Analysis of Short-term (Operating) Activity Ratios
Activity ratios measure how efficiently a company performs day-to-day tasks, such us the collection of receivables and management of inventory.
Short-term Activity Ratios (Summary)
RH, short-term (operating) activity ratios
Based on: 10-K (reporting date: 2023-01-28), 10-K (reporting date: 2022-01-29), 10-K (reporting date: 2021-01-30), 10-K (reporting date: 2020-02-01), 10-K (reporting date: 2019-02-02), 10-K (reporting date: 2018-02-03).
| Short-term activity ratio | Description | The company |
|---|---|---|
| Inventory turnover | An activity ratio calculated as cost of goods sold divided by inventory. | RH inventory turnover ratio deteriorated from 2021 to 2022 and from 2022 to 2023. |
| Receivables turnover | An activity ratio equal to revenue divided by receivables. | RH receivables turnover ratio improved from 2021 to 2022 but then slightly deteriorated from 2022 to 2023. |
| Payables turnover | An activity ratio calculated as cost of goods sold divided by payables. | RH payables turnover ratio increased from 2021 to 2022 and from 2022 to 2023. |
| Short-term activity ratio | Description | The company |
|---|---|---|
| Average inventory processing period | An activity ratio equal to the number of days in the period divided by inventory turnover over the period. | RH number of days of inventory outstanding deteriorated from 2021 to 2022 and from 2022 to 2023. |
| Average receivable collection period | An activity ratio equal to the number of days in the period divided by receivables turnover. | |
| Operating cycle | Equal to average inventory processing period plus average receivables collection period. | RH operating cycle deteriorated from 2021 to 2022 and from 2022 to 2023. |
| Average payables payment period | An estimate of the average number of days it takes a company to pay its suppliers; equal to the number of days in the period divided by payables turnover ratio for the period. | RH number of days of payables outstanding decreased from 2021 to 2022 and from 2022 to 2023. |
| Cash conversion cycle | A financial metric that measures the length of time required for a company to convert cash invested in its operations to cash received as a result of its operations; equal to average inventory processing period plus average receivables collection period minus average payables payment period. | RH cash conversion cycle deteriorated from 2021 to 2022 and from 2022 to 2023. |
Inventory Turnover
RH, inventory turnover calculation, comparison to benchmarks
| Jan 28, 2023 | Jan 29, 2022 | Jan 30, 2021 | Feb 1, 2020 | Feb 2, 2019 | Feb 3, 2018 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||
| Cost of goods sold | 1,778,492) | 1,903,409) | 1,523,095) | 1,552,426) | 1,504,806) | 1,591,107) | |
| Merchandise inventories | 801,841) | 734,289) | 544,227) | 438,696) | 531,947) | 527,026) | |
| Short-term Activity Ratio | |||||||
| Inventory turnover1 | 2.22 | 2.59 | 2.80 | 3.54 | 2.83 | 3.02 | |
| Benchmarks | |||||||
| Inventory Turnover, Competitors2 | |||||||
| Amazon.com Inc. | 9.15 | 8.40 | 8.34 | 9.80 | 8.08 | — | |
| GameStop Corp. | 6.67 | 5.10 | 6.36 | 5.30 | 4.78 | — | |
| Home Depot Inc. | 4.20 | 4.55 | 5.25 | 5.00 | 5.10 | — | |
| Lowe’s Cos. Inc. | 3.50 | 3.65 | 3.71 | 3.73 | 3.85 | — | |
| TJX Cos. Inc. | 6.21 | 5.82 | 5.66 | 6.13 | 6.08 | — | |
| Inventory Turnover, Sector | |||||||
| Consumer Discretionary Distribution & Retail | 6.19 | 6.09 | 6.36 | 6.81 | 6.04 | — | |
| Inventory Turnover, Industry | |||||||
| Consumer Discretionary | 6.98 | 6.66 | 7.03 | 7.46 | 7.68 | — | |
Based on: 10-K (reporting date: 2023-01-28), 10-K (reporting date: 2022-01-29), 10-K (reporting date: 2021-01-30), 10-K (reporting date: 2020-02-01), 10-K (reporting date: 2019-02-02), 10-K (reporting date: 2018-02-03).
1 2023 Calculation
Inventory turnover = Cost of goods sold ÷ Merchandise inventories
= 1,778,492 ÷ 801,841 = 2.22
2 Click competitor name to see calculations.
| Short-term activity ratio | Description | The company |
|---|---|---|
| Inventory turnover | An activity ratio calculated as cost of goods sold divided by inventory. | RH inventory turnover ratio deteriorated from 2021 to 2022 and from 2022 to 2023. |
Receivables Turnover
RH, receivables turnover calculation, comparison to benchmarks
| Jan 28, 2023 | Jan 29, 2022 | Jan 30, 2021 | Feb 1, 2020 | Feb 2, 2019 | Feb 3, 2018 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||
| Net revenues | 3,590,477) | 3,758,820) | 2,848,626) | 2,647,437) | 2,505,653) | 2,440,174) | |
| Accounts receivable, net | 59,763) | 57,914) | 59,474) | 48,979) | 40,224) | 31,412) | |
| Short-term Activity Ratio | |||||||
| Receivables turnover1 | 60.08 | 64.90 | 47.90 | 54.05 | 62.29 | 77.68 | |
| Benchmarks | |||||||
| Receivables Turnover, Competitors2 | |||||||
| Amazon.com Inc. | 16.86 | 19.32 | 23.26 | 26.09 | 22.26 | — | |
| GameStop Corp. | 38.51 | 42.60 | 48.34 | 45.57 | 61.74 | — | |
| Home Depot Inc. | 47.45 | 44.12 | 44.15 | 52.34 | 55.89 | — | |
| Lowe’s Cos. Inc. | — | — | — | — | — | — | |
| TJX Cos. Inc. | 88.70 | 93.79 | 69.69 | 108.00 | 112.54 | — | |
| Receivables Turnover, Sector | |||||||
| Consumer Discretionary Distribution & Retail | 23.21 | 26.59 | 30.67 | 35.37 | 33.78 | — | |
| Receivables Turnover, Industry | |||||||
| Consumer Discretionary | 17.88 | 18.00 | 21.26 | 21.89 | 21.60 | — | |
Based on: 10-K (reporting date: 2023-01-28), 10-K (reporting date: 2022-01-29), 10-K (reporting date: 2021-01-30), 10-K (reporting date: 2020-02-01), 10-K (reporting date: 2019-02-02), 10-K (reporting date: 2018-02-03).
1 2023 Calculation
Receivables turnover = Net revenues ÷ Accounts receivable, net
= 3,590,477 ÷ 59,763 = 60.08
2 Click competitor name to see calculations.
| Short-term activity ratio | Description | The company |
|---|---|---|
| Receivables turnover | An activity ratio equal to revenue divided by receivables. | RH receivables turnover ratio improved from 2021 to 2022 but then slightly deteriorated from 2022 to 2023. |
Payables Turnover
RH, payables turnover calculation, comparison to benchmarks
| Jan 28, 2023 | Jan 29, 2022 | Jan 30, 2021 | Feb 1, 2020 | Feb 2, 2019 | Feb 3, 2018 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||
| Cost of goods sold | 1,778,492) | 1,903,409) | 1,523,095) | 1,552,426) | 1,504,806) | 1,591,107) | |
| Accounts payable | 166,082) | 242,035) | 224,906) | 180,714) | 183,039) | 195,313) | |
| Short-term Activity Ratio | |||||||
| Payables turnover1 | 10.71 | 7.86 | 6.77 | 8.59 | 8.22 | 8.15 | |
| Benchmarks | |||||||
| Payables Turnover, Competitors2 | |||||||
| Amazon.com Inc. | 3.59 | 3.63 | 3.46 | 3.22 | 3.51 | — | |
| GameStop Corp. | 8.57 | 9.90 | 11.21 | 11.97 | 5.68 | — | |
| Home Depot Inc. | 9.14 | 7.45 | 7.52 | 9.33 | 9.16 | — | |
| Lowe’s Cos. Inc. | 6.16 | 5.65 | 5.51 | 6.42 | 5.85 | — | |
| TJX Cos. Inc. | 9.53 | 7.77 | 5.09 | 11.17 | 10.53 | — | |
| Payables Turnover, Sector | |||||||
| Consumer Discretionary Distribution & Retail | 4.63 | 4.51 | 4.21 | 4.28 | 4.76 | — | |
| Payables Turnover, Industry | |||||||
| Consumer Discretionary | 5.19 | 4.82 | 4.67 | 4.75 | 5.51 | — | |
Based on: 10-K (reporting date: 2023-01-28), 10-K (reporting date: 2022-01-29), 10-K (reporting date: 2021-01-30), 10-K (reporting date: 2020-02-01), 10-K (reporting date: 2019-02-02), 10-K (reporting date: 2018-02-03).
1 2023 Calculation
Payables turnover = Cost of goods sold ÷ Accounts payable
= 1,778,492 ÷ 166,082 = 10.71
2 Click competitor name to see calculations.
| Short-term activity ratio | Description | The company |
|---|---|---|
| Payables turnover | An activity ratio calculated as cost of goods sold divided by payables. | RH payables turnover ratio increased from 2021 to 2022 and from 2022 to 2023. |
Working Capital Turnover
RH, working capital turnover calculation, comparison to benchmarks
| Jan 28, 2023 | Jan 29, 2022 | Jan 30, 2021 | Feb 1, 2020 | Feb 2, 2019 | Feb 3, 2018 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||
| Current assets | 2,512,664) | 3,091,442) | 801,484) | 596,952) | 682,693) | 644,930) | |
| Less: Current liabilities | 885,973) | 1,063,758) | 921,632) | 982,912) | 918,172) | 519,335) | |
| Working capital | 1,626,691) | 2,027,684) | (120,148) | (385,960) | (235,479) | 125,595) | |
| Net revenues | 3,590,477) | 3,758,820) | 2,848,626) | 2,647,437) | 2,505,653) | 2,440,174) | |
| Short-term Activity Ratio | |||||||
| Working capital turnover1 | 2.21 | 1.85 | — | — | — | 19.43 | |
| Benchmarks | |||||||
| Working Capital Turnover, Competitors2 | |||||||
| Amazon.com Inc. | 77.32 | — | 24.33 | 60.82 | 32.92 | — | |
| GameStop Corp. | 6.02 | 4.83 | 24.41 | 16.33 | 8.75 | — | |
| Home Depot Inc. | 16.81 | 417.56 | 24.87 | 76.81 | 59.68 | — | |
| Lowe’s Cos. Inc. | 50.26 | 245.54 | 24.92 | 530.50 | — | — | |
| TJX Cos. Inc. | 23.22 | 17.40 | 6.51 | 23.97 | 13.27 | — | |
| Working Capital Turnover, Sector | |||||||
| Consumer Discretionary Distribution & Retail | 40.49 | — | 21.84 | 61.32 | 36.36 | — | |
| Working Capital Turnover, Industry | |||||||
| Consumer Discretionary | 14.90 | 18.33 | 11.04 | 13.70 | 25.44 | — | |
Based on: 10-K (reporting date: 2023-01-28), 10-K (reporting date: 2022-01-29), 10-K (reporting date: 2021-01-30), 10-K (reporting date: 2020-02-01), 10-K (reporting date: 2019-02-02), 10-K (reporting date: 2018-02-03).
1 2023 Calculation
Working capital turnover = Net revenues ÷ Working capital
= 3,590,477 ÷ 1,626,691 = 2.21
2 Click competitor name to see calculations.
Average Inventory Processing Period
RH, average inventory processing period calculation, comparison to benchmarks
| Jan 28, 2023 | Jan 29, 2022 | Jan 30, 2021 | Feb 1, 2020 | Feb 2, 2019 | Feb 3, 2018 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data | |||||||
| Inventory turnover | 2.22 | 2.59 | 2.80 | 3.54 | 2.83 | 3.02 | |
| Short-term Activity Ratio (no. days) | |||||||
| Average inventory processing period1 | 165 | 141 | 130 | 103 | 129 | 121 | |
| Benchmarks (no. days) | |||||||
| Average Inventory Processing Period, Competitors2 | |||||||
| Amazon.com Inc. | 40 | 43 | 44 | 37 | 45 | — | |
| GameStop Corp. | 55 | 72 | 57 | 69 | 76 | — | |
| Home Depot Inc. | 87 | 80 | 70 | 73 | 72 | — | |
| Lowe’s Cos. Inc. | 104 | 100 | 98 | 98 | 95 | — | |
| TJX Cos. Inc. | 59 | 63 | 65 | 60 | 60 | — | |
| Average Inventory Processing Period, Sector | |||||||
| Consumer Discretionary Distribution & Retail | 59 | 60 | 57 | 54 | 60 | — | |
| Average Inventory Processing Period, Industry | |||||||
| Consumer Discretionary | 52 | 55 | 52 | 49 | 48 | — | |
Based on: 10-K (reporting date: 2023-01-28), 10-K (reporting date: 2022-01-29), 10-K (reporting date: 2021-01-30), 10-K (reporting date: 2020-02-01), 10-K (reporting date: 2019-02-02), 10-K (reporting date: 2018-02-03).
1 2023 Calculation
Average inventory processing period = 365 ÷ Inventory turnover
= 365 ÷ 2.22 = 165
2 Click competitor name to see calculations.
| Short-term activity ratio | Description | The company |
|---|---|---|
| Average inventory processing period | An activity ratio equal to the number of days in the period divided by inventory turnover over the period. | RH number of days of inventory outstanding deteriorated from 2021 to 2022 and from 2022 to 2023. |
Average Receivable Collection Period
RH, average receivable collection period calculation, comparison to benchmarks
| Jan 28, 2023 | Jan 29, 2022 | Jan 30, 2021 | Feb 1, 2020 | Feb 2, 2019 | Feb 3, 2018 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data | |||||||
| Receivables turnover | 60.08 | 64.90 | 47.90 | 54.05 | 62.29 | 77.68 | |
| Short-term Activity Ratio (no. days) | |||||||
| Average receivable collection period1 | 6 | 6 | 8 | 7 | 6 | 5 | |
| Benchmarks (no. days) | |||||||
| Average Receivable Collection Period, Competitors2 | |||||||
| Amazon.com Inc. | 22 | 19 | 16 | 14 | 16 | — | |
| GameStop Corp. | 9 | 9 | 8 | 8 | 6 | — | |
| Home Depot Inc. | 8 | 8 | 8 | 7 | 7 | — | |
| Lowe’s Cos. Inc. | — | — | — | — | — | — | |
| TJX Cos. Inc. | 4 | 4 | 5 | 3 | 3 | — | |
| Average Receivable Collection Period, Sector | |||||||
| Consumer Discretionary Distribution & Retail | 16 | 14 | 12 | 10 | 11 | — | |
| Average Receivable Collection Period, Industry | |||||||
| Consumer Discretionary | 20 | 20 | 17 | 17 | 17 | — | |
Based on: 10-K (reporting date: 2023-01-28), 10-K (reporting date: 2022-01-29), 10-K (reporting date: 2021-01-30), 10-K (reporting date: 2020-02-01), 10-K (reporting date: 2019-02-02), 10-K (reporting date: 2018-02-03).
1 2023 Calculation
Average receivable collection period = 365 ÷ Receivables turnover
= 365 ÷ 60.08 = 6
2 Click competitor name to see calculations.
| Short-term activity ratio | Description | The company |
|---|---|---|
| Average receivable collection period | An activity ratio equal to the number of days in the period divided by receivables turnover. |
Operating Cycle
RH, operating cycle calculation, comparison to benchmarks
No. days
| Jan 28, 2023 | Jan 29, 2022 | Jan 30, 2021 | Feb 1, 2020 | Feb 2, 2019 | Feb 3, 2018 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data | |||||||
| Average inventory processing period | 165 | 141 | 130 | 103 | 129 | 121 | |
| Average receivable collection period | 6 | 6 | 8 | 7 | 6 | 5 | |
| Short-term Activity Ratio | |||||||
| Operating cycle1 | 171 | 147 | 138 | 110 | 135 | 126 | |
| Benchmarks | |||||||
| Operating Cycle, Competitors2 | |||||||
| Amazon.com Inc. | 62 | 62 | 60 | 51 | 61 | — | |
| GameStop Corp. | 64 | 81 | 65 | 77 | 82 | — | |
| Home Depot Inc. | 95 | 88 | 78 | 80 | 79 | — | |
| Lowe’s Cos. Inc. | — | — | — | — | — | — | |
| TJX Cos. Inc. | 63 | 67 | 70 | 63 | 63 | — | |
| Operating Cycle, Sector | |||||||
| Consumer Discretionary Distribution & Retail | 75 | 74 | 69 | 64 | 71 | — | |
| Operating Cycle, Industry | |||||||
| Consumer Discretionary | 72 | 75 | 69 | 66 | 65 | — | |
Based on: 10-K (reporting date: 2023-01-28), 10-K (reporting date: 2022-01-29), 10-K (reporting date: 2021-01-30), 10-K (reporting date: 2020-02-01), 10-K (reporting date: 2019-02-02), 10-K (reporting date: 2018-02-03).
1 2023 Calculation
Operating cycle = Average inventory processing period + Average receivable collection period
= 165 + 6 = 171
2 Click competitor name to see calculations.
| Short-term activity ratio | Description | The company |
|---|---|---|
| Operating cycle | Equal to average inventory processing period plus average receivables collection period. | RH operating cycle deteriorated from 2021 to 2022 and from 2022 to 2023. |
Average Payables Payment Period
RH, average payables payment period calculation, comparison to benchmarks
| Jan 28, 2023 | Jan 29, 2022 | Jan 30, 2021 | Feb 1, 2020 | Feb 2, 2019 | Feb 3, 2018 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data | |||||||
| Payables turnover | 10.71 | 7.86 | 6.77 | 8.59 | 8.22 | 8.15 | |
| Short-term Activity Ratio (no. days) | |||||||
| Average payables payment period1 | 34 | 46 | 54 | 42 | 44 | 45 | |
| Benchmarks (no. days) | |||||||
| Average Payables Payment Period, Competitors2 | |||||||
| Amazon.com Inc. | 102 | 101 | 105 | 113 | 104 | — | |
| GameStop Corp. | 43 | 37 | 33 | 30 | 64 | — | |
| Home Depot Inc. | 40 | 49 | 49 | 39 | 40 | — | |
| Lowe’s Cos. Inc. | 59 | 65 | 66 | 57 | 62 | — | |
| TJX Cos. Inc. | 38 | 47 | 72 | 33 | 35 | — | |
| Average Payables Payment Period, Sector | |||||||
| Consumer Discretionary Distribution & Retail | 79 | 81 | 87 | 85 | 77 | — | |
| Average Payables Payment Period, Industry | |||||||
| Consumer Discretionary | 70 | 76 | 78 | 77 | 66 | — | |
Based on: 10-K (reporting date: 2023-01-28), 10-K (reporting date: 2022-01-29), 10-K (reporting date: 2021-01-30), 10-K (reporting date: 2020-02-01), 10-K (reporting date: 2019-02-02), 10-K (reporting date: 2018-02-03).
1 2023 Calculation
Average payables payment period = 365 ÷ Payables turnover
= 365 ÷ 10.71 = 34
2 Click competitor name to see calculations.
| Short-term activity ratio | Description | The company |
|---|---|---|
| Average payables payment period | An estimate of the average number of days it takes a company to pay its suppliers; equal to the number of days in the period divided by payables turnover ratio for the period. | RH number of days of payables outstanding decreased from 2021 to 2022 and from 2022 to 2023. |
Cash Conversion Cycle
RH, cash conversion cycle calculation, comparison to benchmarks
No. days
| Jan 28, 2023 | Jan 29, 2022 | Jan 30, 2021 | Feb 1, 2020 | Feb 2, 2019 | Feb 3, 2018 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data | |||||||
| Average inventory processing period | 165 | 141 | 130 | 103 | 129 | 121 | |
| Average receivable collection period | 6 | 6 | 8 | 7 | 6 | 5 | |
| Average payables payment period | 34 | 46 | 54 | 42 | 44 | 45 | |
| Short-term Activity Ratio | |||||||
| Cash conversion cycle1 | 137 | 101 | 84 | 68 | 91 | 81 | |
| Benchmarks | |||||||
| Cash Conversion Cycle, Competitors2 | |||||||
| Amazon.com Inc. | -40 | -39 | -45 | -62 | -43 | — | |
| GameStop Corp. | 21 | 44 | 32 | 47 | 18 | — | |
| Home Depot Inc. | 55 | 39 | 29 | 41 | 39 | — | |
| Lowe’s Cos. Inc. | — | — | — | — | — | — | |
| TJX Cos. Inc. | 25 | 20 | -2 | 30 | 28 | — | |
| Cash Conversion Cycle, Sector | |||||||
| Consumer Discretionary Distribution & Retail | -4 | -7 | -18 | -21 | -6 | — | |
| Cash Conversion Cycle, Industry | |||||||
| Consumer Discretionary | 2 | -1 | -9 | -11 | -1 | — | |
Based on: 10-K (reporting date: 2023-01-28), 10-K (reporting date: 2022-01-29), 10-K (reporting date: 2021-01-30), 10-K (reporting date: 2020-02-01), 10-K (reporting date: 2019-02-02), 10-K (reporting date: 2018-02-03).
1 2023 Calculation
Cash conversion cycle = Average inventory processing period + Average receivable collection period – Average payables payment period
= 165 + 6 – 34 = 137
2 Click competitor name to see calculations.
| Short-term activity ratio | Description | The company |
|---|---|---|
| Cash conversion cycle | A financial metric that measures the length of time required for a company to convert cash invested in its operations to cash received as a result of its operations; equal to average inventory processing period plus average receivables collection period minus average payables payment period. | RH cash conversion cycle deteriorated from 2021 to 2022 and from 2022 to 2023. |