Signet Jewelers Ltd (SIG)

Short-term

Turnover ratios

Signet Jewelers Ltd has shown improvements in its inventory turnover ratio over the years, indicating that the company is managing its inventory more efficiently. The ratio has increased from 3.19 in January 30, 2021, to 4.19 in February 1, 2025.

In terms of receivables turnover, the company has significantly improved its collection efficiency, with the ratio rising from 36.79 in January 30, 2021, to 469.39 in February 1, 2025. This suggests that Signet Jewelers is collecting its receivables at a much faster rate in recent years.

Similarly, the payables turnover ratio has also shown a positive trend, increasing from 7.98 in January 30, 2021, to 10.59 in February 1, 2025. This implies that the company is taking longer to pay its suppliers, which can have a positive impact on its cash conversion cycle.

Lastly, the working capital turnover ratio has increased from 3.26 in January 30, 2021, to 7.62 in February 1, 2025. This indicates that Signet Jewelers is generating more revenue per dollar of working capital invested, reflecting improved efficiency in utilizing its working capital.

Overall, the activity ratios of Signet Jewelers Ltd demonstrate a positive trend in managing its inventory, receivables, payables, and working capital, which could lead to improved financial performance and operational efficiency in the future.

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Average number of days

Based on the provided data for Signet Jewelers Ltd, we can analyze the activity ratios as follows:

1. Days of Inventory on Hand (DOH):
- The average number of days it takes for Signet Jewelers to sell its inventory decreased from 114.43 days in January 2021 to 87.09 days in February 2025.
- A decreasing trend in DOH indicates that Signet Jewelers has been managing its inventory more efficiently over the years, which could lead to lower carrying costs and improved cash flow.

2. Days of Sales Outstanding (DSO):
- The average number of days it takes for Signet Jewelers to collect payment from customers decreased significantly from 9.92 days in January 2021 to 0.78 days in February 2025.
- A declining DSO suggests that Signet Jewelers has been successful in accelerating its cash collection process, which can enhance liquidity and working capital management.

3. Number of Days of Payables:
- The average number of days Signet Jewelers takes to pay its suppliers decreased from 45.75 days in January 2021 to 34.48 days in February 2025.
- A reduction in the number of days of payables indicates that the company may be improving its relationships with suppliers, potentially benefiting from favorable credit terms and maintaining a healthy supplier network.

Overall, the trend in these activity ratios reflects that Signet Jewelers has been effectively managing its inventory, collections, and payments, which can contribute to enhanced operational efficiency and financial performance over the years.

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Long-term

The fixed asset turnover ratio for Signet Jewelers Ltd has shown an upward trend over the years, from 8.53 in January 30, 2021, to a peak of 14.47 in February 3, 2024, before slightly decreasing to 13.25 in February 1, 2025. This indicates that the company has been able to generate more sales revenue relative to its investment in fixed assets.

On the other hand, the total asset turnover ratio has fluctuated over the same period, with a low of 0.84 in January 30, 2021, to a high of 1.19 in January 29, 2022, before stabilizing around 1.06 to 1.17 in the following years. This ratio reflects how efficiently the company is utilizing its total assets to generate sales revenue.

Overall, the increasing trend in fixed asset turnover suggests that Signet Jewelers has become more efficient in utilizing its fixed assets to generate sales, while the total asset turnover ratio indicates varying levels of asset utilization efficiency over the years. Further analysis would be needed to understand the specific factors contributing to these trends in the company's long-term activity ratios.