and payables terms, which can positively impact its working capital efficiency and financial performance.

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Long-term

PVH Corp's long-term activity ratios, specifically the fixed asset turnover and total asset turnover, reflect the efficiency of the company in generating sales relative to its assets.

The fixed asset turnover ratio has shown a generally increasing trend over the past five years, indicating that the company is becoming more efficient in utilizing its fixed assets to generate revenue. This suggests that PVH Corp has been able to improve its productivity and utilization of its property, plant, and equipment over time.

On the other hand, the total asset turnover ratio has also shown an increasing trend, albeit with some fluctuations. This indicates that PVH Corp has been improving its overall efficiency in generating sales revenue relative to its total assets. A higher total asset turnover ratio suggests that the company is effectively using its assets to generate sales.

Overall, the increasing trends in both the fixed asset turnover and total asset turnover ratios indicate that PVH Corp has been effectively managing and utilizing its assets to drive sales growth and improve operational efficiency over the past five years. This reflects positively on the company's ability to generate revenue from its asset base.