Ross Stores Inc (ROST)

Short-term

Turnover ratios

Ross Stores Inc's inventory turnover has been relatively stable over the past five years, ranging from 7.33 to 8.26 times. This indicates that the company is effectively managing its inventory levels and converting inventory into sales.

The receivables turnover ratio has shown a fluctuating trend, with a sharp increase in 2023 to 158.01 before decreasing slightly in 2024 to 157.08. This suggests that the company is efficient in collecting payments from customers, with a notable improvement in 2023.

In terms of payables turnover, Ross Stores Inc has shown a consistent performance with ratios ranging from 5.47 to 10.72. A higher payables turnover ratio indicates that the company is paying its suppliers more frequently, which can be beneficial for managing cash flows.

The working capital turnover ratio has shown a significant decrease in 2024 compared to 2020, indicating that the company is generating less revenue per dollar of working capital. However, the ratio has remained relatively stable in recent years, suggesting consistent efficiency in utilizing working capital to generate sales.

Overall, Ross Stores Inc's activity ratios reflect effective management of inventory, receivables, payables, and working capital, which are all essential components of its operating efficiency and financial performance.

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Average number of days

Based on the activity ratios provided for Ross Stores Inc over the past five years, we can observe the following trends:

1. Days of Inventory on Hand (DOH):
- DOH has been relatively stable over the period, ranging from 44.21 days to 49.79 days.
- This indicates that Ross Stores has maintained efficient control over its inventory levels, ensuring that it does not hold excess inventory that could tie up capital unnecessarily.

2. Days of Sales Outstanding (DSO):
- DSO has shown varying trends over the years, with the lowest value recorded in 2022 at 2.31 days.
- This suggests that Ross Stores has been able to collect its accounts receivable quickly, indicating strong credit management practices.

3. Number of Days of Payables:
- The number of days of payables has fluctuated significantly over the years, ranging from 34.06 days to 66.75 days.
- This indicates that the company has had varying relationships with its suppliers in terms of payment terms and negotiations.

Overall, Ross Stores Inc has demonstrated efficient management of its inventory levels and accounts receivable, which are crucial factors in maintaining healthy cash flows and working capital management. The fluctuation in the number of days of payables suggests some variability in the company's relationship with suppliers and its approach to managing its payables effectively.

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See also:

Ross Stores Inc Short-term (Operating) Activity Ratios

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Long-term

Looking at Ross Stores Inc's long-term activity ratios, we can see that the fixed asset turnover has been relatively stable over the past five years, with values ranging from 4.50 to 6.50. This ratio measures how efficiently the company generates sales revenue from its investment in fixed assets. A higher fixed asset turnover indicates better utilization of fixed assets to generate sales.

On the other hand, the total asset turnover ratio has shown more variability, ranging from 0.96 to 1.72 over the same period. This ratio measures the company's ability to generate sales from its total assets. A higher total asset turnover suggests that the company is efficient in generating sales using all its assets, including both fixed and current assets.

Overall, Ross Stores Inc has maintained a healthy level of efficiency in utilizing both its fixed assets and total assets to generate sales over the past five years. The company's fixed asset turnover indicates consistent performance in generating sales from its investment in fixed assets, while the total asset turnover shows variability but overall efficiency in generating sales from all its assets.

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See also:

Ross Stores Inc Long-term (Investment) Activity Ratios