Urban Outfitters Inc (URBN)
Activity ratios
Short-term
Turnover ratios
| Jan 31, 2024 | Jan 31, 2023 | Jan 31, 2022 | Jan 31, 2021 | Jan 31, 2020 | |
|---|---|---|---|---|---|
| Inventory turnover | 6.23 | 5.72 | 5.36 | 6.60 | 6.66 |
| Receivables turnover | 76.73 | 68.08 | 71.34 | 38.18 | 44.96 |
| Payables turnover | 13.52 | 13.05 | 10.04 | 10.84 | 16.26 |
| Working capital turnover | 17.83 | 13.79 | 14.95 | 10.83 | 9.57 |
The inventory turnover ratio for Urban Outfitters Inc has shown a slight fluctuation over the past five years, ranging from 5.36 to 6.66 times. This indicates that the company is able to effectively manage its inventory levels, with a higher ratio suggesting efficient inventory management.
The receivables turnover ratio has exhibited an increasing trend over the same period, from 38.18 to 76.73 times. This signifies that Urban Outfitters Inc is collecting its accounts receivable more quickly, which is a positive sign of its credit management and liquidity.
The payables turnover ratio has been relatively stable, varying from 10.04 to 16.26 times. A higher payables turnover ratio suggests that the company is paying off its creditors more rapidly, potentially improving its cash flow and financial flexibility.
The working capital turnover ratio has demonstrated an upward trajectory, from 9.57 to 17.83 times, indicating that Urban Outfitters Inc is utilizing its working capital more efficiently to generate sales revenue. This suggests effective management of the company's operating cycle and working capital.
In conclusion, the activity ratios of Urban Outfitters Inc reflect efficient management of inventory, receivables, payables, and working capital over the analyzed period, implying sound operational performance and financial management practices.
Average number of days
| Jan 31, 2024 | Jan 31, 2023 | Jan 31, 2022 | Jan 31, 2021 | Jan 31, 2020 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 58.62 | 63.79 | 68.07 | 55.28 | 54.77 |
| Days of sales outstanding (DSO) | days | 4.76 | 5.36 | 5.12 | 9.56 | 8.12 |
| Number of days of payables | days | 26.99 | 27.97 | 36.35 | 33.68 | 22.45 |
The activity ratios of Urban Outfitters Inc indicate the efficiency of the company's operations in managing its inventory, receivables, and payables.
Days of inventory on hand (DOH) measures how many days, on average, inventory is held before being sold. A lower DOH indicates faster inventory turnover, which is generally favorable for reducing holding costs and potential obsolescence. Urban Outfitters has shown a decreasing trend in DOH over the past five years, which suggests improved inventory management efficiency.
Days of sales outstanding (DSO) represents the average number of days it takes for the company to collect payment from its customers after a sale. A lower DSO is preferable as it indicates quicker conversion of sales into cash. Urban Outfitters has maintained relatively low DSO figures over the years, reflecting effective credit management and timely collection of receivables.
Number of days of payables shows the average number of days the company takes to pay its suppliers. A longer payables period indicates that the company is taking longer to settle its obligations, which could imply better cash flow management. Urban Outfitters has exhibited fluctuating numbers in days of payables, with the trend not clearly indicating a significant pattern.
In conclusion, Urban Outfitters Inc has shown efficiency in managing its inventory and receivables based on the decreasing trend in DOH and consistently low DSO figures. However, the company's management of payables appears to be less consistent over the years. It is important for the company to continue monitoring and optimizing its activity ratios to enhance operational effectiveness and financial performance.
Long-term
| Jan 31, 2024 | Jan 31, 2023 | Jan 31, 2022 | Jan 31, 2021 | Jan 31, 2020 | |
|---|---|---|---|---|---|
| Fixed asset turnover | 4.00 | 4.03 | 3.97 | 3.55 | 4.46 |
| Total asset turnover | 1.25 | 1.30 | 1.20 | 0.97 | 1.20 |
The fixed asset turnover ratio measures how efficiently a company generates sales revenue from its investments in fixed assets such as property, plant, and equipment. A higher fixed asset turnover ratio indicates that the company is effectively utilizing its fixed assets to generate sales.
In the case of Urban Outfitters Inc, the fixed asset turnover ratio has been relatively high and stable over the past five years, ranging from 3.55 to 4.46. This suggests that the company has been consistently efficient in generating sales from its fixed assets during this period.
On the other hand, the total asset turnover ratio measures the company's ability to generate sales from all its assets, both fixed and current. A higher total asset turnover ratio indicates better overall asset utilization efficiency.
Urban Outfitters Inc's total asset turnover ratio has ranged from 0.97 to 1.30 over the past five years. The increase in this ratio from 2020 to 2023 indicates an improvement in the company's ability to generate sales from its total assets. However, there was a slight decline in 2024 compared to the previous year.
Overall, these ratios suggest that Urban Outfitters Inc has been efficiently using its fixed assets to generate sales and has shown improvement in its overall asset utilization efficiency, although there was a slight decline in the total asset turnover ratio in the most recent year.