Activity ratios measure how efficiently a company performs day-to-day tasks, such us the collection of receivables and management of inventory.
Ratios (Summary)
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Target Corp., short-term (operating) activity ratios
Source: Based on data from Target Corp. Annual Reports
| Ratio |
Description |
The company |
| Inventory turnover |
An activity ratio calculated as revenue divided by inventory. |
Target Corp.'s inventory turnover deteriorated from 2009 to 2010 and from 2010 to 2011.
|
| Receivables turnover |
An activity ratio equal to revenue divided by receivables. |
Target Corp.'s receivables turnover improved from 2009 to 2010 and from 2010 to 2011.
|
| Payables turnover |
An activity ratio calculated as revenue divided by payables. |
Target Corp.'s payables turnover declined from 2009 to 2010 but then increased from 2010 to 2011 not reaching 2009 level.
|
| Working capital turnover |
An activity ratio calculated as revenue divided by working capital. |
Target Corp.'s working capital turnover improved from 2009 to 2010 and from 2010 to 2011.
|
| Average inventory processing period |
An activity ratio equal to the number of days in the period divided by inventory turnover over the period. |
Target Corp.'s average inventory processing period deteriorated from 2009 to 2010 and from 2010 to 2011.
|
| Average receivable collection period |
An activity ratio equal to the number of days in the period divided by receivables turnoverd. |
Target Corp.'s average receivable collection period improved from 2009 to 2010 and from 2010 to 2011.
|
| Operating cycle |
Equal to average inventory processing period plus average receivables collection period. |
Target Corp.'s operating cycle improved from 2009 to 2010 and from 2010 to 2011.
|
| 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. |
Target Corp.'s average payables payment period increased from 2009 to 2010 but then slightly declined from 2010 to 2011 not reaching 2009 level.
|
| 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. |
Target Corp.'s cash conversion cycle improved from 2009 to 2010 and from 2010 to 2011.
|
Inventory Turnover
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Source: Based on data from Target Corp. Annual Reports
2011 Calculations
| Ratio |
Description |
The company |
| Inventory turnover |
An activity ratio calculated as revenue divided by inventory. |
Target Corp.'s inventory turnover deteriorated from 2009 to 2010 and from 2010 to 2011.
|
Receivables Turnover
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Source: Based on data from Target Corp. Annual Reports
2011 Calculations
| Ratio |
Description |
The company |
| Receivables turnover |
An activity ratio equal to revenue divided by receivables. |
Target Corp.'s receivables turnover improved from 2009 to 2010 and from 2010 to 2011.
|
Payables Turnover
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Source: Based on data from Target Corp. Annual Reports
2011 Calculations
| Ratio |
Description |
The company |
| Payables turnover |
An activity ratio calculated as revenue divided by payables. |
Target Corp.'s payables turnover declined from 2009 to 2010 but then increased from 2010 to 2011 not reaching 2009 level.
|
Working Capital Turnover
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Source: Based on data from Target Corp. Annual Reports
2011 Calculations
| Ratio |
Description |
The company |
| Working capital turnover |
An activity ratio calculated as revenue divided by working capital. |
Target Corp.'s working capital turnover improved from 2009 to 2010 and from 2010 to 2011.
|
Average Inventory Processing Period
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Source: Based on data from Target Corp. Annual Reports
2011 Calculations
1 Average inventory processing period = 365 ÷ Inventory turnover
= 365 ÷ =
| 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. |
Target Corp.'s average inventory processing period deteriorated from 2009 to 2010 and from 2010 to 2011.
|
Average Receivable Collection Period
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Source: Based on data from Target Corp. Annual Reports
2011 Calculations
1 Average receivable collection period = 365 ÷ Receivables turnover
= 365 ÷ =
| Ratio |
Description |
The company |
| Average receivable collection period |
An activity ratio equal to the number of days in the period divided by receivables turnoverd. |
Target Corp.'s average receivable collection period improved from 2009 to 2010 and from 2010 to 2011.
|
Operating Cycle
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Source: Based on data from Target Corp. Annual Reports
2011 Calculations
| Ratio |
Description |
The company |
| Operating cycle |
Equal to average inventory processing period plus average receivables collection period. |
Target Corp.'s operating cycle improved from 2009 to 2010 and from 2010 to 2011.
|
Average Payables Payment Period
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Source: Based on data from Target Corp. Annual Reports
2011 Calculations
1 Average payables payment period = 365 ÷ Payables turnover
= 365 ÷ =
| 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. |
Target Corp.'s average payables payment period increased from 2009 to 2010 but then slightly declined from 2010 to 2011 not reaching 2009 level.
|
Cash Conversion Cycle
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Source: Based on data from Target Corp. Annual Reports
2011 Calculations
| 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. |
Target Corp.'s cash conversion cycle improved from 2009 to 2010 and from 2010 to 2011.
|
