Skechers USA Inc (SKX)

Short-term

Turnover ratios

Skechers U S A, Inc.'s activity ratios provide insights into the efficiency with which the company manages its assets and liabilities.

The inventory turnover ratio has been fluctuating over the quarters, ranging from 2.16 to 2.82. A higher inventory turnover indicates that Skechers is selling its inventory more efficiently. Despite the fluctuations, the company's inventory turnover has generally improved over the quarters, suggesting better management of inventory levels.

The receivables turnover ratio shows how quickly Skechers is collecting on its credit sales. The company has been able to collect on its receivables relatively quickly, with ratios ranging from 6.17 to 8.49. A higher receivables turnover ratio typically indicates better credit management practices.

The payables turnover ratio reflects how quickly Skechers is paying its suppliers. The ratios range from 3.70 to 4.91, indicating that the company is able to pay its suppliers at a consistent pace across quarters. A higher payables turnover ratio may suggest that the company is efficiently managing its accounts payable.

The working capital turnover ratio measures how well Skechers is utilizing its working capital to generate sales. The ratios range from 3.31 to 3.66, showing consistent performance in utilizing working capital efficiently to generate revenue.

Overall, Skechers U S A, Inc. demonstrates efficient management of its inventory, receivables, payables, and working capital based on the activity ratios analyzed. Consistent improvements in these ratios over time reflect the company's efforts to enhance operational efficiency and optimize its financial performance.

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Average number of days

Activity ratios provide insights into how efficiently a company manages its assets and operations. Let's analyze the activity ratios of Skechers U S A, Inc. based on the given data:

1. Days of Inventory on Hand (DOH):
- The average number of days it takes for Skechers to sell its inventory decreased from 168.88 days in Q4 2022 to 144.69 days in Q4 2023.
- The decreasing trend indicates that Skechers has been managing its inventory more efficiently, possibly through better demand forecasting or inventory management practices.

2. Days of Sales Outstanding (DSO):
- The average number of days it takes for Skechers to collect payment from its customers fluctuated over the quarters, ranging from 43.00 days in Q4 2023 to 59.18 days in Q1 2022.
- A lower DSO indicates that Skechers receives payments faster, which is generally positive for cash flow and liquidity.

3. Number of Days of Payables:
- The average number of days Skechers takes to pay its suppliers varied, with a range from 74.34 days in Q2 2023 to 98.74 days in Q2 2022.
- A longer number of days of payables suggests that Skechers is taking longer to pay its suppliers, which can be beneficial for cash flow management but may strain supplier relationships if extended excessively.

Overall, the trends in Skechers' activity ratios indicate improvements in inventory management and collections efficiency, but also highlight the need to monitor payment practices to ensure a balance between cash flow optimization and supplier relationships.

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Long-term

The fixed asset turnover ratio for Skechers U S A, Inc. has been relatively stable over the past eight quarters, ranging from 5.31 to 5.64. This indicates that the company generates sales revenue efficiently relative to its investment in fixed assets. The high fixed asset turnover ratios suggest that Skechers is effectively utilizing its fixed assets to generate sales.

On the other hand, the total asset turnover ratio for Skechers has also been quite consistent, fluctuating between 1.02 and 1.09 over the same period. This ratio indicates how well the company utilizes all its assets, including fixed and current assets, to generate sales. The relatively stable total asset turnover ratios suggest that Skechers is efficiently generating sales revenue relative to its total assets.

Overall, the consistent and relatively high fixed asset turnover ratios combined with the stable total asset turnover ratios indicate that Skechers U S A, Inc. effectively manages and utilizes its assets to generate sales, highlighting operational efficiency and effective asset utilization strategies.