Williams-Sonoma Inc (WSM)
Activity ratios
Short-term
Turnover ratios
| Jan 31, 2025 | Jan 31, 2024 | Jan 28, 2024 | Jan 31, 2023 | Jan 29, 2023 | |
|---|---|---|---|---|---|
| Inventory turnover | 3.10 | 3.57 | 1.67 | 3.43 | 1.50 |
| Receivables turnover | — | — | 63.06 | — | 74.98 |
| Payables turnover | — | — | 3.42 | — | 4.29 |
| Working capital turnover | 9.15 | 9.23 | 9.23 | 21.71 | 21.71 |
Based on the provided data for Williams-Sonoma Inc, let's analyze the activity ratios:
1. Inventory Turnover:
- The inventory turnover ratio indicates how efficiently the company manages its inventory.
- Williams-Sonoma's inventory turnover has fluctuated over the years, from 1.50 in January 29, 2023, to 3.10 in January 31, 2025.
- A higher turnover ratio suggests efficient inventory management and better sales performance.
2. Receivables Turnover:
- Receivables turnover measures how quickly the company collects its accounts receivable.
- The data shows that there are missing values for some periods, but it was 74.98 in January 29, 2023, and declined to 63.06 in January 28, 2024.
- A higher turnover ratio indicates effective credit policies and timely collection of receivables.
3. Payables Turnover:
- The payables turnover ratio reflects how quickly the company pays its suppliers.
- Similar to receivables turnover, there are missing values for some periods, but it was 4.29 in January 29, 2023, and declined to 3.42 in January 28, 2024.
- A higher turnover ratio suggests efficient management of payables and good relationships with suppliers.
4. Working Capital Turnover:
- This ratio measures how efficiently the company utilizes its working capital to generate sales.
- Williams-Sonoma's working capital turnover remained consistent around 9.15 to 21.71 over the years.
- A higher turnover ratio indicates effective utilization of working capital in generating sales revenue.
Overall, analyzing and understanding these activity ratios can provide insights into Williams-Sonoma Inc's operational efficiency, inventory management, and effectiveness in managing its working capital and relationships with customers and suppliers.
Average number of days
| Jan 31, 2025 | Jan 31, 2024 | Jan 28, 2024 | Jan 31, 2023 | Jan 29, 2023 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 117.78 | 102.30 | 218.63 | 106.37 | 243.59 |
| Days of sales outstanding (DSO) | days | — | — | 5.79 | — | 4.87 |
| Number of days of payables | days | — | — | 106.63 | — | 85.03 |
Based on the provided data for Williams-Sonoma Inc, let's analyze the activity ratios.
1. Days of Inventory on Hand (DOH):
- In January 2023, Williams-Sonoma held inventory for an average of 243.59 days, indicating a relatively high inventory turnover period.
- By January 2024, the DOH decreased significantly to 218.63 days, suggesting an improvement in inventory management efficiency.
- However, by January 2025, the DOH increased slightly to 117.78 days, indicating a longer inventory turnover period compared to the previous year.
2. Days of Sales Outstanding (DSO):
- In January 2023, Williams-Sonoma collected receivables within an average of 4.87 days, reflecting a quick turnover of accounts receivable.
- The absence of data for DSO in subsequent years (2024 and 2025) prevents a detailed analysis of the trend in accounts receivable collection efficiency.
3. Number of Days of Payables:
- In January 2023, Williams-Sonoma took an average of 85.03 days to pay its suppliers, indicating a moderate payment period.
- The lack of data for payables in later years hinders the assessment of changes in the company's payment practices over time.
Overall, the analysis of activity ratios reveals fluctuations in inventory turnover and payment periods for Williams-Sonoma Inc, indicating variations in operational efficiency and working capital management across the reported periods.
See also:
Long-term
| Jan 31, 2025 | Jan 31, 2024 | Jan 28, 2024 | Jan 31, 2023 | Jan 29, 2023 | |
|---|---|---|---|---|---|
| Fixed asset turnover | — | — | 7.65 | 3.69 | 8.14 |
| Total asset turnover | 1.45 | 1.47 | 1.47 | 1.86 | 1.86 |
Long-term activity ratios provide insights into how efficiently a company is utilizing its fixed and total assets to generate sales revenue.
1. Fixed Asset Turnover:
- In January 2023, Williams-Sonoma Inc had a fixed asset turnover of 8.14, indicating that the company generated $8.14 in sales revenue for every dollar invested in fixed assets.
- By January 2024, the fixed asset turnover decreased to 7.65, although it remained relatively high, suggesting the company was still efficiently utilizing its fixed assets to generate sales.
- The absence of data for January 31, 2024, and 2025 makes it challenging to assess the trend in fixed asset turnover over these periods.
2. Total Asset Turnover:
- The total asset turnover for Williams-Sonoma Inc was consistent at 1.86 in both January 29, 2023, and January 31, 2023, showing that the company generated $1.86 in sales revenue for every dollar invested in total assets during these periods.
- However, there was a slight decline in total asset turnover to 1.47 by January 28, 2024, and it remained stable at 1.47 by January 31, 2024.
- Further, by January 31, 2025, the total asset turnover dropped to 1.45, indicating a slight decrease in the efficiency of utilizing total assets to generate revenue.
Overall, the analysis of the long-term activity ratios for Williams-Sonoma Inc suggests that the company's efficiency in generating sales revenue from both fixed and total assets has varied over the analyzed periods. Fixed asset turnover has seen fluctuations, while total asset turnover has shown a slight decline, indicating the need for further examination to understand the underlying reasons for these changes.