RH (RH)
Activity ratios
Short-term
Turnover ratios
| Jan 31, 2025 | Feb 3, 2024 | Jan 31, 2024 | Jan 31, 2023 | Jan 28, 2023 | |
|---|---|---|---|---|---|
| Inventory turnover | 1.73 | 3.95 | 2.17 | 2.22 | 3.94 |
| Receivables turnover | — | 35.97 | — | — | 44.27 |
| Payables turnover | — | 14.55 | — | — | 18.09 |
| Working capital turnover | 8.24 | 12.38 | 13.23 | 2.21 | 2.18 |
Based on the provided data, let's analyze RH's activity ratios:
1. Inventory Turnover:
- Inventory turnover measures how efficiently a company manages its inventory. A higher turnover ratio indicates that inventory is selling quickly.
- RH's inventory turnover has fluctuated over the years, ranging from 1.73 to 3.95.
- In January 31, 2024, RH's inventory turnover was at its lowest at 2.17, indicating that the company took longer to sell its inventory compared to other periods.
- However, by February 3, 2024, the inventory turnover improved significantly to 3.95, showing a more efficient management of inventory.
2. Receivables Turnover:
- Receivables turnover reflects how efficiently a company collects outstanding receivables from customers.
- RH's receivables turnover ranged from 35.97 to 44.27, with some periods marked as "—", indicating missing data.
- A higher turnover ratio implies quicker collection of receivables, which indicates better liquidity and credit management practices.
- RH seems to have a good track record of collecting receivables efficiently, based on the available data.
3. Payables Turnover:
- Payables turnover measures how quickly a company pays its suppliers.
- RH's payables turnover data has missing values for some periods.
- It would be important to analyze payables turnover consistently over time to evaluate RH's payment policies and relationships with suppliers.
4. Working Capital Turnover:
- Working capital turnover ratio shows how efficiently a company utilizes its working capital to generate sales.
- RH's working capital turnover ranged from 2.18 to 13.23, indicating varying levels of efficiency in capital utilization.
- A higher turnover ratio suggests that RH is effectively using its working capital to drive sales.
In conclusion, based on the data provided, RH has shown fluctuations in its activity ratios over time, which indicates changes in its operational efficiency and management of working capital, inventory, receivables, and payables. It is important to monitor these ratios consistently to assess the company's performance and financial health.
Average number of days
| Jan 31, 2025 | Feb 3, 2024 | Jan 31, 2024 | Jan 31, 2023 | Jan 28, 2023 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 210.75 | 92.38 | 167.83 | 164.56 | 92.55 |
| Days of sales outstanding (DSO) | days | — | 10.15 | — | — | 8.25 |
| Number of days of payables | days | — | 25.09 | — | — | 20.18 |
RH's Days of Inventory on Hand (DOH) has shown fluctuations over the years, ranging from 92.55 days to 210.75 days. The trend indicates that RH held inventory for an average of approximately 150 days, which is relatively high and suggests that RH may be carrying excess inventory levels in certain periods.
In terms of Days of Sales Outstanding (DSO), RH has reported varying figures, with some periods not providing data. The available data shows that the DSO was as low as 8.25 days and as high as 10.15 days. A decreasing trend would be preferable as it indicates faster collection of receivables, improving cash flows.
Regarding the number of days of payables, the information for RH is only available for some periods. The reported figures range from 20.18 days to 25.09 days, suggesting that RH, on average, takes between 20 to 25 days to pay its suppliers. This indicates a generally healthy payment process and relationship with suppliers.
Overall, analyzing these activity ratios can provide insights into how efficiently RH manages its inventory, collects receivables, and pays its suppliers. It is essential for RH to monitor these ratios regularly to optimize its working capital management and improve overall operational efficiency.
See also:
Long-term
| Jan 31, 2025 | Feb 3, 2024 | Jan 31, 2024 | Jan 31, 2023 | Jan 28, 2023 | |
|---|---|---|---|---|---|
| Fixed asset turnover | — | 1.68 | — | — | 2.16 |
| Total asset turnover | 0.70 | 0.68 | 0.73 | 0.68 | 0.67 |
An analysis of RH's long-term activity ratios reveals the following trends:
1. Fixed Asset Turnover:
- In January 2023, the fixed asset turnover ratio was 2.16, indicating that RH generated $2.16 in sales for each dollar of fixed assets.
- There is missing data for the fixed asset turnover ratio for January 31, 2023 and January 31, 2024.
- By February 3, 2024, the fixed asset turnover ratio decreased to 1.68, suggesting a decline in efficiency in utilizing fixed assets to generate sales.
- In January 31, 2025, there is again missing data for the fixed asset turnover ratio.
2. Total Asset Turnover:
- The total asset turnover ratio for RH was 0.67 in January 28, 2023, indicating that the company generated $0.67 in sales for each dollar of total assets.
- The total asset turnover ratio improved slightly to 0.68 by January 31, 2023, and then increased further to 0.73 by January 31, 2024, signaling an enhanced efficiency in utilizing total assets to generate sales.
- The ratio remained consistent at 0.68 by February 3, 2024, and then slightly decreased to 0.70 by January 31, 2025.
In general, the fixed asset turnover ratio fluctuated over the period, with a notable decline by February 3, 2024, while the total asset turnover ratio exhibited more stability and an overall improvement from January 28, 2023, to January 31, 2024, before a slight dip by the end of the period analyzed.