Tapestry Inc (TPR)

Short-term

Turnover ratios

The inventory turnover ratio for Tapestry Inc has varied over the past five years, ranging from 2.05 to 2.34. This indicates that the company has been able to efficiently manage its inventory levels, turning over its inventory approximately 2.16 times in the most recent year.

In terms of receivables turnover, Tapestry has shown consistency in collecting its receivables efficiently, with ratios ranging from 25.67 to 31.49 times over the past five years. The latest figure of 29.23 suggests that the company has a high rate of receivables turnover, indicating effective management of customer credit.

The payables turnover ratio for Tapestry has fluctuated significantly, from 3.74 to 13.17 over the five-year period. A lower payables turnover ratio implies that the company is taking longer to pay its suppliers. The latest ratio of 3.94 indicates that Tapestry is paying its suppliers approximately four times a year.

The working capital turnover ratio has also shown variability, ranging from 2.95 to 6.18 over the five years. The ratio of 0.94 for the most recent year suggests that Tapestry is generating approximately $0.94 in revenue for every $1 of working capital invested.

Overall, Tapestry Inc has demonstrated effective management of its inventory, receivables, and payables turnover over the years, indicating operational efficiency and financial stability.

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Average number of days

Days of inventory on hand (DOH) measures how many days it takes for a company to sell its inventory. A lower DOH indicates more efficient inventory management. Tapestry Inc's DOH has shown a slight improvement from 172.47 days in 2023 to 168.97 days in 2024, which could suggest better inventory control.

Days of sales outstanding (DSO) reflects the average number of days it takes for a company to collect payment after a sale. A lower DSO is generally preferable as it indicates faster cash conversion. Tapestry Inc's DSO has fluctuated over the years, with a decrease from 13.78 days in 2022 to 12.49 days in 2024, indicating improved efficiency in collecting accounts receivable.

Number of days of payables represents the average number of days a company takes to pay its suppliers. A higher number indicates that the company is taking longer to fulfill its payment obligations, which can be beneficial in managing cash flow. Tapestry Inc's days of payables have increased significantly from 27.72 days in 2020 to 92.64 days in 2024, implying a shift towards a longer payment cycle that may aid in liquidity management but could strain supplier relationships.

Overall, Tapestry Inc's activity ratios suggest a mixed performance in managing its inventory, accounts receivable, and accounts payable over the years. Efficiencies have been demonstrated in inventory and accounts receivable management, while a notable increase in payables days might indicate a deliberate strategy to optimize cash flow.

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Long-term

The Fixed Asset Turnover ratio measures the efficiency with which a company utilizes its fixed assets to generate revenue. Tapestry Inc has shown consistent improvement in this ratio over the past five years, with values increasing from 6.40 in 2020 to 12.98 in 2024. This indicates that Tapestry has been able to generate significantly more revenue per dollar of fixed assets invested in the business.

On the other hand, the Total Asset Turnover ratio indicates how efficiently a company is utilizing all its assets to generate sales. Tapestry's Total Asset Turnover ratio has fluctuated over the past five years, reaching a peak of 0.94 in 2023, and declining to 0.50 in 2024. This suggests that while the company was more efficient in generating sales relative to its total assets in 2023, there has been a decrease in efficiency in 2024.

Overall, the significant improvement in Fixed Asset Turnover indicates that Tapestry Inc has been effectively leveraging its fixed assets to drive revenue growth. However, the fluctuation in Total Asset Turnover may indicate changes in the company's asset management strategies and efficiency in utilizing all assets for sales generation.