Ross Stores Inc (ROST)
Activity ratios
Short-term
Turnover ratios
| Jan 31, 2025 | Feb 3, 2024 | Jan 31, 2024 | Jan 31, 2023 | Jan 28, 2023 | |
|---|---|---|---|---|---|
| Inventory turnover | 6.24 | 8.24 | 6.75 | 6.89 | 8.26 |
| Receivables turnover | — | 157.08 | — | — | 128.30 |
| Payables turnover | — | 9.24 | — | — | 8.31 |
| Working capital turnover | 7.34 | 6.39 | 6.34 | 5.72 | 5.72 |
Ross Stores Inc's activity ratios provide insights into how efficiently the company manages its assets and liabilities to generate sales.
1. Inventory Turnover: This ratio indicates how many times during a period inventory was sold and replaced. Ross Stores Inc's inventory turnover has varied over the years, ranging from 6.24 to 8.26. A higher turnover generally indicates efficient management of inventory.
2. Receivables Turnover: This ratio reveals how many times receivables are collected and replaced during a period. Ross Stores Inc's data is incomplete, with values provided for only a few years. A higher turnover is preferable as it signifies quick collection of receivables.
3. Payables Turnover: This ratio reflects how many times payables are paid off and replaced in a period. Similar to receivables turnover, Ross Stores Inc has missing data for most years. A higher turnover typically indicates favorable payment terms with suppliers.
4. Working Capital Turnover: This ratio shows how efficiently working capital is being utilized to generate sales. Ross Stores Inc's working capital turnover has been increasing, indicating improved efficiency in utilizing working capital to drive sales growth.
Overall, Ross Stores Inc's activity ratios suggest a reasonable level of efficiency in managing inventory, receivables, payables, and working capital to support its sales operations. Continued monitoring and improvement in these ratios can help enhance operational efficiency and financial performance.
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 | 58.47 | 44.28 | 54.06 | 52.96 | 44.21 |
| Days of sales outstanding (DSO) | days | — | 2.32 | — | — | 2.84 |
| Number of days of payables | days | — | 39.51 | — | — | 43.91 |
Ross Stores Inc's activity ratios can provide insights into how efficiently the company manages its inventory, collects receivables, and pays its suppliers.
1. Days of Inventory on Hand (DOH): Ross Stores Inc's DOH has fluctuated over the years, ranging from 44.21 days to 58.47 days. A lower DOH indicates a more efficient management of inventory, as the company is able to sell its inventory quickly. The increase in DOH from 2023 to 2025 may suggest inefficiencies in inventory turnover or changes in the company's inventory management strategy.
2. Days of Sales Outstanding (DSO): Ross Stores Inc's DSO values are provided only for 2023 and 2024, with 2.84 days and 2.32 days respectively. A lower DSO indicates that the company is efficient in collecting payments from customers. The absence of DSO data for some years may indicate that the company's accounts receivable turnover is not as significant or that the data is not readily available.
3. Number of Days of Payables: The data provides information on the number of days Ross Stores Inc takes to pay its suppliers. The values range from 39.51 days to 43.91 days. A higher number of days of payables suggests that the company takes a longer time to settle its payables, which can be an advantage in terms of cash flow management. Similar to DSO, the absence of data for some years may suggest that payables turnover is not as significant or easily accessible.
Overall, analyzing these activity ratios can help assess the efficiency of Ross Stores Inc's operations in managing its inventory, receivables, and payables. A detailed analysis combining these ratios with other financial metrics could provide a more comprehensive understanding of the company's operational efficiency and performance.
See also:
Long-term
| Jan 31, 2025 | Feb 3, 2024 | Jan 31, 2024 | Jan 31, 2023 | Jan 28, 2023 | |
|---|---|---|---|---|---|
| Fixed asset turnover | — | 5.82 | — | 5.88 | 5.88 |
| Total asset turnover | 1.42 | 1.44 | 1.42 | 1.39 | 1.39 |
Ross Stores Inc's long-term activity ratios reflect its efficiency in utilizing assets to generate sales.
1. Fixed Asset Turnover:
- In January 2023 and January 2024, Ross Stores had a fixed asset turnover ratio of 5.88, indicating that the company generated $5.88 in sales for every dollar invested in fixed assets.
- No data was provided for January 31, 2024, but in February 3, 2024, the fixed asset turnover was 5.82, maintaining a high level of efficiency.
- The consistent high ratios indicate that Ross Stores efficiently employs its fixed assets to drive revenue.
2. Total Asset Turnover:
- The total asset turnover ratio for Ross Stores was 1.39 in January 28, 2023, January 31, 2023, and January 31, 2025.
- The ratio improved to 1.42 on January 31, 2024, and further increased to 1.44 by February 3, 2024.
- The uptrend in total asset turnover signifies that Ross Stores effectively utilizes its total assets to generate sales over the years, reflecting an increasing efficiency in asset management.
In conclusion, Ross Stores Inc demonstrates solid efficiency in utilizing both fixed and total assets to drive sales, as indicated by the consistently high fixed asset turnover ratios and the improving trend in total asset turnover over the years.