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-K (reporting date: 2024-02-03), 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).
The analysis of financial ratios over the six-year period reveals several notable trends in operational efficiency and working capital management.
- Inventory Turnover
- The inventory turnover ratio generally increased from 4.78 in 2019 to a peak of 6.67 in 2023, before slightly declining to 6.29 in 2024. This indicates a marked improvement in inventory management efficiency, suggesting faster movement of inventory over time, with a minor reduction in the most recent year.
- Receivables Turnover
- Receivables turnover experienced a decline from 61.74 in 2019 down to 38.51 in 2023, then rebounded sharply to 57.94 in 2024. This pattern suggests a deterioration in receivables collection efficiency for several years, followed by a significant recovery in the latest period, implying stronger credit control or faster collection practices recently.
- Payables Turnover
- The payables turnover ratio more than doubled from 5.68 in 2019 to 11.97 in 2020, remaining relatively stable around 9 to 12 thereafter, with a peak again at 12.28 in 2024. This implies the company has been paying its suppliers more quickly compared to 2019, indicating tighter payables management or improved supplier terms.
- Working Capital Turnover
- This ratio showed a substantial increase from 8.75 in 2019 to a very high 24.41 in 2021, followed by a sharp decline to lows around 4.83-6.02 in subsequent years. This instability suggests that working capital was very efficiently used at its peak, but in recent years, the efficiency of generating revenue relative to working capital invested has diminished considerably.
- Average Inventory Processing Period
- The number of days to process inventory decreased steadily from 76 days in 2019 to a low of 55 days in 2023, reflecting faster inventory turnover. There was a slight increase to 58 days in 2024, consistent with the minor dip seen in the inventory turnover ratio during that year.
- Average Receivable Collection Period
- This period lengthened from 6 days in 2019 to 9 days from 2021 through 2023, then shortened sharply back to 6 days in 2024. This trend aligns with the fluctuations in receivables turnover, evidencing slower collection in the middle years and improved efficiency in collections most recently.
- Operating Cycle
- The operating cycle, representing the sum of inventory processing and receivables collection periods, decreased from 82 days in 2019 to 64 days by 2023 and remained steady into 2024. The reduction indicates enhanced overall operating efficiency relative to working capital.
- Average Payables Payment Period
- The average payables period shortened notably from 64 days in 2019 to around 30 days in 2020 and 2024, with some variation in-between. This suggests that the company accelerated payments to suppliers starting in 2020, which can have implications for supplier relationships and cash outflow timing.
- Cash Conversion Cycle
- The cash conversion cycle exhibited volatility, increasing from 18 days in 2019 to a peak of 47 days in 2020, then fluctuating around the 20-40 days range in later years. A lower cash conversion cycle generally indicates improved liquidity management, but the variability suggests occasional challenges in synchronizing cash inflows and outflows.
Overall, the data illustrates a dynamic approach to managing inventory, receivables, and payables with periods of strong operational efficiency interrupted by phases of reduced effectiveness. Recent improvements in receivables collection and inventory turnover have contributed to a shortened operating cycle, although working capital turnover has declined from its peak, signaling potential shifts in asset utilization. The company’s shortened payables payment period contrasts with earlier years, reflecting an emphasis on quicker supplier payments. Ongoing fluctuations in the cash conversion cycle highlight ongoing efforts to optimize cash flow management.
Turnover Ratios
Average No. Days
Inventory Turnover
Feb 3, 2024 | Jan 28, 2023 | Jan 29, 2022 | Jan 30, 2021 | Feb 1, 2020 | Feb 2, 2019 | ||
---|---|---|---|---|---|---|---|
Selected Financial Data (US$ in thousands) | |||||||
Cost of sales | |||||||
Merchandise inventories, net | |||||||
Short-term Activity Ratio | |||||||
Inventory turnover1 | |||||||
Benchmarks | |||||||
Inventory Turnover, Competitors2 | |||||||
Amazon.com Inc. | |||||||
Home Depot Inc. | |||||||
Lowe’s Cos. Inc. | |||||||
TJX Cos. Inc. | |||||||
Inventory Turnover, Sector | |||||||
Consumer Discretionary Distribution & Retail | |||||||
Inventory Turnover, Industry | |||||||
Consumer Discretionary |
Based on: 10-K (reporting date: 2024-02-03), 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).
1 2024 Calculation
Inventory turnover = Cost of sales ÷ Merchandise inventories, net
= ÷ =
2 Click competitor name to see calculations.
- Cost of Sales
- The cost of sales demonstrates a fluctuating trend over the six-year period. It started at 5,977,200 thousand US dollars in 2019, declining significantly to 3,830,300 thousand US dollars by 2021. There was a rebound in 2022 to 4,662,900 thousand US dollars, followed by a slight decrease in the subsequent years, ending at 3,978,600 thousand US dollars in 2024. This pattern indicates variable sales activity and possible changes in product mix or pricing strategies.
- Merchandise Inventories, Net
- Net merchandise inventories show a general downward trend with some variability. The value dropped from 1,250,500 thousand US dollars in 2019 to a low of 602,500 thousand US dollars in 2021. This was followed by a rise to 915,000 thousand US dollars in 2022 but then decreased again in 2023 and 2024, ending at 632,500 thousand US dollars. This suggests efforts to manage inventory levels, potentially optimizing stock in response to sales fluctuations and market demand.
- Inventory Turnover
- The inventory turnover ratio improved overall during the period, starting at 4.78 in 2019 and increasing to a peak of 6.67 in 2023 before slightly declining to 6.29 in 2024. The ratio indicates enhanced efficiency in inventory management, with the company turning over its inventory more rapidly over time, reflecting better alignment of stock levels with sales or improved supply chain operations.
Receivables Turnover
Feb 3, 2024 | Jan 28, 2023 | Jan 29, 2022 | Jan 30, 2021 | Feb 1, 2020 | Feb 2, 2019 | ||
---|---|---|---|---|---|---|---|
Selected Financial Data (US$ in thousands) | |||||||
Net sales | |||||||
Receivables, net of allowance | |||||||
Short-term Activity Ratio | |||||||
Receivables turnover1 | |||||||
Benchmarks | |||||||
Receivables Turnover, Competitors2 | |||||||
Amazon.com Inc. | |||||||
Home Depot Inc. | |||||||
Lowe’s Cos. Inc. | |||||||
TJX Cos. Inc. | |||||||
Receivables Turnover, Sector | |||||||
Consumer Discretionary Distribution & Retail | |||||||
Receivables Turnover, Industry | |||||||
Consumer Discretionary |
Based on: 10-K (reporting date: 2024-02-03), 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).
1 2024 Calculation
Receivables turnover = Net sales ÷ Receivables, net of allowance
= ÷ =
2 Click competitor name to see calculations.
- Net Sales
-
Net sales exhibited a general declining trend over the six-year period analyzed. Starting at 8,285,300 US dollars in February 2019, there was a significant reduction to 5,272,800 US dollars by February 2024. The most notable declines occurred between 2019 and 2021, after which net sales experienced minor fluctuations but did not recover to earlier levels.
- Receivables, Net of Allowance
-
Receivables showed variability without a clear trend. From 134,200 thousand US dollars in 2019, the value decreased to the lowest point of 105,300 thousand US dollars in 2021, followed by an increase to 153,900 thousand US dollars in 2023. In 2024, receivables sharply declined to 91,000 thousand US dollars, the lowest in the observed period.
- Receivables Turnover Ratio
-
The receivables turnover ratio showed an overall decreasing pattern from 2019 to 2023, dropping from 61.74 to 38.51. This indicates a slower collection of receivables over time, which could imply a lengthening of the credit collection period or challenges in receivable management. However, in 2024, the ratio rebounded significantly to 57.94, suggesting an improvement in the efficiency of collecting receivables.
- Summary of Observations
-
The data suggest that the company faced declining sales revenue over the years, which may have impacted overall financial performance. Receivables fluctuated, initially decreasing but then spiking before falling sharply, pointing to variability in credit sales or collection policy changes. The decline in receivables turnover from 2019 through 2023 implies potential inefficiencies in receivables management, although the recent improvement in 2024 suggests corrective actions or improved cash collection processes. These trends highlight areas for closer financial monitoring and potential operational adjustments.
Payables Turnover
Feb 3, 2024 | Jan 28, 2023 | Jan 29, 2022 | Jan 30, 2021 | Feb 1, 2020 | Feb 2, 2019 | ||
---|---|---|---|---|---|---|---|
Selected Financial Data (US$ in thousands) | |||||||
Cost of sales | |||||||
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. | |||||||
Payables Turnover, Sector | |||||||
Consumer Discretionary Distribution & Retail | |||||||
Payables Turnover, Industry | |||||||
Consumer Discretionary |
Based on: 10-K (reporting date: 2024-02-03), 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).
1 2024 Calculation
Payables turnover = Cost of sales ÷ Accounts payable
= ÷ =
2 Click competitor name to see calculations.
The analysis focuses on the trends in cost of sales, accounts payable, and payables turnover over the six-year period ending in February 2024.
- Cost of Sales
- The cost of sales demonstrates a fluctuating but overall downward trend with some variability. Starting at approximately 5,977,200 thousand US dollars in early 2019, the cost significantly decreased to 4,557,300 thousand by early 2020, continuing to decline to 3,830,300 thousand in early 2021. It then experienced an increase in early 2022 to 4,662,900 thousand, followed by a slight decrease and stabilization around 4,555,100 thousand in early 2023, and thereafter declined again to approximately 3,978,600 thousand by early 2024. This pattern may reflect operational adjustments, changing sales volumes, or cost control efforts.
- Accounts Payable
- Accounts payable show a substantial reduction from 1,051,900 thousand US dollars in 2019 to 380,800 thousand in 2020, followed by a continued decline to 341,800 thousand in 2021. An upward trend is evident in 2022 and 2023, with balances rising to 471,000 thousand and 531,300 thousand respectively, suggesting an accumulation of payables. However, the figure drops again to 324,000 thousand in 2024. The fluctuations indicate variable supplier credit management or timing differences in payments.
- Payables Turnover Ratio
- The payables turnover ratio has demonstrated an overall increasing trend with some volatility, indicating changes in the rate at which the company settles its payables. Starting at a relatively low 5.68 in 2019, it surged to 11.97 in 2020, followed by a slight decline to 11.21 in 2021. The ratio decreased to 9.9 in 2022 and further to 8.57 in 2023 before rising again to a peak of 12.28 in 2024. The higher turnover ratio in 2024 suggests a faster payment cycle to suppliers compared to previous years.
In summary, the company appears to be managing its costs and payables with noticeable changes over the period. The cost of sales has gradually declined with interruptions, accounts payable have fluctuated indicating changes in payment patterns, and the payables turnover ratio reflects a general trend towards more rapid payment cycles in recent years. This combination of trends may point to evolving operational strategies and cash flow management practices.
Working Capital Turnover
Feb 3, 2024 | Jan 28, 2023 | Jan 29, 2022 | Jan 30, 2021 | Feb 1, 2020 | Feb 2, 2019 | ||
---|---|---|---|---|---|---|---|
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. | |||||||
Working Capital Turnover, Sector | |||||||
Consumer Discretionary Distribution & Retail | |||||||
Working Capital Turnover, Industry | |||||||
Consumer Discretionary |
Based on: 10-K (reporting date: 2024-02-03), 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).
1 2024 Calculation
Working capital turnover = Net sales ÷ Working capital
= ÷ =
2 Click competitor name to see calculations.
- Working Capital
- The working capital shows a fluctuating trend over the analyzed periods. It started at 946,600 thousand USD in early 2019, then significantly decreased to 396,000 thousand USD in 2020 and further down to 208,500 thousand USD in 2021. A strong recovery occurred in 2022, where working capital increased sharply to 1,244,100 thousand USD, followed by a slight decline in the two subsequent years, closing at 1,039,700 thousand USD in early 2024. This indicates variability in the company's short-term liquidity management.
- Net Sales
- Net sales demonstrate an overall declining trend across the six years. Starting from 8,285,300 thousand USD in early 2019, net sales dropped considerably to 6,466,000 thousand USD in 2020 and continued downward to 5,089,800 thousand USD in 2021. Although there was a moderate rebound in 2022 at 6,010,700 thousand USD, the sales figure again decreased to 5,927,200 thousand USD by 2023 and further declined to 5,272,800 thousand USD in early 2024. This implies a weakening sales performance and potential market challenges.
- Working Capital Turnover
- This ratio portrays significant volatility throughout the periods. Beginning with a relatively low ratio of 8.75 in 2019, it increased sharply to 16.33 in 2020 and peaked at 24.41 in 2021, indicating that net sales were high relative to working capital during these years. However, this ratio dropped sharply to 4.83 in 2022, and despite a slight increase to 6.02 in 2023, it declined again to 5.07 in 2024. The fluctuations suggest changing efficiency in using working capital to generate sales, with pronounced efficiency during lower working capital phases and reduced turnover when working capital surged.
Average Inventory Processing Period
Feb 3, 2024 | Jan 28, 2023 | Jan 29, 2022 | Jan 30, 2021 | Feb 1, 2020 | Feb 2, 2019 | ||
---|---|---|---|---|---|---|---|
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. | |||||||
Average Inventory Processing Period, Sector | |||||||
Consumer Discretionary Distribution & Retail | |||||||
Average Inventory Processing Period, Industry | |||||||
Consumer Discretionary |
Based on: 10-K (reporting date: 2024-02-03), 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).
1 2024 Calculation
Average inventory processing period = 365 ÷ Inventory turnover
= 365 ÷ =
2 Click competitor name to see calculations.
- Inventory Turnover Ratio
- The inventory turnover ratio demonstrated an overall positive trend from February 2019 through February 2024, increasing from 4.78 to a peak of 6.67 in January 2023 before slightly declining to 6.29 in February 2024. This suggests an improvement in the efficiency with which the inventory is being sold and replenished over the observed period, indicating better inventory management and potentially stronger sales performance in most years.
- Average Inventory Processing Period
- The average inventory processing period, which measures the number of days inventory remains before being sold, displayed a generally decreasing trend, falling from 76 days in February 2019 to a low of 55 days by January 2023. This shortening of the inventory processing period aligns with the increase in inventory turnover, reinforcing the notion that the company has become more efficient in moving its inventory. The value slightly increased to 58 days in February 2024, but remained substantially lower than the initial 2019 level.
- Overall Insights
- There is a clear inverse relationship between the inventory turnover ratio and the average inventory processing period, as expected. The improvements in inventory turnover and reductions in processing days until early 2023 indicate enhanced operational efficiency and possibly improved demand forecasting or product management. The minor decline in turnover and the slight increase in processing days in the most recent period may warrant further analysis to determine if these are early signs of emerging inefficiencies or market fluctuations.
Average Receivable Collection Period
Feb 3, 2024 | Jan 28, 2023 | Jan 29, 2022 | Jan 30, 2021 | Feb 1, 2020 | Feb 2, 2019 | ||
---|---|---|---|---|---|---|---|
Selected Financial Data | |||||||
Receivables turnover | |||||||
Short-term Activity Ratio (no. days) | |||||||
Average receivable collection period1 | |||||||
Benchmarks (no. days) | |||||||
Average Receivable Collection Period, Competitors2 | |||||||
Amazon.com Inc. | |||||||
Home Depot Inc. | |||||||
Lowe’s Cos. Inc. | |||||||
TJX Cos. Inc. | |||||||
Average Receivable Collection Period, Sector | |||||||
Consumer Discretionary Distribution & Retail | |||||||
Average Receivable Collection Period, Industry | |||||||
Consumer Discretionary |
Based on: 10-K (reporting date: 2024-02-03), 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).
1 2024 Calculation
Average receivable collection period = 365 ÷ Receivables turnover
= 365 ÷ =
2 Click competitor name to see calculations.
- Receivables Turnover
- The receivables turnover ratio exhibited a declining trend from 61.74 in 2019 to a low of 38.51 in 2023, indicating a reduction in the frequency with which receivables were collected during this period. This suggests a possible deterioration in the efficiency of credit and collection policies over these years. However, in 2024, there was a notable improvement, with the ratio rising sharply to 57.94. This rebound implies a significant enhancement in receivables management or perhaps changes in sales or credit policies.
- Average Receivable Collection Period
- The average collection period lengthened from 6 days in 2019 to 9 days in the years 2022 and 2023, reflecting slower collection of receivables. This lengthening aligns with the observed decrease in the receivables turnover ratio during the same timeframe, reinforcing the indication of reduced collection efficiency. In 2024, the collection period reduced back to 6 days, a return to earlier levels, supporting the observed improvement in receivables turnover and indicating an effective recovery in the company's credit and collection activities.
Operating Cycle
Feb 3, 2024 | Jan 28, 2023 | Jan 29, 2022 | Jan 30, 2021 | Feb 1, 2020 | Feb 2, 2019 | ||
---|---|---|---|---|---|---|---|
Selected Financial Data | |||||||
Average inventory processing period | |||||||
Average receivable collection period | |||||||
Short-term Activity Ratio | |||||||
Operating cycle1 | |||||||
Benchmarks | |||||||
Operating Cycle, Competitors2 | |||||||
Amazon.com Inc. | |||||||
Home Depot Inc. | |||||||
Lowe’s Cos. Inc. | |||||||
TJX Cos. Inc. | |||||||
Operating Cycle, Sector | |||||||
Consumer Discretionary Distribution & Retail | |||||||
Operating Cycle, Industry | |||||||
Consumer Discretionary |
Based on: 10-K (reporting date: 2024-02-03), 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).
1 2024 Calculation
Operating cycle = Average inventory processing period + Average receivable collection period
= + =
2 Click competitor name to see calculations.
- Average Inventory Processing Period
- The average inventory processing period showed a declining trend from 76 days in 2019 to 55 days in 2023, indicating an improvement in inventory turnover efficiency. However, there was a slight increase to 58 days in 2024, suggesting a modest slowdown compared to the previous year but still remaining below earlier years.
- Average Receivable Collection Period
- The average receivable collection period increased from 6 days in 2019 to 9 days in 2022 and 2023, indicating a lengthening in the time taken to collect receivables. In 2024, this period shortened back to 6 days, reflecting an improvement in receivables management after a few years of slower collections.
- Operating Cycle
- The operating cycle, representing the total time between inventory purchase and cash collection, decreased from 82 days in 2019 to 64 days in 2023 and remained stable in 2024. This overall reduction suggests enhanced operational efficiency over the five-year period, despite some fluctuations in the individual components.
Average Payables Payment Period
Feb 3, 2024 | Jan 28, 2023 | Jan 29, 2022 | Jan 30, 2021 | Feb 1, 2020 | Feb 2, 2019 | ||
---|---|---|---|---|---|---|---|
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. | |||||||
Average Payables Payment Period, Sector | |||||||
Consumer Discretionary Distribution & Retail | |||||||
Average Payables Payment Period, Industry | |||||||
Consumer Discretionary |
Based on: 10-K (reporting date: 2024-02-03), 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).
1 2024 Calculation
Average payables payment period = 365 ÷ Payables turnover
= 365 ÷ =
2 Click competitor name to see calculations.
- Payables Turnover
- The payables turnover ratio exhibits notable fluctuations over the six-year period. Initially, the ratio was relatively low at 5.68 in 2019, indicating a slower rate of paying off suppliers. A sharp increase occurred in 2020 to 11.97, representing a more rapid turnover of payables. Thereafter, the ratio slightly declined to 11.21 in 2021 and continued to trend downward to 9.9 in 2022, and further to 8.57 in 2023. However, in 2024, the ratio again rose substantially to 12.28. This pattern suggests periods of both accelerated and decelerated payment cycles, with the latest data indicating a renewed emphasis on paying suppliers more quickly.
- Average Payables Payment Period
- The average payables payment period inversely reflects the behavior observed in the turnover ratio. Beginning with a longer payment period of 64 days in 2019, there was a significant reduction to 30 days in 2020, corresponding with the peak in turnover ratio. In subsequent years, the payment period lengthened gradually to 33 days in 2021, 37 days in 2022, and 43 days in 2023, implying a relaxation in payment speed. In 2024, the payment period contracted back to 30 days, consistent with the increase in payables turnover, further confirming the company's movement towards settling obligations sooner in the most recent period.
- Insights and Trends
- The data reveal that the company has experienced variability in its management of payables over the analyzed timeframe. The significant decrease in payment days and corresponding rise in turnover in 2020 might be linked to a strategic shift or external factors influencing supplier payments. The gradual increase in payment period from 2021 to 2023 suggests a possible easing of payment pressure or change in credit terms, followed by a return to quicker payments in 2024. These fluctuations reflect an active management approach to balancing cash flow needs and supplier relationships.
Cash Conversion Cycle
Feb 3, 2024 | Jan 28, 2023 | Jan 29, 2022 | Jan 30, 2021 | Feb 1, 2020 | Feb 2, 2019 | ||
---|---|---|---|---|---|---|---|
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 | |||||||
Amazon.com Inc. | |||||||
Home Depot Inc. | |||||||
Lowe’s Cos. Inc. | |||||||
TJX Cos. Inc. | |||||||
Cash Conversion Cycle, Sector | |||||||
Consumer Discretionary Distribution & Retail | |||||||
Cash Conversion Cycle, Industry | |||||||
Consumer Discretionary |
Based on: 10-K (reporting date: 2024-02-03), 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).
1 2024 Calculation
Cash conversion cycle = Average inventory processing period + Average receivable collection period – Average payables payment period
= + – =
2 Click competitor name to see calculations.
- Average Inventory Processing Period
- The average inventory processing period exhibited some fluctuations over the years. It initially decreased from 76 days in 2019 to 57 days in 2021, suggesting an improvement in inventory turnover efficiency. However, there was an increase to 72 days in 2022, followed by a decline to 55 days in 2023, and a slight rise again to 58 days in 2024. Overall, the trend indicates efforts to optimize inventory management, albeit with periodic reversals.
- Average Receivable Collection Period
- The average receivable collection period remained relatively stable, varying between 6 and 9 days. It rose from 6 days in 2019 to 8-9 days across 2020 to 2023, indicating a longer time to collect receivables during this period, before improving back to 6 days in 2024. This suggests fluctuating but generally efficient credit collection processes over time.
- Average Payables Payment Period
- The average payables payment period showed significant variability. It dramatically decreased from 64 days in 2019 to 30 days in 2020, followed by slight increases to 33 days in 2021 and 37 days in 2022. It then increased further to 43 days in 2023 before dropping again to 30 days in 2024. These changes might reflect shifting supplier payment policies or cash management strategies.
- Cash Conversion Cycle
- The cash conversion cycle (CCC) displayed noticeable fluctuations. It increased sharply from 18 days in 2019 to 47 days in 2020, indicating a slower conversion of resources into cash. The CCC improved to 32 days in 2021 but rose again to 44 days in 2022. A significant improvement to 21 days occurred in 2023, followed by an increase to 34 days in 2024. This volatility suggests ongoing challenges in balancing inventory, receivables, and payables to optimize cash flow timing.