Skechers USA Inc (SKX)

Short-term

Turnover ratios

Skechers USA Inc's inventory turnover ratio, which measures how efficiently the company manages its inventory, shows a slight fluctuation over the years, ranging from 2.16 in 2020 to 2.52 in 2023. A decrease in this ratio could indicate that the company is holding onto its inventory for a longer period, which may tie up resources and impact profitability.

The receivables turnover ratio, which assesses how effectively the company collects on its credit sales, is not available in the provided data. This ratio is crucial for understanding the company's ability to convert credit sales into cash promptly.

Similarly, the payables turnover ratio, which evaluates how effectively the company pays its suppliers, is not provided. A higher payables turnover ratio generally indicates that the company is efficiently managing its payments to vendors.

The working capital turnover ratio, which measures how well the company utilizes its working capital to generate sales, shows an improving trend from 2.16 in 2020 to 4.09 in 2024. A higher working capital turnover ratio suggests that the company is effectively using its resources to drive revenue growth.

Overall, while Skechers USA Inc demonstrates solid inventory turnover and improving working capital turnover ratios, further data on receivables turnover and payables turnover would provide a more comprehensive picture of the company's operational efficiency and financial management.

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Average number of days

The activity ratios provide insights into how efficiently Skechers USA Inc manages its inventory, receivables, and payables.

1. Days of Inventory on Hand (DOH):
- The DOH ratio measures how many days, on average, inventory is held before being sold. For Skechers USA Inc, the DOH increased from 154.14 days in 2020 to 166.73 days in 2024. This indicates that inventory turnover slowed down over the years, which could imply overstocking or decreasing demand for its products. The company might need to reevaluate its inventory management strategies to optimize working capital and reduce carrying costs.

2. Days of Sales Outstanding (DSO):
- The DSO ratio reflects the average number of days it takes for the company to collect outstanding receivables. Since the data shows that DSO is not provided for any year, we are unable to assess the efficiency of Skechers USA Inc in collecting payments from customers based on this metric. However, a lower DSO value would typically indicate a faster receivables turnover and better cash flow management.

3. Number of Days of Payables:
- The number of days of payables indicates the average number of days the company takes to pay its suppliers. Similarly, since the data does not provide information on payables for any year, we are unable to evaluate Skechers USA Inc's payables management efficiency based on this metric. Typically, a longer payable period allows the company to hold onto cash for a more extended period, improving liquidity.

In conclusion, based on the available data, Skechers USA Inc appears to have experienced a decrease in inventory turnover over the years, while information regarding the efficiency of its receivables and payables management is not provided. Monitoring and improving these activity ratios can help the company enhance its working capital management and overall operational efficiency.

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Long-term

The fixed asset turnover ratio measures how efficiently a company is generating sales from its investment in fixed assets. In the case of Skechers USA Inc, the fixed asset turnover has fluctuated over the years:

1. In 2020, the fixed asset turnover ratio was 4.91, indicating that Skechers generated $4.91 in sales for every $1 invested in fixed assets. This high ratio suggests efficient utilization of fixed assets to generate revenue.

2. By 2021, the fixed asset turnover ratio decreased to 2.67, signifying a decline in the efficiency of generating sales from fixed assets. This may indicate that the company's fixed assets were not being utilized as effectively as before.

3. In 2022, the fixed asset turnover improved slightly to 2.92, suggesting a better utilization of fixed assets compared to the previous year. However, it still remained below the 2020 levels.

4. Unfortunately, the data for 2023 and 2024 is unavailable (indicated by "—"), making it difficult to assess the trend in fixed asset turnover during these years.

Moreover, the total asset turnover ratio reflects the company's ability to generate sales from its total assets. For Skechers USA Inc:

1. In 2020, the total asset turnover ratio was 0.79, indicating that the company generated $0.79 in sales for every $1 of total assets. This suggests that Skechers may have had lower sales relative to its total asset base during that year.

2. By 2021, the total asset turnover ratio improved to 0.97, showing an increase in the efficiency of generating sales from total assets. This improvement may indicate better utilization of assets to generate revenue.

3. In 2022, the total asset turnover ratio further increased to 1.08, suggesting that Skechers was able to generate more sales per dollar of total assets invested. This improvement reflects a more efficient use of assets to drive revenue.

4. The total asset turnover ratio remained relatively stable at 1.06 in both 2023 and 2024, indicating that the company maintained its efficiency in generating sales from total assets during these years.

Overall, analyzing the long-term activity ratios of Skechers USA Inc reveals fluctuations in the efficiency of utilizing fixed assets for generating sales, as well as an improvement in generating sales from total assets over the years, with some variability in the trends observed.