Analysis of Short-term (Operating) Activity Ratios
Quarterly Data
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)
Dollar General Corp., short-term (operating) activity ratios (quarterly data)
Based on: 10-Q (reporting date: 2024-08-02), 10-Q (reporting date: 2024-05-03), 10-K (reporting date: 2024-02-02), 10-Q (reporting date: 2023-11-03), 10-Q (reporting date: 2023-08-04), 10-Q (reporting date: 2023-05-05), 10-K (reporting date: 2023-02-03), 10-Q (reporting date: 2022-10-28), 10-Q (reporting date: 2022-07-29), 10-Q (reporting date: 2022-04-29), 10-K (reporting date: 2022-01-28), 10-Q (reporting date: 2021-10-29), 10-Q (reporting date: 2021-07-30), 10-Q (reporting date: 2021-04-30), 10-K (reporting date: 2021-01-29), 10-Q (reporting date: 2020-10-30), 10-Q (reporting date: 2020-07-31), 10-Q (reporting date: 2020-05-01), 10-K (reporting date: 2020-01-31), 10-Q (reporting date: 2019-11-01), 10-Q (reporting date: 2019-08-02), 10-Q (reporting date: 2019-05-03).
The analysis of the financial ratios reveals several noteworthy trends over the observed periods.
- Inventory Turnover
- The inventory turnover ratio exhibited an initial decline from 4.43 to 4.12 over the early periods, followed by a recovery reaching up to 4.99. Thereafter, a gradual decrease is observed, culminating at approximately 3.99 by the latest period. This decline in inventory turnover in recent periods might suggest slower inventory movement or increased inventory levels relative to sales.
- Payables Turnover
- The payables turnover ratio showed some fluctuations with a general decrease from 7.42 to a low near 5.56, followed by a renewed increase reaching around 7.92 before settling near 7.21 in the latest quarter. This pattern indicates variability in the company's payment speed to suppliers, with periods of both accelerated and decelerated payment cycles.
- Working Capital Turnover
- Significant volatility characterizes the working capital turnover ratio. It started high near 41.68, experienced a dramatic drop to as low as 13.76 at one point, then sharply peaked at an extraordinary value exceeding 300 before normalizing back to lower levels around 25 by the latest period. Such swings may reflect substantial changes in operational efficiency, working capital management, or possibly one-time events impacting working capital components.
- Average Inventory Processing Period
- The average inventory processing days initially remained in the low 80s, decreased to approximately 73-74, then progressively increased to peak near 105 days before showing a slight decline toward the end, stabilizing in the low 90s. This upward trend in days suggest lengthening inventory holding periods, potentially indicating slower turnover or stock accumulation.
- Average Payables Payment Period
- The average payables payment days increased from the high 40s towards a peak of 66 days, indicating that the company extended the duration before settling payables during certain periods. Subsequently, it decreased and stabilized around 46-51 days in the latest periods, signaling a return to more standard payment terms.
Overall, the data points to fluctuating operational efficiencies and working capital management practices over time. The declining inventory turnover alongside increased inventory holding periods may flag inventory management challenges. The variability in payables turnover and payment periods suggests adjustments in payment policies, possibly influenced by liquidity considerations. The extreme swings in working capital turnover warrant closer examination to understand underlying causes, which may stem from changes in sales, payables, or inventories.
Turnover Ratios
Average No. Days
Inventory Turnover
Dollar General Corp., inventory turnover calculation (quarterly data)
| Aug 2, 2024 | May 3, 2024 | Feb 2, 2024 | Nov 3, 2023 | Aug 4, 2023 | May 5, 2023 | Feb 3, 2023 | Oct 28, 2022 | Jul 29, 2022 | Apr 29, 2022 | Jan 28, 2022 | Oct 29, 2021 | Jul 30, 2021 | Apr 30, 2021 | Jan 29, 2021 | Oct 30, 2020 | Jul 31, 2020 | May 1, 2020 | Jan 31, 2020 | Nov 1, 2019 | Aug 2, 2019 | May 3, 2019 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||||||||||||||||||||||||
| Cost of goods sold | 7,150,882) | 6,921,872) | 6,952,178) | 6,881,554) | 6,751,495) | 6,387,358) | 7,054,590) | 6,579,696) | 6,377,490) | 6,012,989) | 5,951,208) | 5,898,400) | 5,912,539) | 5,645,296) | 5,677,829) | 5,631,385) | 5,866,006) | 5,852,757) | 4,884,879) | 4,926,307) | 4,832,817) | 4,620,909) | |||||||
| Merchandise inventories | 7,000,569) | 6,934,389) | 6,994,266) | 7,356,065) | 7,531,459) | 7,335,845) | 6,760,733) | 7,144,722) | 6,935,856) | 6,087,399) | 5,614,325) | 5,298,859) | 5,279,273) | 5,099,465) | 5,247,477) | 5,025,810) | 4,391,157) | 4,107,331) | 4,676,848) | 4,496,377) | 4,419,628) | 4,109,759) | |||||||
| Short-term Activity Ratio | |||||||||||||||||||||||||||||
| Inventory turnover1 | 3.99 | 3.97 | 3.86 | 3.68 | 3.55 | 3.60 | 3.85 | 3.49 | 3.49 | 3.91 | 4.17 | 4.37 | 4.33 | 4.48 | 4.39 | 4.42 | 4.90 | 4.99 | 4.12 | 4.22 | 4.20 | 4.43 | |||||||
| Benchmarks | |||||||||||||||||||||||||||||
| Inventory Turnover, Competitors2 | |||||||||||||||||||||||||||||
| Costco Wholesale Corp. | 12.30 | 10.77 | 11.92 | 12.74 | 12.77 | 11.96 | 12.77 | 12.68 | 12.82 | 10.94 | 11.13 | 10.81 | 11.14 | 10.46 | 12.01 | 11.62 | 11.19 | 10.08 | — | — | — | — | |||||||
| Target Corp. | 6.09 | 6.55 | 6.54 | 5.31 | 6.29 | 6.51 | 6.09 | 4.73 | 5.19 | 5.09 | 5.39 | 4.86 | 6.22 | 6.49 | 6.21 | 4.94 | 6.78 | 6.65 | — | — | — | — | |||||||
| Walmart Inc. | 9.01 | 8.96 | 8.93 | 7.56 | 8.43 | 8.29 | 8.20 | 7.01 | 7.40 | 7.06 | 7.59 | 7.46 | 8.88 | 9.09 | 9.35 | 7.96 | 9.94 | 9.79 | — | — | — | — | |||||||
Based on: 10-Q (reporting date: 2024-08-02), 10-Q (reporting date: 2024-05-03), 10-K (reporting date: 2024-02-02), 10-Q (reporting date: 2023-11-03), 10-Q (reporting date: 2023-08-04), 10-Q (reporting date: 2023-05-05), 10-K (reporting date: 2023-02-03), 10-Q (reporting date: 2022-10-28), 10-Q (reporting date: 2022-07-29), 10-Q (reporting date: 2022-04-29), 10-K (reporting date: 2022-01-28), 10-Q (reporting date: 2021-10-29), 10-Q (reporting date: 2021-07-30), 10-Q (reporting date: 2021-04-30), 10-K (reporting date: 2021-01-29), 10-Q (reporting date: 2020-10-30), 10-Q (reporting date: 2020-07-31), 10-Q (reporting date: 2020-05-01), 10-K (reporting date: 2020-01-31), 10-Q (reporting date: 2019-11-01), 10-Q (reporting date: 2019-08-02), 10-Q (reporting date: 2019-05-03).
1 Q2 2025 Calculation
Inventory turnover
= (Cost of goods soldQ2 2025
+ Cost of goods soldQ1 2025
+ Cost of goods soldQ4 2024
+ Cost of goods soldQ3 2024)
÷ Merchandise inventories
= (7,150,882 + 6,921,872 + 6,952,178 + 6,881,554)
÷ 7,000,569 = 3.99
2 Click competitor name to see calculations.
- Cost of Goods Sold (COGS)
- The cost of goods sold exhibited a general upward trend over the analyzed periods, increasing from approximately 4.62 billion USD in May 2019 to around 7.15 billion USD by August 2024. There were some fluctuations, with a peak observed in February 2023 at about 7.05 billion USD followed by slight decreases and subsequent recoveries, indicating variability likely due to seasonal or market-driven factors.
- Merchandise Inventories
- Merchandise inventories showed a marked increase over time, rising from roughly 4.11 billion USD in May 2019 to over 7.00 billion USD by August 2024. The increase was somewhat steady, with intensified growth starting around mid-2021. This trend suggests an accumulation of stock, possibly reflecting anticipated demand, expansion strategies, or changes in supply chain dynamics.
- Inventory Turnover Ratio
- The inventory turnover ratio declined from 4.43 in May 2019 to a low of approximately 3.49 during late 2022. This decrease indicates a slowdown in how quickly inventory is sold and replaced. However, from early 2023 onwards, the ratio began to recover, reaching close to 3.99 by August 2024. The initial decline could point to increasing inventory levels not matched by sales growth, but the recent rebound suggests an improvement in inventory efficiency or sales acceleration relative to stock levels.
- Overall Insights
- The increasing cost of goods sold in conjunction with rising merchandise inventories suggests that the company has been expanding its operations or facing higher costs. The declining inventory turnover ratio until late 2022 indicates potential challenges in converting inventory into sales efficiently, but the subsequent recovery in this ratio may signal adaptive measures taken to optimize inventory management or sales processes.
Payables Turnover
Dollar General Corp., payables turnover calculation (quarterly data)
| Aug 2, 2024 | May 3, 2024 | Feb 2, 2024 | Nov 3, 2023 | Aug 4, 2023 | May 5, 2023 | Feb 3, 2023 | Oct 28, 2022 | Jul 29, 2022 | Apr 29, 2022 | Jan 28, 2022 | Oct 29, 2021 | Jul 30, 2021 | Apr 30, 2021 | Jan 29, 2021 | Oct 30, 2020 | Jul 31, 2020 | May 1, 2020 | Jan 31, 2020 | Nov 1, 2019 | Aug 2, 2019 | May 3, 2019 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||||||||||||||||||||||||
| Cost of goods sold | 7,150,882) | 6,921,872) | 6,952,178) | 6,881,554) | 6,751,495) | 6,387,358) | 7,054,590) | 6,579,696) | 6,377,490) | 6,012,989) | 5,951,208) | 5,898,400) | 5,912,539) | 5,645,296) | 5,677,829) | 5,631,385) | 5,866,006) | 5,852,757) | 4,884,879) | 4,926,307) | 4,832,817) | 4,620,909) | |||||||
| Accounts payable | 3,869,267) | 3,472,487) | 3,587,374) | 3,651,778) | 3,681,634) | 3,679,170) | 3,552,991) | 4,127,076) | 4,358,388) | 3,906,852) | 3,738,604) | 3,532,639) | 3,369,984) | 3,294,423) | 3,614,089) | 3,770,528) | 3,400,642) | 2,954,361) | 2,860,682) | 2,844,171) | 2,727,079) | 2,452,898) | |||||||
| Short-term Activity Ratio | |||||||||||||||||||||||||||||
| Payables turnover1 | 7.21 | 7.92 | 7.52 | 7.41 | 7.27 | 7.18 | 7.32 | 6.04 | 5.56 | 6.09 | 6.26 | 6.55 | 6.79 | 6.93 | 6.37 | 5.90 | 6.33 | 6.94 | 6.73 | 6.67 | 6.80 | 7.42 | |||||||
| Benchmarks | |||||||||||||||||||||||||||||
| Payables Turnover, Competitors2 | |||||||||||||||||||||||||||||
| Costco Wholesale Corp. | 12.39 | 10.37 | 11.45 | 11.78 | 12.46 | 10.57 | 12.16 | 12.28 | 12.56 | 11.07 | 11.17 | 10.80 | 10.74 | 9.06 | 10.49 | 10.45 | 10.79 | 8.83 | — | — | — | — | |||||||
| Target Corp. | 6.10 | 6.64 | 6.43 | 5.48 | 6.50 | 6.88 | 6.10 | 5.25 | 5.34 | 5.46 | 4.84 | 4.47 | 5.54 | 5.88 | 5.15 | 4.42 | 5.61 | 5.94 | — | — | — | — | |||||||
| Walmart Inc. | 8.84 | 8.85 | 8.63 | 7.92 | 8.45 | 8.70 | 8.63 | 7.93 | 8.18 | 8.17 | 7.76 | 7.50 | 8.55 | 8.75 | 8.55 | 7.62 | 8.81 | 9.15 | — | — | — | — | |||||||
Based on: 10-Q (reporting date: 2024-08-02), 10-Q (reporting date: 2024-05-03), 10-K (reporting date: 2024-02-02), 10-Q (reporting date: 2023-11-03), 10-Q (reporting date: 2023-08-04), 10-Q (reporting date: 2023-05-05), 10-K (reporting date: 2023-02-03), 10-Q (reporting date: 2022-10-28), 10-Q (reporting date: 2022-07-29), 10-Q (reporting date: 2022-04-29), 10-K (reporting date: 2022-01-28), 10-Q (reporting date: 2021-10-29), 10-Q (reporting date: 2021-07-30), 10-Q (reporting date: 2021-04-30), 10-K (reporting date: 2021-01-29), 10-Q (reporting date: 2020-10-30), 10-Q (reporting date: 2020-07-31), 10-Q (reporting date: 2020-05-01), 10-K (reporting date: 2020-01-31), 10-Q (reporting date: 2019-11-01), 10-Q (reporting date: 2019-08-02), 10-Q (reporting date: 2019-05-03).
1 Q2 2025 Calculation
Payables turnover
= (Cost of goods soldQ2 2025
+ Cost of goods soldQ1 2025
+ Cost of goods soldQ4 2024
+ Cost of goods soldQ3 2024)
÷ Accounts payable
= (7,150,882 + 6,921,872 + 6,952,178 + 6,881,554)
÷ 3,869,267 = 7.21
2 Click competitor name to see calculations.
- Cost of Goods Sold (COGS)
- Over the observed period, the cost of goods sold generally exhibits an upward trend, increasing from approximately $4.62 billion in early May 2019 to a peak exceeding $7.05 billion by early 2023. Following this peak, there is some fluctuation, with values slightly declining and then rising again, ending near $7.15 billion as of August 2024. This overall increase likely reflects growth in business volume or inflationary pressures affecting inventory costs.
- Accounts Payable
- Accounts payable show variability with a mild upward trend from about $2.45 billion in May 2019 to a high near $4.36 billion in July 2022. Subsequently, accounts payable decrease significantly to around $3.55 billion by February 2023 before fluctuating around the $3.5 billion to $3.9 billion range through August 2024. This pattern suggests changes in payment policies, supplier terms, or working capital management adjustments over time.
- Payables Turnover Ratio
- The payables turnover ratio, which indicates the frequency of paying off suppliers within a period, shows a generally declining trend from 7.42 at the start of the timeframe down to a low near 5.56 in July 2022. Thereafter, the ratio reverses direction, increasing to a peak of 7.92 in May 2024 and experiencing a slight decline to 7.21 by August 2024. This trend implies that the company initially took longer to pay its suppliers but became more efficient or quicker in settling payables in the more recent periods.
- Combined Analysis
- The rising cost of goods sold combined with fluctuating accounts payable and an initially declining then rising payables turnover ratio suggests changing dynamics in operational, procurement, and payment practices. While the company faces increasing costs of goods, its ability to manage payables improved notably after mid-2022, resulting in faster payment cycles. This could reflect strategic initiatives to optimize supplier relationships or inventory turnover despite increasing sourcing costs.
Working Capital Turnover
Dollar General Corp., working capital turnover calculation (quarterly data)
| Aug 2, 2024 | May 3, 2024 | Feb 2, 2024 | Nov 3, 2023 | Aug 4, 2023 | May 5, 2023 | Feb 3, 2023 | Oct 28, 2022 | Jul 29, 2022 | Apr 29, 2022 | Jan 28, 2022 | Oct 29, 2021 | Jul 30, 2021 | Apr 30, 2021 | Jan 29, 2021 | Oct 30, 2020 | Jul 31, 2020 | May 1, 2020 | Jan 31, 2020 | Nov 1, 2019 | Aug 2, 2019 | May 3, 2019 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||||||||||||||||||||||||
| Current assets | 8,724,242) | 8,096,971) | 8,010,724) | 8,271,078) | 8,413,979) | 8,055,460) | 7,581,009) | 8,017,016) | 7,682,892) | 6,736,870) | 6,303,843) | 6,181,834) | 5,992,718) | 6,041,745) | 6,914,219) | 7,533,432) | 7,597,408) | 6,992,483) | 5,177,868) | 5,068,542) | 4,919,138) | 4,583,769) | |||||||
| Less: Current liabilities | 7,141,187) | 6,641,862) | 6,725,701) | 6,787,090) | 6,033,922) | 6,100,679) | 5,887,768) | 6,502,647) | 7,566,786) | 6,951,841) | 5,979,357) | 5,740,499) | 5,479,084) | 5,315,398) | 5,710,783) | 5,886,211) | 5,411,188) | 4,843,228) | 4,543,560) | 4,506,038) | 4,312,270) | 3,956,716) | |||||||
| Working capital | 1,583,055) | 1,455,109) | 1,285,023) | 1,483,988) | 2,380,057) | 1,954,781) | 1,693,241) | 1,514,369) | 116,106) | (214,971) | 324,486) | 441,335) | 513,634) | 726,347) | 1,203,436) | 1,647,221) | 2,186,220) | 2,149,255) | 634,308) | 562,504) | 606,868) | 627,053) | |||||||
| Net sales | 10,210,361) | 9,914,021) | 9,858,514) | 9,694,082) | 9,796,181) | 9,342,832) | 10,202,907) | 9,464,891) | 9,425,713) | 8,751,352) | 8,651,448) | 8,517,839) | 8,650,198) | 8,400,964) | 8,414,524) | 8,199,625) | 8,684,241) | 8,448,449) | 7,157,642) | 6,991,393) | 6,981,753) | 6,623,185) | |||||||
| Short-term Activity Ratio | |||||||||||||||||||||||||||||
| Working capital turnover1 | 25.06 | 26.98 | 30.11 | 26.30 | 16.30 | 19.66 | 22.35 | 23.97 | 304.43 | — | 105.46 | 77.00 | 65.54 | 46.40 | 28.04 | 19.72 | 14.31 | 13.76 | 43.75 | 48.44 | 43.95 | 41.68 | |||||||
| Benchmarks | |||||||||||||||||||||||||||||
| Working Capital Turnover, Competitors2 | |||||||||||||||||||||||||||||
| Costco Wholesale Corp. | — | — | — | — | — | 72.76 | 103.53 | 89.52 | 126.82 | 209.37 | 319.10 | 183.50 | 202.13 | 391.97 | 3,000.81 | — | — | — | — | — | — | — | |||||||
| Target Corp. | — | — | — | — | — | — | — | — | — | — | — | — | 124.01 | 73.63 | 148.27 | 93.09 | 48.90 | 394.58 | — | — | — | — | |||||||
| Walmart Inc. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
Based on: 10-Q (reporting date: 2024-08-02), 10-Q (reporting date: 2024-05-03), 10-K (reporting date: 2024-02-02), 10-Q (reporting date: 2023-11-03), 10-Q (reporting date: 2023-08-04), 10-Q (reporting date: 2023-05-05), 10-K (reporting date: 2023-02-03), 10-Q (reporting date: 2022-10-28), 10-Q (reporting date: 2022-07-29), 10-Q (reporting date: 2022-04-29), 10-K (reporting date: 2022-01-28), 10-Q (reporting date: 2021-10-29), 10-Q (reporting date: 2021-07-30), 10-Q (reporting date: 2021-04-30), 10-K (reporting date: 2021-01-29), 10-Q (reporting date: 2020-10-30), 10-Q (reporting date: 2020-07-31), 10-Q (reporting date: 2020-05-01), 10-K (reporting date: 2020-01-31), 10-Q (reporting date: 2019-11-01), 10-Q (reporting date: 2019-08-02), 10-Q (reporting date: 2019-05-03).
1 Q2 2025 Calculation
Working capital turnover
= (Net salesQ2 2025
+ Net salesQ1 2025
+ Net salesQ4 2024
+ Net salesQ3 2024)
÷ Working capital
= (10,210,361 + 9,914,021 + 9,858,514 + 9,694,082)
÷ 1,583,055 = 25.06
2 Click competitor name to see calculations.
- Working Capital
- The working capital exhibits considerable fluctuations over the observed periods. Initially, it ranged between approximately $562 million and $627 million up to early 2020, followed by a substantial increase, reaching over $2.18 billion in mid-2020. Subsequently, a declining trend is noticeable, bottoming out at a negative figure of approximately -$215 thousand in early 2022. After this nadir, working capital recovers and grows steadily, peaking near $2.38 billion in early 2024 before slightly declining in the most recent quarters.
- Net Sales
- Net sales demonstrate a generally positive trajectory throughout the periods. Starting at around $6.6 billion in mid-2019, sales steadily rise, exceeding $8.4 billion by mid-2020. The growth trend continues with some short-term volatility, reaching approximately $10.2 billion by mid-2024. This pattern suggests consistent expansion in revenue, with occasional periods of stabilization or modest decline.
- Working Capital Turnover
- Working capital turnover shows highly variable patterns. It begins with moderate ratios between 41.68 and 48.44 up to early 2020, then drops dramatically to a range between approximately 13.76 and 28.04 in mid to late 2020. Following that, a sharp increase occurs, with turnover peaking at an unusually high value of 304.43 at one point, indicative of a very low or negative working capital position relative to sales. Subsequently, turnover ratios stabilize somewhat, fluctuating between 16.3 and 30.11 in the most recent periods, suggesting an adjustment to a more typical relationship between working capital and net sales.
- Overall Insights
- The financial data indicate volatility in working capital, which contrasts with steady growth in net sales. The periods of negative or very low working capital align with spikes in turnover ratios, reflecting potential liquidity or operational efficiency challenges. However, recovery in working capital levels and normalization of turnover ratios in later periods suggest corrective measures or improved management of current assets and liabilities. The consistent rise in net sales underscores strong market demand or successful business expansion despite fluctuations in working capital metrics.
Average Inventory Processing Period
Dollar General Corp., average inventory processing period calculation (quarterly data)
| Aug 2, 2024 | May 3, 2024 | Feb 2, 2024 | Nov 3, 2023 | Aug 4, 2023 | May 5, 2023 | Feb 3, 2023 | Oct 28, 2022 | Jul 29, 2022 | Apr 29, 2022 | Jan 28, 2022 | Oct 29, 2021 | Jul 30, 2021 | Apr 30, 2021 | Jan 29, 2021 | Oct 30, 2020 | Jul 31, 2020 | May 1, 2020 | Jan 31, 2020 | Nov 1, 2019 | Aug 2, 2019 | May 3, 2019 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data | |||||||||||||||||||||||||||||
| Inventory turnover | 3.99 | 3.97 | 3.86 | 3.68 | 3.55 | 3.60 | 3.85 | 3.49 | 3.49 | 3.91 | 4.17 | 4.37 | 4.33 | 4.48 | 4.39 | 4.42 | 4.90 | 4.99 | 4.12 | 4.22 | 4.20 | 4.43 | |||||||
| Short-term Activity Ratio (no. days) | |||||||||||||||||||||||||||||
| Average inventory processing period1 | 92 | 92 | 95 | 99 | 103 | 101 | 95 | 105 | 104 | 93 | 88 | 84 | 84 | 82 | 83 | 83 | 74 | 73 | 89 | 87 | 87 | 82 | |||||||
| Benchmarks (no. days) | |||||||||||||||||||||||||||||
| Average Inventory Processing Period, Competitors2 | |||||||||||||||||||||||||||||
| Costco Wholesale Corp. | 30 | 34 | 31 | 29 | 29 | 31 | 29 | 29 | 28 | 33 | 33 | 34 | 33 | 35 | 30 | 31 | 33 | 36 | — | — | — | — | |||||||
| Target Corp. | 60 | 56 | 56 | 69 | 58 | 56 | 60 | 77 | 70 | 72 | 68 | 75 | 59 | 56 | 59 | 74 | 54 | 55 | — | — | — | — | |||||||
| Walmart Inc. | 40 | 41 | 41 | 48 | 43 | 44 | 45 | 52 | 49 | 52 | 48 | 49 | 41 | 40 | 39 | 46 | 37 | 37 | — | — | — | — | |||||||
Based on: 10-Q (reporting date: 2024-08-02), 10-Q (reporting date: 2024-05-03), 10-K (reporting date: 2024-02-02), 10-Q (reporting date: 2023-11-03), 10-Q (reporting date: 2023-08-04), 10-Q (reporting date: 2023-05-05), 10-K (reporting date: 2023-02-03), 10-Q (reporting date: 2022-10-28), 10-Q (reporting date: 2022-07-29), 10-Q (reporting date: 2022-04-29), 10-K (reporting date: 2022-01-28), 10-Q (reporting date: 2021-10-29), 10-Q (reporting date: 2021-07-30), 10-Q (reporting date: 2021-04-30), 10-K (reporting date: 2021-01-29), 10-Q (reporting date: 2020-10-30), 10-Q (reporting date: 2020-07-31), 10-Q (reporting date: 2020-05-01), 10-K (reporting date: 2020-01-31), 10-Q (reporting date: 2019-11-01), 10-Q (reporting date: 2019-08-02), 10-Q (reporting date: 2019-05-03).
1 Q2 2025 Calculation
Average inventory processing period = 365 ÷ Inventory turnover
= 365 ÷ 3.99 = 92
2 Click competitor name to see calculations.
Over the analyzed period, the inventory turnover ratio exhibits a notable declining trend. Initially, values hover around the range of approximately 4.4 to 4.2, indicating relatively efficient inventory management. However, from early 2020 onward, there is a gradual decrease observed, with the ratio dipping below 4.0 after mid-2022 and stabilizing near 4.0 towards the end of the observed timeframe. This decline suggests a slower rate at which inventory is being sold and replenished, potentially indicating changes in sales velocity or inventory management practices.
Correspondingly, the average inventory processing period, measured in days, demonstrates an inverse relationship with inventory turnover. Early values show inventory being processed in the low to mid-80s range of days, reflecting a relatively swift turnover. As time progresses, the processing period extends significantly, reaching a peak exceeding 100 days around mid-to-late 2022. Following this peak, there is a moderate reduction in the processing period, returning to the low 90s by mid-2024.
- Inventory Turnover Ratio
- Initially stable around 4.2 to 4.4.
- Declines steadily from early 2020, reaching lows near 3.5 in late 2022.
- Subsequently shows slight improvement, ending near 4.0 in mid-2024.
- Indicates slower conversion of inventory into sales over time with partial recovery.
- Average Inventory Processing Period (days)
- Starts around 82-89 days, denoting efficient inventory handling.
- Increases steadily, peaking at approximately 105 days in late 2022.
- Declines somewhat thereafter, settling in the low 90s by mid-2024.
- Suggests lengthened inventory holding times that partially normalize later.
The inverse pattern between these two measures aligns with expectations, as lower turnover ratios correspond to longer processing periods. The peak in days inventory processed may suggest periods of inventory buildup or slower sales, which could be influenced by market conditions, supply chain factors, or strategic inventory decisions. The slight recovery in turnover and reduction in processing days in the latter periods indicates efforts to improve inventory movement or stabilization in sales trends.
Average Payables Payment Period
Dollar General Corp., average payables payment period calculation (quarterly data)
| Aug 2, 2024 | May 3, 2024 | Feb 2, 2024 | Nov 3, 2023 | Aug 4, 2023 | May 5, 2023 | Feb 3, 2023 | Oct 28, 2022 | Jul 29, 2022 | Apr 29, 2022 | Jan 28, 2022 | Oct 29, 2021 | Jul 30, 2021 | Apr 30, 2021 | Jan 29, 2021 | Oct 30, 2020 | Jul 31, 2020 | May 1, 2020 | Jan 31, 2020 | Nov 1, 2019 | Aug 2, 2019 | May 3, 2019 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data | |||||||||||||||||||||||||||||
| Payables turnover | 7.21 | 7.92 | 7.52 | 7.41 | 7.27 | 7.18 | 7.32 | 6.04 | 5.56 | 6.09 | 6.26 | 6.55 | 6.79 | 6.93 | 6.37 | 5.90 | 6.33 | 6.94 | 6.73 | 6.67 | 6.80 | 7.42 | |||||||
| Short-term Activity Ratio (no. days) | |||||||||||||||||||||||||||||
| Average payables payment period1 | 51 | 46 | 49 | 49 | 50 | 51 | 50 | 60 | 66 | 60 | 58 | 56 | 54 | 53 | 57 | 62 | 58 | 53 | 54 | 55 | 54 | 49 | |||||||
| Benchmarks (no. days) | |||||||||||||||||||||||||||||
| Average Payables Payment Period, Competitors2 | |||||||||||||||||||||||||||||
| Costco Wholesale Corp. | 29 | 35 | 32 | 31 | 29 | 35 | 30 | 30 | 29 | 33 | 33 | 34 | 34 | 40 | 35 | 35 | 34 | 41 | — | — | — | — | |||||||
| Target Corp. | 60 | 55 | 57 | 67 | 56 | 53 | 60 | 70 | 68 | 67 | 75 | 82 | 66 | 62 | 71 | 83 | 65 | 61 | — | — | — | — | |||||||
| Walmart Inc. | 41 | 41 | 42 | 46 | 43 | 42 | 42 | 46 | 45 | 45 | 47 | 49 | 43 | 42 | 43 | 48 | 41 | 40 | — | — | — | — | |||||||
Based on: 10-Q (reporting date: 2024-08-02), 10-Q (reporting date: 2024-05-03), 10-K (reporting date: 2024-02-02), 10-Q (reporting date: 2023-11-03), 10-Q (reporting date: 2023-08-04), 10-Q (reporting date: 2023-05-05), 10-K (reporting date: 2023-02-03), 10-Q (reporting date: 2022-10-28), 10-Q (reporting date: 2022-07-29), 10-Q (reporting date: 2022-04-29), 10-K (reporting date: 2022-01-28), 10-Q (reporting date: 2021-10-29), 10-Q (reporting date: 2021-07-30), 10-Q (reporting date: 2021-04-30), 10-K (reporting date: 2021-01-29), 10-Q (reporting date: 2020-10-30), 10-Q (reporting date: 2020-07-31), 10-Q (reporting date: 2020-05-01), 10-K (reporting date: 2020-01-31), 10-Q (reporting date: 2019-11-01), 10-Q (reporting date: 2019-08-02), 10-Q (reporting date: 2019-05-03).
1 Q2 2025 Calculation
Average payables payment period = 365 ÷ Payables turnover
= 365 ÷ 7.21 = 51
2 Click competitor name to see calculations.
- Payables Turnover Ratio Trends
- The payables turnover ratio exhibited variability over the observed quarters. Starting at 7.42 in early May 2019, it declined progressively until reaching a low of around 5.56 in late October 2022. Thereafter, the ratio recovered and demonstrated an upward trend, peaking at 7.92 in early August 2024 before a slight decline to 7.21 in the subsequent period. This pattern indicates fluctuations in the efficiency with which the company manages its payables, with a notable dip during the 2021-2022 timeframe followed by improvement into 2023 and 2024.
- Average Payables Payment Period Trends
- The average payables payment period, expressed in days, moved in an inverse pattern relative to the turnover ratio. Initially at 49 days in May 2019, the payment period increased steadily to reach a peak of 66 days in late October 2022, indicating a longer duration before settling obligations. From that peak, the period shortened noticeably to 46 days by early August 2024, then slightly increased to 51 days in the subsequent period. This suggests the company extended payment terms through 2021 and 2022, then returned to faster payments in 2023 and 2024.
- Interpretation of the Relationship Between Measures
- The inverse relationship between payables turnover and average payment days is consistent with typical financial behavior: as the turnover decreases, the payment period lengthens, and vice versa. The extension of payment periods during 2021 and 2022 may reflect strategic cash management or external factors affecting payment speed, while the subsequent improvement indicates a shift towards quicker payments or improved operational efficiency.
- Overall Insights
- Overall, the data reveals a period of looser payables management centered around late 2021 through 2022, potentially indicating a response to business conditions or liquidity management strategies. The return to higher turnover ratios and shorter payment periods from 2023 onwards suggests enhanced financial discipline or operational improvements in managing supplier payables.