Skechers USA Inc (SKX)

Short-term

Turnover ratios

Skechers USA Inc's inventory turnover ratio has been relatively stable over the past few years, ranging between 2.14 and 2.90 times. This suggests that the company is efficient in managing its inventory as it indicates how many times the company's inventory is sold and replaced during the period.

The receivables turnover ratio is not available, indicating that the company may not disclose this information or it may not be applicable due to the nature of its business.

Similarly, the payables turnover ratio is not provided, making it difficult to assess how quickly the company pays its suppliers.

On the other hand, the working capital turnover ratio has shown a consistent upward trend from 2.16 to 4.09 times over the period. This signifies that Skechers is effective in utilizing its working capital to generate sales, reflecting the company's efficiency in managing its current assets and liabilities.

Overall, while the inventory turnover and working capital turnover ratios indicate good operational efficiency, the lack of data for receivables and payables turnover ratios limits a comprehensive analysis of the company's overall liquidity and cash flow management.

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Average number of days

Based on the provided data, we will analyze the activity ratios of Skechers USA Inc, focusing on Days of Inventory on Hand (DOH), Days of Sales Outstanding (DSO), and Number of Days of Payables.

1. Days of Inventory on Hand (DOH):
- The DOH represents the number of days a company takes to sell its inventory. A lower DOH indicates efficient inventory management.
- Skechers' DOH fluctuated during the period from March 31, 2020, to December 31, 2024, ranging from a low of 125.92 days to a high of 170.58 days.
- The average DOH over this period was approximately 148.74 days, suggesting that Skechers typically holds inventory for around 148 days before selling it.

2. Days of Sales Outstanding (DSO):
- Unfortunately, the DSO data is not available for the analyzed period. DSO measures how long it takes for a company to collect its accounts receivable. Lower DSO values indicate faster cash collection.

3. Number of Days of Payables:
- Similarly, the data for the Number of Days of Payables is not available in the provided information. This metric evaluates how long a company takes to pay its suppliers. A higher number of days indicates the company is taking longer to settle its payables.

Overall, based solely on the DOH data, it appears that Skechers USA Inc may need to focus on improving its inventory management efficiency to potentially lower its holding period and improve cash flow. It would be beneficial to analyze the DSO and Number of Days of Payables data in the future for a more comprehensive understanding of Skechers' overall activity ratios and liquidity position.

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Long-term

The fixed asset turnover ratio for Skechers USA Inc has shown a declining trend over the years, indicating that the company is generating less revenue for every dollar invested in fixed assets. The ratio decreased from 6.58 in March 2020 to 2.92 in December 2022 before slightly increasing to 2.94 in June 2023. However, by December 2023, the ratio was not available. This downward trend suggests potential inefficiencies in utilizing fixed assets to generate sales.

On the other hand, the total asset turnover ratio has displayed a fluctuating pattern during the same period. The ratio ranged from 0.79 in December 2020 to 1.09 in March 2024, with some periods of improvement and regression in between. Overall, the ratio seems to have improved over time, indicating the company's ability to generate more sales relative to its total assets.

In summary, while the fixed asset turnover ratio for Skechers USA Inc reflects a declining trend, the total asset turnover ratio shows a more varied performance. It is important for the company to closely monitor and improve the efficiency of its fixed assets to enhance overall operational performance and profitability.