Steven Madden Ltd (SHOO)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Inventory turnover | 5.22 | 5.02 | 5.46 | 4.30 | 7.27 |
| Receivables turnover | — | — | 8.55 | 5.11 | 4.76 |
| Payables turnover | 6.51 | 7.13 | 9.56 | 8.03 | 9.98 |
| Working capital turnover | 4.75 | 4.15 | 4.06 | 3.66 | 2.60 |
Steven Madden Ltd's activity ratios provide insights into how efficiently the company manages its inventory, receivables, payables, and working capital.
1. Inventory Turnover: This ratio indicates how many times a company's inventory is sold and replaced over a specific period. Steven Madden Ltd's inventory turnover has shown some fluctuations over the years, decreasing from 7.27 in 2020 to 4.30 in 2021, but then gradually increasing to 5.22 in 2024. This suggests that the company's inventory management efficiency improved after a slight dip in 2021.
2. Receivables Turnover: This ratio reflects how efficiently a company collects cash from its customers. Steven Madden Ltd's receivables turnover increased from 4.76 in 2020 to 8.55 in 2022, indicating that the company effectively managed its accounts receivable during this period. However, data is not available for 2023 and 2024, so we can't assess the trend for these years.
3. Payables Turnover: The payables turnover ratio indicates how quickly a company pays off its suppliers. Steven Madden Ltd's payables turnover decreased from 9.98 in 2020 to 6.51 in 2024, suggesting a longer payment period to suppliers over the years. While a lower ratio may indicate better liquidity management, it could also signal potential strain on supplier relationships.
4. Working Capital Turnover: This ratio measures how efficiently a company utilizes its working capital to generate sales. Steven Madden Ltd's working capital turnover has been increasing consistently from 2.60 in 2020 to 4.75 in 2024, indicating a positive trend in utilizing working capital to drive sales growth over the years. This indicates effective management of current assets and liabilities in supporting revenue generation.
In conclusion, Steven Madden Ltd's activity ratios reflect varying degrees of efficiency in managing inventory, receivables, payables, and working capital over the years. Monitoring these ratios can help assess the company's operational performance and identify areas for improvement in its working capital management.
Average number of days
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 69.86 | 72.73 | 66.89 | 84.79 | 50.21 |
| Days of sales outstanding (DSO) | days | — | — | 42.70 | 71.39 | 76.74 |
| Number of days of payables | days | 56.10 | 51.18 | 38.17 | 45.44 | 36.59 |
To analyze Steven Madden Ltd's activity ratios, we will focus on the following metrics:
1. Days of Inventory on Hand (DOH):
- The company held inventory for 50.21 days as of December 31, 2020, which increased to 84.79 days by December 31, 2021. This indicates a significant increase in the number of days it takes to sell its inventory.
- The DOH decreased to 66.89 days by December 31, 2022, before rising again to 72.73 days by December 31, 2023. The trend suggests some fluctuation in managing inventory levels.
- By December 31, 2024, the DOH improved slightly to 69.86 days, but it is still higher compared to previous years, indicating that the company may need to optimize its inventory management further.
2. Days of Sales Outstanding (DSO):
- The DSO was 76.74 days as of December 31, 2020, showing that it took the company around 77 days to collect its accounts receivable.
- The DSO decreased to 71.39 days by December 31, 2021, indicating a slight improvement in the collection of receivables.
- By December 31, 2022, the DSO decreased significantly to 42.70 days, indicating that the company may be able to collect receivables more efficiently.
- Data for 2023 and 2024 is not available, but the decreasing trend until 2022 is positive in terms of managing receivables efficiently.
3. Number of Days of Payables:
- Steven Madden Ltd took 36.59 days to pay its suppliers by December 31, 2020, which increased to 45.44 days by December 31, 2021.
- The number of days of payables decreased to 38.17 days by December 31, 2022, before increasing to 51.18 days by December 31, 2023, and further to 56.10 days by December 31, 2024.
- The increasing trend in the number of days of payables indicates that the company is taking longer to pay its suppliers, which could impact relationships with vendors.
In summary, while the company has shown fluctuations in its activity ratios over the years, it is essential for Steven Madden Ltd to carefully manage its inventory levels, improve collection of receivables, and monitor the increasing number of days of payables to enhance its overall operational efficiency and cash flow management.
Long-term
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Fixed asset turnover | 39.78 | 41.98 | 52.18 | 52.14 | 27.78 |
| Total asset turnover | 1.62 | 1.47 | 1.69 | 1.38 | 1.06 |
Steven Madden Ltd's long-term activity ratios, specifically the Fixed Asset Turnover and Total Asset Turnover, demonstrate the company's efficiency in utilizing its assets over the years.
1. Fixed Asset Turnover:
- The Fixed Asset Turnover ratio indicates how efficiently the company generates revenue from its fixed assets. The higher the ratio, the better the company is utilizing its fixed assets to generate sales.
- Over the past five years, Steven Madden Ltd's Fixed Asset Turnover has shown varying performance. The ratio increased from 27.78 in 2020 to 52.18 in 2022, indicating a significant improvement in the utilization of fixed assets.
- However, in 2023 and 2024, the ratio declined to 41.98 and 39.78, respectively. This suggests a slight decrease in the efficiency of generating revenue from fixed assets compared to the previous year.
2. Total Asset Turnover:
- The Total Asset Turnover ratio measures how effectively the company is generating sales from all its assets, including both fixed and current assets. A higher ratio implies better asset utilization.
- Steven Madden Ltd's Total Asset Turnover ratio has shown a positive trend over the five-year period. The ratio increased from 1.06 in 2020 to 1.62 in 2024, indicating an overall improvement in generating sales from all assets.
- The increasing trend in Total Asset Turnover signifies that the company is becoming more efficient in utilizing both fixed and current assets to drive revenue growth.
In conclusion, although there were fluctuations in the Fixed Asset Turnover ratio, the overall increase in the Total Asset Turnover ratio suggests that Steven Madden Ltd has been successful in enhancing its asset utilization efficiency over the years. Additional analysis of the company's operations and industry comparisons would provide a more comprehensive understanding of its long-term activity performance.