Ralph Lauren Corp Class A (RL)
Activity ratios
Short-term
Turnover ratios
| Mar 31, 2024 | Mar 31, 2023 | Mar 31, 2022 | Mar 31, 2021 | Mar 31, 2020 | |
|---|---|---|---|---|---|
| Inventory turnover | 2.44 | 2.13 | 2.12 | 2.03 | 3.40 |
| Receivables turnover | 14.00 | 13.47 | 13.92 | 9.16 | 20.26 |
| Payables turnover | 6.62 | 6.13 | 4.62 | 4.33 | 10.16 |
| Working capital turnover | 3.50 | 3.52 | 3.17 | 1.68 | 4.80 |
Ralph Lauren Corp Class A's inventory turnover ratio indicates the number of times the company's inventory is sold and replaced during the year. Over the past five years, the trend shows a fluctuating pattern, with a decline in the most recent year compared to the previous years. The ratio decreased from 3.40 in 2020 to 2.44 in 2024, suggesting that the company may be managing its inventory less efficiently in the current year.
The receivables turnover ratio measures how effectively the company is collecting its accounts receivable. Ralph Lauren Corp Class A has shown stable performance in this area, with a consistent upward trend in receivables turnover over the past five years. The ratio increased from 9.16 in 2021 to 14.00 in 2024, reflecting an improvement in the company's collection efficiency.
The payables turnover ratio evaluates how quickly the company pays its suppliers. Ralph Lauren Corp Class A has demonstrated a fluctuating trend in payables turnover over the five-year period. The ratio increased from 4.33 in 2021 to 6.62 in 2024, indicating that the company is now paying its suppliers more frequently compared to the previous years.
The working capital turnover ratio measures how effectively the company is utilizing its working capital to generate sales. Ralph Lauren Corp Class A has shown variability in this ratio over the past five years, with the highest ratio of 4.80 in 2020 and a slight decline to 3.50 in 2024. This suggests that the company's efficiency in generating sales from its working capital has decreased in the most recent year.
Overall, based on the activity ratios analysis, Ralph Lauren Corp Class A has shown mixed performance in managing its inventory, collecting receivables, paying suppliers, and utilizing working capital efficiently over the five-year period under review.
Average number of days
| Mar 31, 2024 | Mar 31, 2023 | Mar 31, 2022 | Mar 31, 2021 | Mar 31, 2020 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 149.71 | 171.67 | 172.24 | 179.96 | 107.21 |
| Days of sales outstanding (DSO) | days | 26.07 | 27.10 | 26.23 | 39.84 | 18.02 |
| Number of days of payables | days | 55.13 | 59.55 | 79.08 | 84.39 | 35.94 |
Days of inventory on hand (DOH) for Ralph Lauren Corp Class A have decreased from 171.67 days in 2023 to 149.71 days in 2024, indicating a more efficient management of inventory. This trend suggests that the company is turning over its inventory faster, which can lead to cost savings and improved cash flow.
Days of sales outstanding (DSO) have also decreased from 27.10 days in 2023 to 26.07 days in 2024. A lower DSO indicates that Ralph Lauren Corp is collecting receivables more quickly, which is a positive sign for the company's liquidity and financial health.
The number of days of payables has decreased significantly from 59.55 days in 2023 to 55.13 days in 2024. A lower number of days of payables indicates that the company is taking less time to pay off its suppliers, which could potentially strain its liquidity position if not managed properly.
Overall, the improving efficiency in inventory management and collection of receivables is a positive indicator for Ralph Lauren Corp Class A. However, the significant reduction in the number of days of payables should be monitored closely to ensure that it does not impact the company's ability to manage its cash flow effectively and maintain good relationships with suppliers.
Long-term
| Mar 31, 2024 | Mar 31, 2023 | Mar 31, 2022 | Mar 31, 2021 | Mar 31, 2020 | |
|---|---|---|---|---|---|
| Fixed asset turnover | 7.80 | 6.74 | 6.41 | 4.34 | 6.29 |
| Total asset turnover | 1.00 | 0.95 | 0.81 | 0.56 | 0.85 |
The fixed asset turnover ratio for Ralph Lauren Corp Class A has shown an improving trend over the past five years, indicating that the company is generating more sales revenue from its fixed assets. This suggests that the company is effectively utilizing its fixed assets to generate revenue.
On the other hand, the total asset turnover ratio has also shown improvement, albeit to a lesser extent compared to the fixed asset turnover ratio. This indicates that Ralph Lauren Corp Class A is becoming more efficient in generating revenue from its total assets, including both fixed and current assets.
Overall, the increasing trends in both fixed asset turnover and total asset turnover ratios suggest that Ralph Lauren Corp Class A is effectively managing its assets to drive sales growth and improve overall operational efficiency. This could potentially lead to enhanced profitability and long-term sustainability for the company.