VF Corporation (VFC)

Short-term

Turnover ratios

Inventory Turnover:
- VF Corporation's inventory turnover has fluctuated over the years, ranging from a low of 1.96 to a high of 4.12.
- The trend indicates some variability in managing inventory levels efficiently, with a potential impact on cash flow and working capital.

Receivables Turnover:
- The receivables turnover for VF Corporation has shown a similar pattern of fluctuation, with values ranging from 5.50 to 9.71.
- This variability suggests changes in the efficiency of collecting outstanding receivables, which could affect the company's liquidity and working capital management.

Payables Turnover:
- The payables turnover ratio has also varied for VF Corporation, with values between 4.21 and 13.16.
- The trend indicates fluctuations in how quickly the company pays its suppliers, affecting its cash conversion cycle and potentially relationships with vendors.

Working Capital Turnover:
- The working capital turnover ratio has seen significant fluctuations, starting from 1.83 and reaching a peak of 34.45.
- These changes highlight shifts in how efficiently VF Corporation is utilizing its working capital to generate sales, reflecting potential operational and financial management challenges.

In summary, VF Corporation's activity ratios show fluctuations over time, indicating varying levels of efficiency in managing inventory, receivables, payables, and working capital. Monitoring and improving these ratios can help enhance the company's operational performance and financial health.

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Average number of days

The activity ratios of VF Corporation provide insights into how efficiently the company manages its operating cycle.

1. Days of Inventory on Hand (DOH): The trend in VF Corporation's DOH shows fluctuations over the periods, ranging from 88.67 days to a peak of 186.38 days. A higher DOH may indicate overstocking or slow-moving inventory, tying up capital and potentially leading to obsolescence risks. It is essential for VF Corporation to effectively manage inventory levels to optimize working capital and reduce holding costs.

2. Days of Sales Outstanding (DSO): The DSO for VF Corporation demonstrates variability, fluctuating between 37.57 days to 66.38 days. A lower DSO suggests faster collection of receivables, improving cash flow and liquidity. However, a very low DSO could signal stringent credit policies that may impact sales. VF Corporation should focus on maintaining an optimal balance between timely collections and maintaining customer relationships.

3. Number of Days of Payables: VF Corporation's days of payables range from 27.74 days to 85.75 days, showing fluctuations in the time taken to settle obligations to suppliers. A higher number of days of payables may reflect a flexible payment policy, providing short-term financing. However, an excessively high number of days may strain supplier relationships and impact future credit terms. It is crucial for VF Corporation to manage payables effectively to maintain good relationships with suppliers while optimizing cash flow.

Overall, VF Corporation should aim to strike a balance between inventory management, accounts receivable collection, and payables turnover to enhance operational efficiency and working capital management. Regular monitoring and strategic adjustments to these activity ratios can help VF Corporation improve its financial health and sustainable growth.

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Long-term

The fixed asset turnover ratio for VF Corporation has shown a declining trend from June 30, 2020, to December 31, 2022, ranging from 10.40 to 4.93. This indicates that the company's ability to generate sales from its fixed assets decreased over this period. However, from March 31, 2022, to September 30, 2023, there was a slight improvement in the ratio, suggesting a better utilization of fixed assets. The ratio then stabilized around 5.00 from December 31, 2023, onwards.

On the other hand, the total asset turnover ratio varied over the years but generally remained within the range of 0.64 to 0.94. This ratio measures how efficiently the company is using its total assets to generate revenue. Notably, there were fluctuations in the ratio, with an uptrend from December 31, 2020, to March 31, 2025. This indicates an overall improvement in the company's ability to generate sales relative to its total assets over the years.

In summary, while the fixed asset turnover ratio fluctuated with a general declining trend followed by stabilization, the total asset turnover ratio showed variability with an increasing trend over the years. These ratios suggest that VF Corporation may have made changes in its asset utilization strategies to improve efficiency and optimize its operations.