Activity ratios measure how efficiently a company performs day-to-day tasks, such us the collection of receivables and management of inventory.
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Short-term Activity Ratios (Summary)
Based on: 10-Q (reporting date: 2023-11-18), 10-K (reporting date: 2023-08-26), 10-Q (reporting date: 2023-05-06), 10-Q (reporting date: 2023-02-11), 10-Q (reporting date: 2022-11-19), 10-K (reporting date: 2022-08-27), 10-Q (reporting date: 2022-05-07), 10-Q (reporting date: 2022-02-12), 10-Q (reporting date: 2021-11-20), 10-K (reporting date: 2021-08-28), 10-Q (reporting date: 2021-05-08), 10-Q (reporting date: 2021-02-13), 10-Q (reporting date: 2020-11-21), 10-K (reporting date: 2020-08-29), 10-Q (reporting date: 2020-05-09), 10-Q (reporting date: 2020-02-15), 10-Q (reporting date: 2019-11-23), 10-K (reporting date: 2019-08-31), 10-Q (reporting date: 2019-05-04), 10-Q (reporting date: 2019-02-09), 10-Q (reporting date: 2018-11-17), 10-K (reporting date: 2018-08-25), 10-Q (reporting date: 2018-05-05), 10-Q (reporting date: 2018-02-10), 10-Q (reporting date: 2017-11-18).
- Inventory Turnover
- The inventory turnover ratio demonstrates a generally stable to modestly improving trend over the observed periods. After initial values near or slightly above 1.2, the ratio increased gradually, reaching a peak around 1.51 in early 2022 before experiencing a slight decline to approximately 1.45 by late 2023. This pattern indicates an overall gradual improvement in inventory management efficiency with some fluctuations.
- Receivables Turnover
- Receivables turnover shows noticeable fluctuations across the periods without a clear upward or downward trend. Starting in the mid-30s to low 40s, the ratio experiences dips and rebounds, peaking over 45 in late 2019 and then falling back to the low 30s by early 2023. This volatility suggests varying effectiveness in collecting receivables, with some periods demonstrating stronger collection performance than others.
- Payables Turnover
- Payables turnover remains relatively stable with minor oscillations around 1.1 to 1.2 throughout the periods. A slight decline is observed toward the end of the timeline, from about 1.16 down to roughly 1.07 at one point, followed by a modest recovery. This stability implies consistent payment behavior to suppliers with some short-term variations.
- Working Capital Turnover
- Data for working capital turnover is limited to a few periods around early 2020, showing a marked increase from 23.89 to 34.18. The spike indicates a temporary improvement in the efficiency of using working capital to support sales, though lack of additional data prevents a robust trend analysis.
- Average Inventory Processing Period (Days)
- The average inventory processing period shows an overall decreasing trend from around 300 days toward the higher 250s by late 2023. There is a significant reduction observed from mid-2021 onward, indicating faster inventory turnover and potentially more efficient inventory management practices implemented during this time frame.
- Average Receivable Collection Period (Days)
- This metric remains fairly stable, fluctuating narrowly between 8 and 11 days. The consistency suggests steady efficiency in receivable collections over the entire timeframe, without substantial improvements or deteriorations.
- Operating Cycle (Days)
- The operating cycle mirrors the inventory and receivables trends, with days ranging approximately from 282 to 310 initially, then decreasing steadily after 2020 to near 260 days by late 2023. The shortening of the operating cycle signals improved operational efficiency by reducing the time it takes to convert inventory and receivables back into cash.
- Average Payables Payment Period (Days)
- There is an observed increase in the payables payment period from about 307 days toward a peak of 343 days around early 2022, followed by a gradual decline back to approximately 313 days by the end of 2023. The extended payment period indicates that the company was taking longer to pay its suppliers during this period, potentially improving cash flow, with a partial normalization thereafter.
- Cash Conversion Cycle (Days)
- The cash conversion cycle remains negative throughout all recorded periods, indicating that the company manages to collect cash from its operations before settling its payables. Over time, this metric becomes more negative, reaching its lowest at around -68 days in early 2023, then slightly rebounding toward -50 days at the end of 2023. A more negative cash conversion cycle implies enhanced liquidity and operational efficiency.
Turnover Ratios
Average No. Days
Inventory Turnover
Nov 18, 2023 | Aug 26, 2023 | May 6, 2023 | Feb 11, 2023 | Nov 19, 2022 | Aug 27, 2022 | May 7, 2022 | Feb 12, 2022 | Nov 20, 2021 | Aug 28, 2021 | May 8, 2021 | Feb 13, 2021 | Nov 21, 2020 | Aug 29, 2020 | May 9, 2020 | Feb 15, 2020 | Nov 23, 2019 | Aug 31, 2019 | May 4, 2019 | Feb 9, 2019 | Nov 17, 2018 | Aug 25, 2018 | May 5, 2018 | Feb 10, 2018 | Nov 18, 2017 | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Selected Financial Data (US$ in thousands) | |||||||||||||||||||||||||||||||||
Cost of sales, including warehouse and delivery expenses | |||||||||||||||||||||||||||||||||
Merchandise inventories | |||||||||||||||||||||||||||||||||
Short-term Activity Ratio | |||||||||||||||||||||||||||||||||
Inventory turnover1 | |||||||||||||||||||||||||||||||||
Benchmarks | |||||||||||||||||||||||||||||||||
Inventory Turnover, Competitors2 | |||||||||||||||||||||||||||||||||
Amazon.com Inc. | |||||||||||||||||||||||||||||||||
Home Depot Inc. | |||||||||||||||||||||||||||||||||
Lowe’s Cos. Inc. | |||||||||||||||||||||||||||||||||
TJX Cos. Inc. |
Based on: 10-Q (reporting date: 2023-11-18), 10-K (reporting date: 2023-08-26), 10-Q (reporting date: 2023-05-06), 10-Q (reporting date: 2023-02-11), 10-Q (reporting date: 2022-11-19), 10-K (reporting date: 2022-08-27), 10-Q (reporting date: 2022-05-07), 10-Q (reporting date: 2022-02-12), 10-Q (reporting date: 2021-11-20), 10-K (reporting date: 2021-08-28), 10-Q (reporting date: 2021-05-08), 10-Q (reporting date: 2021-02-13), 10-Q (reporting date: 2020-11-21), 10-K (reporting date: 2020-08-29), 10-Q (reporting date: 2020-05-09), 10-Q (reporting date: 2020-02-15), 10-Q (reporting date: 2019-11-23), 10-K (reporting date: 2019-08-31), 10-Q (reporting date: 2019-05-04), 10-Q (reporting date: 2019-02-09), 10-Q (reporting date: 2018-11-17), 10-K (reporting date: 2018-08-25), 10-Q (reporting date: 2018-05-05), 10-Q (reporting date: 2018-02-10), 10-Q (reporting date: 2017-11-18).
1 Q1 2024 Calculation
Inventory turnover
= (Cost of sales, including warehouse and delivery expensesQ1 2024
+ Cost of sales, including warehouse and delivery expensesQ4 2023
+ Cost of sales, including warehouse and delivery expensesQ3 2023
+ Cost of sales, including warehouse and delivery expensesQ2 2023)
÷ Merchandise inventories
= ( + + + )
÷ =
2 Click competitor name to see calculations.
- Cost of Sales, Including Warehouse and Delivery Expenses
- The cost of sales exhibits a recurring pattern of quarterly fluctuations over the analyzed periods. Initial figures ranged around 1.1 to 1.6 million USD in thousands but increased notably in the latter years. Starting from late 2019, a clear upward trend is observed, with peaks reaching approximately 2.6 million USD in late 2022 and near 2.7 million USD in mid-to-late 2023. This suggests increased operational expenses or sales volume growth in recent years. Periodic increases typically occur in the third and fourth quarters, indicating possible seasonality effects.
- Merchandise Inventories
- Inventory levels demonstrate a steady upward trajectory throughout the entire period. Beginning at around 4 million USD in late 2017, inventory values rose consistently year over year, reaching roughly 5.7 million USD by late 2023. This sustained increase reflects a build-up of stock, possibly in response to higher demand expectations or strategic inventory positioning. No significant drops are visible, indicating effective stock maintenance despite cost fluctuations.
- Inventory Turnover Ratio
- The inventory turnover ratio starts from about 1.33 in early periods and shows a gradual improvement over time, increasing to approximately 1.45 by the end of the data series. This enhancement indicates that inventory is being sold and replenished more frequently, pointing toward improved efficiency in inventory management. Although some minor short-term variations occur, the overall trend is upward, reflecting positively on operational effectiveness.
Receivables Turnover
Nov 18, 2023 | Aug 26, 2023 | May 6, 2023 | Feb 11, 2023 | Nov 19, 2022 | Aug 27, 2022 | May 7, 2022 | Feb 12, 2022 | Nov 20, 2021 | Aug 28, 2021 | May 8, 2021 | Feb 13, 2021 | Nov 21, 2020 | Aug 29, 2020 | May 9, 2020 | Feb 15, 2020 | Nov 23, 2019 | Aug 31, 2019 | May 4, 2019 | Feb 9, 2019 | Nov 17, 2018 | Aug 25, 2018 | May 5, 2018 | Feb 10, 2018 | Nov 18, 2017 | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Selected Financial Data (US$ in thousands) | |||||||||||||||||||||||||||||||||
Net sales | |||||||||||||||||||||||||||||||||
Accounts receivable | |||||||||||||||||||||||||||||||||
Short-term Activity Ratio | |||||||||||||||||||||||||||||||||
Receivables turnover1 | |||||||||||||||||||||||||||||||||
Benchmarks | |||||||||||||||||||||||||||||||||
Receivables Turnover, Competitors2 | |||||||||||||||||||||||||||||||||
Home Depot Inc. | |||||||||||||||||||||||||||||||||
TJX Cos. Inc. |
Based on: 10-Q (reporting date: 2023-11-18), 10-K (reporting date: 2023-08-26), 10-Q (reporting date: 2023-05-06), 10-Q (reporting date: 2023-02-11), 10-Q (reporting date: 2022-11-19), 10-K (reporting date: 2022-08-27), 10-Q (reporting date: 2022-05-07), 10-Q (reporting date: 2022-02-12), 10-Q (reporting date: 2021-11-20), 10-K (reporting date: 2021-08-28), 10-Q (reporting date: 2021-05-08), 10-Q (reporting date: 2021-02-13), 10-Q (reporting date: 2020-11-21), 10-K (reporting date: 2020-08-29), 10-Q (reporting date: 2020-05-09), 10-Q (reporting date: 2020-02-15), 10-Q (reporting date: 2019-11-23), 10-K (reporting date: 2019-08-31), 10-Q (reporting date: 2019-05-04), 10-Q (reporting date: 2019-02-09), 10-Q (reporting date: 2018-11-17), 10-K (reporting date: 2018-08-25), 10-Q (reporting date: 2018-05-05), 10-Q (reporting date: 2018-02-10), 10-Q (reporting date: 2017-11-18).
1 Q1 2024 Calculation
Receivables turnover
= (Net salesQ1 2024
+ Net salesQ4 2023
+ Net salesQ3 2023
+ Net salesQ2 2023)
÷ Accounts receivable
= ( + + + )
÷ =
2 Click competitor name to see calculations.
The quarterly financial data reveals several key trends and patterns over the examined periods. Net sales exhibit a consistent seasonal fluctuation with pronounced peaks typically observed in the third and fourth quarters of each fiscal year. This seasonal pattern is evidenced by sharp increases in net sales during August to November quarters, suggesting strong consumer demand or promotional activity during these months.
Despite seasonal volatility, net sales demonstrate a general upward trend over the multi-year span. Comparing the initial periods to the most recent, net sales have increased significantly, indicating successful revenue growth. For example, net sales rose from approximately 2.59 billion US dollars in November 2017 to over 4.19 billion US dollars in November 2023. This growth trajectory reflects an expanding market presence or enhanced sales capabilities.
Accounts receivable figures also fluctuate seasonally but tend to increase in absolute terms over time. The balances rise more noticeably in later periods, reaching peaks that coincide closely with higher net sales quarters. This relationship indicates that as sales increase, accounts receivable balances also grow, consistent with credit sales activity. The largest receivable balances occur in the latter years, with values surpassing 500 million US dollars in some recent quarters, pointing toward an increasing volume of customer credit or slower collection cycles.
The receivables turnover ratio shows variation across the periods, reflecting periodic changes in the efficiency of collections relative to sales. Early in the series, turnover ratios were generally higher, indicating quicker collection of receivables. Over time, however, the turnover ratio exhibits a declining trend, with some fluctuations, and lower values in recent quarters. A decreasing receivables turnover ratio suggests that the company may be taking longer to collect its receivables, potentially increasing credit risk or indicating relaxed credit terms.
In summary, the data demonstrates robust growth in net sales accompanied by rising accounts receivable balances, with seasonal patterns prominently influencing both. The pending implication of the gradually decreasing receivables turnover ratio warrants attention, as it may impact cash flow and working capital management efficiency.
- Net Sales
- Shows a clear seasonal pattern with peaks in August to November quarters, alongside a strong upward trend from approximately 2.6 billion to over 4.1 billion US dollars between 2017 and 2023.
- Accounts Receivable
- Increases in line with net sales trends, reaching values above 500 million US dollars in recent quarters, indicating higher credit sales or slower collection periods.
- Receivables Turnover Ratio
- Displays a downward trend over the periods, decreasing from higher values above 40 to mid-30s range, implying a lengthening of the collection cycle or changes in credit policies.
Payables Turnover
Nov 18, 2023 | Aug 26, 2023 | May 6, 2023 | Feb 11, 2023 | Nov 19, 2022 | Aug 27, 2022 | May 7, 2022 | Feb 12, 2022 | Nov 20, 2021 | Aug 28, 2021 | May 8, 2021 | Feb 13, 2021 | Nov 21, 2020 | Aug 29, 2020 | May 9, 2020 | Feb 15, 2020 | Nov 23, 2019 | Aug 31, 2019 | May 4, 2019 | Feb 9, 2019 | Nov 17, 2018 | Aug 25, 2018 | May 5, 2018 | Feb 10, 2018 | Nov 18, 2017 | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Selected Financial Data (US$ in thousands) | |||||||||||||||||||||||||||||||||
Cost of sales, including warehouse and delivery expenses | |||||||||||||||||||||||||||||||||
Accounts payable | |||||||||||||||||||||||||||||||||
Short-term Activity Ratio | |||||||||||||||||||||||||||||||||
Payables turnover1 | |||||||||||||||||||||||||||||||||
Benchmarks | |||||||||||||||||||||||||||||||||
Payables Turnover, Competitors2 | |||||||||||||||||||||||||||||||||
Amazon.com Inc. | |||||||||||||||||||||||||||||||||
Home Depot Inc. | |||||||||||||||||||||||||||||||||
Lowe’s Cos. Inc. | |||||||||||||||||||||||||||||||||
TJX Cos. Inc. |
Based on: 10-Q (reporting date: 2023-11-18), 10-K (reporting date: 2023-08-26), 10-Q (reporting date: 2023-05-06), 10-Q (reporting date: 2023-02-11), 10-Q (reporting date: 2022-11-19), 10-K (reporting date: 2022-08-27), 10-Q (reporting date: 2022-05-07), 10-Q (reporting date: 2022-02-12), 10-Q (reporting date: 2021-11-20), 10-K (reporting date: 2021-08-28), 10-Q (reporting date: 2021-05-08), 10-Q (reporting date: 2021-02-13), 10-Q (reporting date: 2020-11-21), 10-K (reporting date: 2020-08-29), 10-Q (reporting date: 2020-05-09), 10-Q (reporting date: 2020-02-15), 10-Q (reporting date: 2019-11-23), 10-K (reporting date: 2019-08-31), 10-Q (reporting date: 2019-05-04), 10-Q (reporting date: 2019-02-09), 10-Q (reporting date: 2018-11-17), 10-K (reporting date: 2018-08-25), 10-Q (reporting date: 2018-05-05), 10-Q (reporting date: 2018-02-10), 10-Q (reporting date: 2017-11-18).
1 Q1 2024 Calculation
Payables turnover
= (Cost of sales, including warehouse and delivery expensesQ1 2024
+ Cost of sales, including warehouse and delivery expensesQ4 2023
+ Cost of sales, including warehouse and delivery expensesQ3 2023
+ Cost of sales, including warehouse and delivery expensesQ2 2023)
÷ Accounts payable
= ( + + + )
÷ =
2 Click competitor name to see calculations.
- Cost of Sales, Including Warehouse and Delivery Expenses
- Over the analyzed periods, the cost of sales exhibited a clear seasonal pattern with notable peaks typically occurring in the third quarter of each fiscal year. These peaks ranged from approximately 1.65 billion to 2.59 billion US dollars, highlighting periods of increased activity or demand. Between these peaks, the values generally declined during the first quarter of the year, falling to levels near or below 1.3 billion US dollars. Overall, there has been a trend of increasing peaks and higher troughs over time, indicating growth in the scale of operations and expense volume.
- Accounts Payable
- Accounts payable showed an upward trend throughout the time frame, steadily increasing from around 4.3 billion US dollars in late 2017 to peaks surpassing 7.3 billion US dollars by early 2023. This growth was consistent, suggesting an expansion in the company's credit purchases or supplier financing. The incremental rises were mostly gradual with no significant declines, reflecting either increased buying or extended payment terms.
- Payables Turnover Ratio
- The payables turnover ratio displayed relatively stable levels across the periods, fluctuating in a narrow range between approximately 1.07 and 1.19. Early in the data there was a slight downward trend from 1.19 down to about 1.07, followed by a partial recovery back towards 1.17 in the most recent quarters. This stability suggests that the company's efficiency in managing payables remained consistent, with minor variations that could reflect seasonal payment behaviors or changes in supplier relationships.
- Key Insights
- The combination of rising accounts payable and increasing cost of sales points to growth in business scale or inventory acquisition. The seasonal peaks in cost of sales aligning with periods of high payable balances indicate planned operational cycles. Stable payables turnover ratios imply maintained control over payment terms and supplier financing despite the growth in absolute amounts. Together, these trends suggest the company has experienced steady expansion while preserving consistent credit management practices.
Working Capital Turnover
Nov 18, 2023 | Aug 26, 2023 | May 6, 2023 | Feb 11, 2023 | Nov 19, 2022 | Aug 27, 2022 | May 7, 2022 | Feb 12, 2022 | Nov 20, 2021 | Aug 28, 2021 | May 8, 2021 | Feb 13, 2021 | Nov 21, 2020 | Aug 29, 2020 | May 9, 2020 | Feb 15, 2020 | Nov 23, 2019 | Aug 31, 2019 | May 4, 2019 | Feb 9, 2019 | Nov 17, 2018 | Aug 25, 2018 | May 5, 2018 | Feb 10, 2018 | Nov 18, 2017 | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Selected Financial Data (US$ in thousands) | |||||||||||||||||||||||||||||||||
Current assets | |||||||||||||||||||||||||||||||||
Less: Current liabilities | |||||||||||||||||||||||||||||||||
Working capital | |||||||||||||||||||||||||||||||||
Net sales | |||||||||||||||||||||||||||||||||
Short-term Activity Ratio | |||||||||||||||||||||||||||||||||
Working capital turnover1 | |||||||||||||||||||||||||||||||||
Benchmarks | |||||||||||||||||||||||||||||||||
Working Capital Turnover, Competitors2 | |||||||||||||||||||||||||||||||||
Amazon.com Inc. | |||||||||||||||||||||||||||||||||
Home Depot Inc. | |||||||||||||||||||||||||||||||||
Lowe’s Cos. Inc. | |||||||||||||||||||||||||||||||||
TJX Cos. Inc. |
Based on: 10-Q (reporting date: 2023-11-18), 10-K (reporting date: 2023-08-26), 10-Q (reporting date: 2023-05-06), 10-Q (reporting date: 2023-02-11), 10-Q (reporting date: 2022-11-19), 10-K (reporting date: 2022-08-27), 10-Q (reporting date: 2022-05-07), 10-Q (reporting date: 2022-02-12), 10-Q (reporting date: 2021-11-20), 10-K (reporting date: 2021-08-28), 10-Q (reporting date: 2021-05-08), 10-Q (reporting date: 2021-02-13), 10-Q (reporting date: 2020-11-21), 10-K (reporting date: 2020-08-29), 10-Q (reporting date: 2020-05-09), 10-Q (reporting date: 2020-02-15), 10-Q (reporting date: 2019-11-23), 10-K (reporting date: 2019-08-31), 10-Q (reporting date: 2019-05-04), 10-Q (reporting date: 2019-02-09), 10-Q (reporting date: 2018-11-17), 10-K (reporting date: 2018-08-25), 10-Q (reporting date: 2018-05-05), 10-Q (reporting date: 2018-02-10), 10-Q (reporting date: 2017-11-18).
1 Q1 2024 Calculation
Working capital turnover
= (Net salesQ1 2024
+ Net salesQ4 2023
+ Net salesQ3 2023
+ Net salesQ2 2023)
÷ Working capital
= ( + + + )
÷ =
2 Click competitor name to see calculations.
The analysis of the financial data reveals several key trends and fluctuations over the examined periods.
- Working Capital
- The working capital exhibits significant volatility and predominantly negative values throughout the time frame. Initially, it shows large negative figures, with minor improvements around early 2020, transitioning briefly into positive territory in the period ending August 29, 2020, implying an unusual increase in current assets relative to current liabilities during this quarter. However, this positive deviation is short-lived, as subsequent periods show a sharp return to negative values with an increasing negative magnitude, indicating a growing imbalance whereby current liabilities exceed current assets by a substantial margin. This trend suggests potential liquidity pressures or an intentional capital structure strategy employing higher short-term liabilities.
- Net Sales
- Net sales demonstrate a generally upward trajectory with seasonal fluctuations throughout the quarters. Early periods show moderate sales volumes, followed by notable surges in specific quarters, particularly in the second half of 2018 and mid to late 2020. The highest net sales values are recorded in August 2020 and subsequent quarters, coinciding with some recovery phases in working capital. The pattern suggests growth momentum with some periodic peaks, possibly driven by increased demand or strategic sales initiatives. Despite fluctuations, the long-term trend indicates expansion, as the latest quarters report the highest sales figures over the dataset.
- Working Capital Turnover
- Working capital turnover data is sparse, with meaningful figures only reported in two discrete periods in 2020. These ratios are exceptionally high at 23.89 and 34.18, which may reflect the unusual working capital position during these periods, possibly due to the transient positive working capital value encountered simultaneously. The elevated turnover ratios indicate that the company was generating very high sales relative to its working capital base, reflecting efficient utilization or, conversely, a constrained working capital pool boosting the ratio. The absence of this metric in most other periods limits comprehensive trend analysis.
Overall, the company shows strong sales growth alongside fluctuating and largely negative working capital positions. The brief positive working capital period in mid-2020 aligns with record sales and high turnover ratios, suggesting atypical working capital management during that time. The persistent negative working capital in other periods may pose liquidity concerns unless supported by operational efficiency or external financing. The data indicates a complex relationship between sales performance and working capital that merits further monitoring and potential strategic focus.
Average Inventory Processing Period
Nov 18, 2023 | Aug 26, 2023 | May 6, 2023 | Feb 11, 2023 | Nov 19, 2022 | Aug 27, 2022 | May 7, 2022 | Feb 12, 2022 | Nov 20, 2021 | Aug 28, 2021 | May 8, 2021 | Feb 13, 2021 | Nov 21, 2020 | Aug 29, 2020 | May 9, 2020 | Feb 15, 2020 | Nov 23, 2019 | Aug 31, 2019 | May 4, 2019 | Feb 9, 2019 | Nov 17, 2018 | Aug 25, 2018 | May 5, 2018 | Feb 10, 2018 | Nov 18, 2017 | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Selected Financial Data | |||||||||||||||||||||||||||||||||
Inventory turnover | |||||||||||||||||||||||||||||||||
Short-term Activity Ratio (no. days) | |||||||||||||||||||||||||||||||||
Average inventory processing period1 | |||||||||||||||||||||||||||||||||
Benchmarks (no. days) | |||||||||||||||||||||||||||||||||
Average Inventory Processing Period, Competitors2 | |||||||||||||||||||||||||||||||||
Amazon.com Inc. | |||||||||||||||||||||||||||||||||
Home Depot Inc. | |||||||||||||||||||||||||||||||||
Lowe’s Cos. Inc. | |||||||||||||||||||||||||||||||||
TJX Cos. Inc. |
Based on: 10-Q (reporting date: 2023-11-18), 10-K (reporting date: 2023-08-26), 10-Q (reporting date: 2023-05-06), 10-Q (reporting date: 2023-02-11), 10-Q (reporting date: 2022-11-19), 10-K (reporting date: 2022-08-27), 10-Q (reporting date: 2022-05-07), 10-Q (reporting date: 2022-02-12), 10-Q (reporting date: 2021-11-20), 10-K (reporting date: 2021-08-28), 10-Q (reporting date: 2021-05-08), 10-Q (reporting date: 2021-02-13), 10-Q (reporting date: 2020-11-21), 10-K (reporting date: 2020-08-29), 10-Q (reporting date: 2020-05-09), 10-Q (reporting date: 2020-02-15), 10-Q (reporting date: 2019-11-23), 10-K (reporting date: 2019-08-31), 10-Q (reporting date: 2019-05-04), 10-Q (reporting date: 2019-02-09), 10-Q (reporting date: 2018-11-17), 10-K (reporting date: 2018-08-25), 10-Q (reporting date: 2018-05-05), 10-Q (reporting date: 2018-02-10), 10-Q (reporting date: 2017-11-18).
1 Q1 2024 Calculation
Average inventory processing period = 365 ÷ Inventory turnover
= 365 ÷ =
2 Click competitor name to see calculations.
The analysis of the quarterly data indicates the following trends for the financial ratios related to inventory management over the specified periods.
- Inventory turnover
- The inventory turnover ratio shows a generally increasing trend from the initial recorded value of 1.33 through to the latest value of 1.45. After a slight decline from 1.33 to approximately 1.21 during the early periods, the ratio begins to rise steadily from around the period ending August 2020. The turnover ratio peaks at 1.51 around August 2021, indicating an improvement in the rate at which inventory is sold and replaced. Following this peak, there is a mild decline but it stabilizes near 1.45 from early 2023 onwards, suggesting a relatively consistent inventory turnover rate in the recent quarters.
- Average inventory processing period (days)
- The average inventory processing period inversely mirrors the inventory turnover movements, generally decreasing over time. Initially, the period was high at 274 days, gradually increasing to a peak near 301 days around May 2020, indicating slower inventory movement or longer holding periods. However, from this peak, a consistent downward trend is observed, reaching a low of approximately 243 days in August 2021, showing improved efficiency in inventory processing. Following this low, the processing period increases slightly again and stabilizes around 251 to 252 days towards the end of the series, indicating a modest elongation but still an improvement compared to the earlier higher processing periods.
Overall, the data reflects enhanced inventory management efficiency over the time span covered, with inventory being turned over more frequently and held for fewer days towards the latter periods. This suggests improvements in operational aspects such as supply chain management, stock replenishment, and sales effectiveness. The recent stabilization in both metrics implies that these improvements have reached a steady state.
Average Receivable Collection Period
Nov 18, 2023 | Aug 26, 2023 | May 6, 2023 | Feb 11, 2023 | Nov 19, 2022 | Aug 27, 2022 | May 7, 2022 | Feb 12, 2022 | Nov 20, 2021 | Aug 28, 2021 | May 8, 2021 | Feb 13, 2021 | Nov 21, 2020 | Aug 29, 2020 | May 9, 2020 | Feb 15, 2020 | Nov 23, 2019 | Aug 31, 2019 | May 4, 2019 | Feb 9, 2019 | Nov 17, 2018 | Aug 25, 2018 | May 5, 2018 | Feb 10, 2018 | Nov 18, 2017 | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Selected Financial Data | |||||||||||||||||||||||||||||||||
Receivables turnover | |||||||||||||||||||||||||||||||||
Short-term Activity Ratio (no. days) | |||||||||||||||||||||||||||||||||
Average receivable collection period1 | |||||||||||||||||||||||||||||||||
Benchmarks (no. days) | |||||||||||||||||||||||||||||||||
Average Receivable Collection Period, Competitors2 | |||||||||||||||||||||||||||||||||
Home Depot Inc. | |||||||||||||||||||||||||||||||||
TJX Cos. Inc. |
Based on: 10-Q (reporting date: 2023-11-18), 10-K (reporting date: 2023-08-26), 10-Q (reporting date: 2023-05-06), 10-Q (reporting date: 2023-02-11), 10-Q (reporting date: 2022-11-19), 10-K (reporting date: 2022-08-27), 10-Q (reporting date: 2022-05-07), 10-Q (reporting date: 2022-02-12), 10-Q (reporting date: 2021-11-20), 10-K (reporting date: 2021-08-28), 10-Q (reporting date: 2021-05-08), 10-Q (reporting date: 2021-02-13), 10-Q (reporting date: 2020-11-21), 10-K (reporting date: 2020-08-29), 10-Q (reporting date: 2020-05-09), 10-Q (reporting date: 2020-02-15), 10-Q (reporting date: 2019-11-23), 10-K (reporting date: 2019-08-31), 10-Q (reporting date: 2019-05-04), 10-Q (reporting date: 2019-02-09), 10-Q (reporting date: 2018-11-17), 10-K (reporting date: 2018-08-25), 10-Q (reporting date: 2018-05-05), 10-Q (reporting date: 2018-02-10), 10-Q (reporting date: 2017-11-18).
1 Q1 2024 Calculation
Average receivable collection period = 365 ÷ Receivables turnover
= 365 ÷ =
2 Click competitor name to see calculations.
- Receivables Turnover Ratio
- The receivables turnover ratio data begins from May 2018, showing an initial high ratio of 43.47 which gradually declines over the subsequent quarters. From May 2018 to August 2020, the ratio fluctuates between 34.63 and 45.24, indicating some variability in how quickly receivables are collected. After August 2020, there is a general downward trend, with values mostly ranging between 33.55 and 39.93. The lowest observed ratio is 32.19 in February 2022, suggesting a slower turnover of receivables in that period. Towards the latest quarters ending November 2023, the ratio hovers around the mid-30s, which implies a moderate pace of receivables collection relative to earlier higher turnovers.
- Average Receivable Collection Period
- The average receivable collection period shows an inverse pattern consistent with the turnover ratio. From May 2018 onwards, days to collect receivables mostly range between 8 to 11 days. Initially, the period is relatively low at 8 days in November 2018, but it increases to 10 or 11 days in several quarters, notably reaching 11 days multiple times between November 2020 and November 2023. The average days remain fairly stable with minor fluctuations but show a slight trend toward longer collection periods in the latest years. This suggests a marginal slowing in how quickly receivables are collected over time, in line with the declining turnover ratio.
- Overall Trend and Insights
- The data exhibits a moderate decline in receivables turnover from relatively high levels, accompanied by a slight increase in the average collection period. This pattern indicates that over the analyzed timeframe, the company has experienced a gradual lengthening of the time it takes to collect receivables. While turnover fluctuates, the long-term trend points to a loosening in receivables management efficiency. The periods with higher turnover usually correspond with shorter collection days, confirming the expected inverse relationship. The range of days remains tight, suggesting the company maintains fairly consistent management of receivables, albeit with some easing in collection speed during recent periods.
Operating Cycle
Nov 18, 2023 | Aug 26, 2023 | May 6, 2023 | Feb 11, 2023 | Nov 19, 2022 | Aug 27, 2022 | May 7, 2022 | Feb 12, 2022 | Nov 20, 2021 | Aug 28, 2021 | May 8, 2021 | Feb 13, 2021 | Nov 21, 2020 | Aug 29, 2020 | May 9, 2020 | Feb 15, 2020 | Nov 23, 2019 | Aug 31, 2019 | May 4, 2019 | Feb 9, 2019 | Nov 17, 2018 | Aug 25, 2018 | May 5, 2018 | Feb 10, 2018 | Nov 18, 2017 | |||||||||
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Selected Financial Data | |||||||||||||||||||||||||||||||||
Average inventory processing period | |||||||||||||||||||||||||||||||||
Average receivable collection period | |||||||||||||||||||||||||||||||||
Short-term Activity Ratio | |||||||||||||||||||||||||||||||||
Operating cycle1 | |||||||||||||||||||||||||||||||||
Benchmarks | |||||||||||||||||||||||||||||||||
Operating Cycle, Competitors2 | |||||||||||||||||||||||||||||||||
Home Depot Inc. | |||||||||||||||||||||||||||||||||
TJX Cos. Inc. |
Based on: 10-Q (reporting date: 2023-11-18), 10-K (reporting date: 2023-08-26), 10-Q (reporting date: 2023-05-06), 10-Q (reporting date: 2023-02-11), 10-Q (reporting date: 2022-11-19), 10-K (reporting date: 2022-08-27), 10-Q (reporting date: 2022-05-07), 10-Q (reporting date: 2022-02-12), 10-Q (reporting date: 2021-11-20), 10-K (reporting date: 2021-08-28), 10-Q (reporting date: 2021-05-08), 10-Q (reporting date: 2021-02-13), 10-Q (reporting date: 2020-11-21), 10-K (reporting date: 2020-08-29), 10-Q (reporting date: 2020-05-09), 10-Q (reporting date: 2020-02-15), 10-Q (reporting date: 2019-11-23), 10-K (reporting date: 2019-08-31), 10-Q (reporting date: 2019-05-04), 10-Q (reporting date: 2019-02-09), 10-Q (reporting date: 2018-11-17), 10-K (reporting date: 2018-08-25), 10-Q (reporting date: 2018-05-05), 10-Q (reporting date: 2018-02-10), 10-Q (reporting date: 2017-11-18).
1 Q1 2024 Calculation
Operating cycle = Average inventory processing period + Average receivable collection period
= + =
2 Click competitor name to see calculations.
The analysis of the quarterly financial periods reveals notable trends in the management of inventory, receivables, and the overall operating cycle.
- Average Inventory Processing Period
- This metric shows an initial rising trend from 274 days to a peak around 301 days by early 2020, indicating a lengthening time to process inventory during that phase. From that peak, there is a general downward trend toward approximately 251-252 days toward the end of 2023, reflecting improved efficiency or faster turnover in inventory management. The decline becomes more marked starting mid-2021 and continues consistently thereafter.
- Average Receivable Collection Period
- The average receivables collection period fluctuates within a narrow range, generally between 8 and 11 days throughout the recorded periods. This suggests a relatively stable and efficient credit collection process, with minor periodic increases around the year 2020 and 2022. No significant long-term trend upwards or downwards is apparent, indicating consistent receivables management policies.
- Operating Cycle
- The operating cycle, which combines inventory processing and receivables collection periods, mirrors the observations from the two individual components. It rises from approximately 282 days to a peak slightly above 311 days in early 2020, implying lengthened cash conversion cycles at that time. Thereafter, it steadily declines to about 261-263 days by the end of 2023, which points to improvements in working capital efficiency and faster conversion of resources back to cash.
Overall, the data suggests that the entity improved its inventory turnover and reduced the duration of the operating cycle significantly after early 2020, while maintaining stable receivables collection efficiency. These changes could reflect enhanced operational effectiveness and better management of the supply chain and customer payments over the observed period.
Average Payables Payment Period
Nov 18, 2023 | Aug 26, 2023 | May 6, 2023 | Feb 11, 2023 | Nov 19, 2022 | Aug 27, 2022 | May 7, 2022 | Feb 12, 2022 | Nov 20, 2021 | Aug 28, 2021 | May 8, 2021 | Feb 13, 2021 | Nov 21, 2020 | Aug 29, 2020 | May 9, 2020 | Feb 15, 2020 | Nov 23, 2019 | Aug 31, 2019 | May 4, 2019 | Feb 9, 2019 | Nov 17, 2018 | Aug 25, 2018 | May 5, 2018 | Feb 10, 2018 | Nov 18, 2017 | |||||||||
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Selected Financial Data | |||||||||||||||||||||||||||||||||
Payables turnover | |||||||||||||||||||||||||||||||||
Short-term Activity Ratio (no. days) | |||||||||||||||||||||||||||||||||
Average payables payment period1 | |||||||||||||||||||||||||||||||||
Benchmarks (no. days) | |||||||||||||||||||||||||||||||||
Average Payables Payment Period, Competitors2 | |||||||||||||||||||||||||||||||||
Amazon.com Inc. | |||||||||||||||||||||||||||||||||
Home Depot Inc. | |||||||||||||||||||||||||||||||||
Lowe’s Cos. Inc. | |||||||||||||||||||||||||||||||||
TJX Cos. Inc. |
Based on: 10-Q (reporting date: 2023-11-18), 10-K (reporting date: 2023-08-26), 10-Q (reporting date: 2023-05-06), 10-Q (reporting date: 2023-02-11), 10-Q (reporting date: 2022-11-19), 10-K (reporting date: 2022-08-27), 10-Q (reporting date: 2022-05-07), 10-Q (reporting date: 2022-02-12), 10-Q (reporting date: 2021-11-20), 10-K (reporting date: 2021-08-28), 10-Q (reporting date: 2021-05-08), 10-Q (reporting date: 2021-02-13), 10-Q (reporting date: 2020-11-21), 10-K (reporting date: 2020-08-29), 10-Q (reporting date: 2020-05-09), 10-Q (reporting date: 2020-02-15), 10-Q (reporting date: 2019-11-23), 10-K (reporting date: 2019-08-31), 10-Q (reporting date: 2019-05-04), 10-Q (reporting date: 2019-02-09), 10-Q (reporting date: 2018-11-17), 10-K (reporting date: 2018-08-25), 10-Q (reporting date: 2018-05-05), 10-Q (reporting date: 2018-02-10), 10-Q (reporting date: 2017-11-18).
1 Q1 2024 Calculation
Average payables payment period = 365 ÷ Payables turnover
= 365 ÷ =
2 Click competitor name to see calculations.
The analysis of the payables turnover ratio and the average payables payment period over the observed quarters reveals notable stability with minor fluctuations. The payables turnover ratio, which measures how many times payables are settled during a period, begins at 1.19 and generally moves within a narrow range between 1.07 and 1.17 throughout the timeline. This indicates a consistent frequency in settling payables, with a slight decline starting around early 2022 before recovering towards the end of the dataset.
Correspondingly, the average payables payment period, expressed in number of days, shows an inverse relationship to the turnover ratio as expected. Initially recorded at 307 days, this period extends gradually to a peak near 343 days by early 2023, indicating that the company took longer to pay its suppliers during this phase. Following this peak, the period decreases steadily to 313 days towards the latest quarter, signaling an improvement in payment promptness.
Overall, the data suggests that the company maintained a relatively stable approach to managing payables over the examined timeline, with a mild lengthening of payment periods occurring around 2022, possibly due to operational or market factors. The recent trend towards reduced days payable indicates a return to more prompt payment practices, which might reflect improved liquidity or adjustments in working capital strategy.
- Payables Turnover Ratio
- Remained stable between 1.07 and 1.19, with slight fluctuations and a modest dip in early 2022.
- Average Payables Payment Period
- Increased gradually from 307 up to 343 days in early 2023, then decreased back to 313 days by the latest quarter.
- Trend Interpretation
- Overall stability with a temporary increase in payment duration followed by an improvement in payment speed.
Cash Conversion Cycle
Nov 18, 2023 | Aug 26, 2023 | May 6, 2023 | Feb 11, 2023 | Nov 19, 2022 | Aug 27, 2022 | May 7, 2022 | Feb 12, 2022 | Nov 20, 2021 | Aug 28, 2021 | May 8, 2021 | Feb 13, 2021 | Nov 21, 2020 | Aug 29, 2020 | May 9, 2020 | Feb 15, 2020 | Nov 23, 2019 | Aug 31, 2019 | May 4, 2019 | Feb 9, 2019 | Nov 17, 2018 | Aug 25, 2018 | May 5, 2018 | Feb 10, 2018 | Nov 18, 2017 | |||||||||
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Selected Financial Data | |||||||||||||||||||||||||||||||||
Average inventory processing period | |||||||||||||||||||||||||||||||||
Average receivable collection period | |||||||||||||||||||||||||||||||||
Average payables payment period | |||||||||||||||||||||||||||||||||
Short-term Activity Ratio | |||||||||||||||||||||||||||||||||
Cash conversion cycle1 | |||||||||||||||||||||||||||||||||
Benchmarks | |||||||||||||||||||||||||||||||||
Cash Conversion Cycle, Competitors2 | |||||||||||||||||||||||||||||||||
Home Depot Inc. | |||||||||||||||||||||||||||||||||
TJX Cos. Inc. |
Based on: 10-Q (reporting date: 2023-11-18), 10-K (reporting date: 2023-08-26), 10-Q (reporting date: 2023-05-06), 10-Q (reporting date: 2023-02-11), 10-Q (reporting date: 2022-11-19), 10-K (reporting date: 2022-08-27), 10-Q (reporting date: 2022-05-07), 10-Q (reporting date: 2022-02-12), 10-Q (reporting date: 2021-11-20), 10-K (reporting date: 2021-08-28), 10-Q (reporting date: 2021-05-08), 10-Q (reporting date: 2021-02-13), 10-Q (reporting date: 2020-11-21), 10-K (reporting date: 2020-08-29), 10-Q (reporting date: 2020-05-09), 10-Q (reporting date: 2020-02-15), 10-Q (reporting date: 2019-11-23), 10-K (reporting date: 2019-08-31), 10-Q (reporting date: 2019-05-04), 10-Q (reporting date: 2019-02-09), 10-Q (reporting date: 2018-11-17), 10-K (reporting date: 2018-08-25), 10-Q (reporting date: 2018-05-05), 10-Q (reporting date: 2018-02-10), 10-Q (reporting date: 2017-11-18).
1 Q1 2024 Calculation
Cash conversion cycle = Average inventory processing period + Average receivable collection period – Average payables payment period
= + – =
2 Click competitor name to see calculations.
The financial data reveals distinct trends in the company's working capital management over the examined periods.
- Average Inventory Processing Period
- The average inventory processing period demonstrates a fluctuating yet generally declining trend. Beginning at 274 days in November 2017, it peaks around 301 days in May 2020, then progressively decreases to approximately 252 days by November 2023. This decline after mid-2020 indicates improving inventory turnover efficiency.
- Average Receivable Collection Period
- The average receivable collection period remains relatively stable throughout the timeline, fluctuating narrowly between 8 to 11 days. Such stability suggests consistent credit and collection policies with minimal variability in the time taken to collect receivables.
- Average Payables Payment Period
- The average payables payment period shows moderate variability, starting at 307 days in November 2017, peaking at 343 days in November 2022, and then slightly retracting to around 313 days by November 2023. This indicates a tendency to extend payment terms somewhat over time, potentially enhancing short-term liquidity.
- Cash Conversion Cycle
- The cash conversion cycle (CCC) remains negative throughout all periods, indicating that the company essentially collects cash from customers before it needs to pay suppliers. The CCC fluctuates from a low point of -7 days in May 2020 to a deeper negative value of about -68 days in February 2023, followed by a gradual rise towards -50 days by November 2023. The prolonged negative CCC highlights efficient working capital management, with increasing efficiency in managing the timing of cash flows over time.
Overall, the decreasing inventory processing period combined with a stable receivable collection period and an extended payables payment period lead to a consistently negative cash conversion cycle. This reflects effective strategies in managing operational liquidity and optimizing the timing of cash inflows and outflows. The observed trends suggest an enhancement in operational efficiency, particularly after mid-2020, culminating in improved cash flow performance.