RH (RH)

Short-term

Turnover ratios

Inventory Turnover:
- The inventory turnover ratio measures how efficiently a company is managing its inventory. RH's inventory turnover has fluctuated over the years, ranging from a low of 1.73 to a high of 3.53. A higher inventory turnover indicates that RH is selling its inventory more quickly, which is generally favorable. It is important to note that a declining trend in inventory turnover may suggest excess inventory or slow sales.

Receivables Turnover:
- Receivables turnover ratio evaluates how efficiently RH is collecting payments from its customers. RH's receivables turnover has varied significantly, with some periods showing no data. Higher receivables turnover values indicate that RH is collecting payments more quickly. The lack of data for certain periods may indicate variations in payment collection practices or reporting.

Payables Turnover:
- The payables turnover ratio assesses how quickly RH is paying its suppliers. RH's payables turnover ratios are available for some periods only, showing values between 10.22 and 16.21. A higher payables turnover suggests RH is paying off its suppliers at a faster rate. The absence of data for certain periods may imply changes in payment terms with suppliers.

Working Capital Turnover:
- The working capital turnover ratio reflects how efficiently RH is utilizing its working capital to generate revenue. The working capital turnover ratios for RH have varied significantly, with values ranging from 1.60 to 19.81. Higher ratios indicate that RH is generating more revenue per unit of working capital, which is generally positive. The substantial fluctuations in this ratio may suggest changes in operating efficiency or business structure over time.

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Average number of days

Based on the provided data, we can analyze RH's activity ratios as follows:

1. Days of Inventory on Hand (DOH):
- The DOH for RH fluctuated over the periods examined, ranging from a low of 103.30 days to a high of 210.75 days.
- A higher DOH indicates that RH is holding inventory for a longer period before selling it, which may tie up funds and increase carrying costs.
- RH faced challenges in managing its inventory efficiently, with some periods showing significant increases in the DOH metric.

2. Days of Sales Outstanding (DSO):
- The DSO for RH varied throughout the periods provided, with some months missing data.
- DSO measures how long it takes for a company to collect revenue after a sale is made.
- A lower DSO is generally favorable as it signifies faster collection of cash from customers, but the incomplete data limits a comprehensive analysis of RH's collection efficiency.

3. Number of Days of Payables:
- The number of days of payables for RH showed fluctuations over time, from a low of 22.52 days to a high of 30.95 days.
- This metric reflects how long a company takes to pay its suppliers for goods or services received.
- A higher number of days of payables could indicate that RH is taking longer to settle its debts, potentially affecting relationships with suppliers.

Overall, these activity ratios provide insights into RH's inventory management, collection efficiency, and payment practices. Further analysis considering industry benchmarks and trends would provide a more comprehensive understanding of RH's operational efficiency.

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See also:

RH Short-term (Operating) Activity Ratios (Quarterly Data)

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Long-term

The fixed asset turnover ratio measures how efficiently a company is utilizing its fixed assets to generate revenue. Looking at the data provided for RH, we can see that the fixed asset turnover ratio has fluctuated over the years. It started at 3.13 in January 2022, dropped to 1.70 in February 2024, and remained at that level as of January 31, 2025. This indicates a decline in the company's ability to generate revenue from its fixed assets over time.

On the other hand, the total asset turnover ratio reflects how efficiently a company is utilizing all its assets to generate sales. RH's total asset turnover ratio has also shown fluctuations, with values ranging from 0.60 to 0.72 during the period. The ratio was highest at 0.72 on January 31, 2024, indicating that the company was generating $0.72 in sales for every dollar of assets it owned.

Overall, the trend in both the fixed asset turnover and total asset turnover ratios suggests that RH may have faced challenges in efficiently utilizing its assets to generate revenue during the period under review. Further analysis and comparison with industry peers would provide additional insights into the company's long-term activity performance.

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See also:

RH Long-term (Investment) Activity Ratios (Quarterly Data)