Activity ratios measure how efficiently a company performs day-to-day tasks, such us the collection of receivables and management of inventory.
Paying user area
Try for free
Home Depot Inc. pages available for free this week:
- Income Statement
- Statement of Comprehensive Income
- Common-Size Income Statement
- Analysis of Long-term (Investment) Activity Ratios
- Enterprise Value to FCFF (EV/FCFF)
- Price to FCFE (P/FCFE)
- Present Value of Free Cash Flow to Equity (FCFE)
- Selected Financial Data since 2005
- Operating Profit Margin since 2005
- Debt to Equity since 2005
The data is hidden behind: . Unhide it.
Get full access to the entire website from $10.42/mo, or
get 1-month access to Home Depot Inc. for $24.99.
This is a one-time payment. There is no automatic renewal.
We accept:
Short-term Activity Ratios (Summary)
Based on: 10-K (reporting date: 2025-02-02), 10-K (reporting date: 2024-01-28), 10-K (reporting date: 2023-01-29), 10-K (reporting date: 2022-01-30), 10-K (reporting date: 2021-01-31), 10-K (reporting date: 2020-02-02).
- Inventory Turnover
- The inventory turnover ratio exhibited fluctuations over the periods, starting at 5.00 in early 2020, reaching a peak of 5.25 in early 2021, before declining to a low of 4.20 in early 2023. It slightly improved to 4.85 in early 2024, but decreased again to 4.53 by early 2025. This suggests a general trend of reduced efficiency in inventory management with some intermittent improvements.
- Receivables Turnover
- The receivables turnover ratio showed a declining trend over the years, dropping from 52.34 in early 2020 to 44.15 and 44.12 in the next two years. There was a moderate rebound to 47.45 in early 2023, followed by a slight decrease and a more significant fall to 32.53 in early 2025. This pattern indicates increasing collection period challenges or credit extension to customers.
- Payables Turnover
- The payables turnover experienced variability, decreasing from 9.33 in early 2020 to around 7.45 in the early 2021 and 2022 periods, then rising notably to 9.14 and 10.13 in early 2023 and 2024 respectively. It slightly decreased to 8.90 by early 2025. This pattern reflects changes in payment practices or supplier terms, with a tendency to accelerate payments during the middle years followed by some moderation.
- Working Capital Turnover
- The working capital turnover ratio displayed extreme volatility, particularly the spike to 417.56 in early 2022, which is an outlier compared to other years. Apart from this abnormality, the values were relatively lower, fluctuating between 16.81 and 76.81 in other periods. The inconsistency indicates significant shifts or possibly anomalies in working capital management during the timeframe assessed.
- Average Inventory Processing Period
- The average inventory processing period initially improved slightly from 73 days in 2020 to 70 days in 2021, but subsequently lengthened to 80 and 87 days in 2022 and 2023, respectively. A slight improvement occurred in 2024 to 75 days, followed by an increase to 81 days in 2025. The trend suggests increasing time required to process inventory, signaling potential issues in turnover efficiency or stock management.
- Average Receivable Collection Period
- This period was relatively stable at 7 to 8 days from 2020 to 2024, indicating consistent collection practices. However, it extended to 11 days in 2025, reflecting a potentially slower collection cycle or more lenient credit policies in the most recent period.
- Operating Cycle
- The operating cycle, combining inventory processing and receivables collection periods, showed an overall increasing trend. Starting at 80 days in 2020, it fluctuated moderately before rising to 95 days in early 2023, then decreasing to 83 days in 2024, and increasing again to 92 days by early 2025. This indicates lengthening of the time required to convert inventory and receivables into cash, signaling reduced operational efficiency.
- Average Payables Payment Period
- The average payables payment period declined from 39 days in 2020 to 36 days in 2024, with some oscillations such as peaks at 49 days in 2021 and 2022, and a rise to 41 days in 2025. This pattern suggests varying payment strategies to suppliers, with some years reflecting slower payments and others faster settlements.
- Cash Conversion Cycle
- The cash conversion cycle showed fluctuations, declining sharply from 41 days in 2020 to 29 days in 2021, rising back to 39 days in 2022, peaking at 55 days in 2023, then decreasing to 47 days in 2024 and slightly increasing to 51 days in 2025. These changes point to inconsistent efficiency in converting resources into cash, with periods of improved liquidity management followed by setbacks.
Turnover Ratios
Average No. Days
Inventory Turnover
Feb 2, 2025 | Jan 28, 2024 | Jan 29, 2023 | Jan 30, 2022 | Jan 31, 2021 | Feb 2, 2020 | ||
---|---|---|---|---|---|---|---|
Selected Financial Data (US$ in millions) | |||||||
Cost of sales | |||||||
Merchandise inventories | |||||||
Short-term Activity Ratio | |||||||
Inventory turnover1 | |||||||
Benchmarks | |||||||
Inventory Turnover, Competitors2 | |||||||
Amazon.com 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: 2025-02-02), 10-K (reporting date: 2024-01-28), 10-K (reporting date: 2023-01-29), 10-K (reporting date: 2022-01-30), 10-K (reporting date: 2021-01-31), 10-K (reporting date: 2020-02-02).
1 2025 Calculation
Inventory turnover = Cost of sales ÷ Merchandise inventories
= ÷ =
2 Click competitor name to see calculations.
- Cost of Sales
- The cost of sales exhibited an overall increasing trend from 72,653 million US dollars in the fiscal year ending February 2, 2020, to 106,206 million US dollars projected for February 2, 2025. Notably, there was a significant rise between 2020 and 2021, with the cost increasing by approximately 20%, followed by more moderate increases in the subsequent years. A slight decline is observed in the fiscal year ending January 28, 2024, before rising again in the forecasted year.
- Merchandise Inventories
- Merchandise inventories increased substantially over the period analyzed, starting at 14,531 million US dollars in early 2020 and reaching an expected 23,451 million by 2025. Inventory levels increased markedly through 2022 and 2023, peaking at 24,886 million units, followed by a decline in 2024 before another increase in the projected 2025 period. This pattern indicates efforts to build inventory levels mid-way, potentially to meet anticipated demand or in response to supply chain considerations.
- Inventory Turnover Ratio
- The inventory turnover ratio declined from 5.0 in early 2020 to 4.2 by the fiscal year ending January 29, 2023, indicating slower inventory movement relative to sales over this period. There was a rebound to 4.85 in 2024, followed by a decrease again to 4.53 in the projection for 2025. This fluctuation suggests periods of reduced efficiency in inventory management, possibly linked to changes in demand or stock handling strategies, although some correction is indicated in the penultimate year.
- Overall Insights
- The data reflects a company experiencing growth in cost of sales and inventory levels consistent with scaling operations or increasing sales volumes. However, the drop and variance in inventory turnover ratio suggest challenges in maintaining inventory efficiency over the years. The inventory turnover ratio trends are somewhat misaligned with the cost of sales growth, indicating that while sales are increasing, inventory is accumulating at a relatively higher pace than sales turnover during several years. This calls for focused inventory management to optimize stock levels and improve turnover, potentially enhancing working capital efficiency.
Receivables Turnover
Feb 2, 2025 | Jan 28, 2024 | Jan 29, 2023 | Jan 30, 2022 | Jan 31, 2021 | Feb 2, 2020 | ||
---|---|---|---|---|---|---|---|
Selected Financial Data (US$ in millions) | |||||||
Net sales | |||||||
Receivables, net | |||||||
Short-term Activity Ratio | |||||||
Receivables turnover1 | |||||||
Benchmarks | |||||||
Receivables Turnover, Competitors2 | |||||||
Amazon.com 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: 2025-02-02), 10-K (reporting date: 2024-01-28), 10-K (reporting date: 2023-01-29), 10-K (reporting date: 2022-01-30), 10-K (reporting date: 2021-01-31), 10-K (reporting date: 2020-02-02).
1 2025 Calculation
Receivables turnover = Net sales ÷ Receivables, net
= ÷ =
2 Click competitor name to see calculations.
- Net Sales
- Net sales demonstrated an overall upward trend from 2020 through 2025, increasing from approximately $110.2 billion in 2020 to about $159.5 billion in 2025. The growth was steady, with a significant jump observed between 2020 and 2021, and continued increases through 2023. A slight dip occurred in 2024 before rebounding in 2025.
- Receivables, Net
- The net receivables balance increased consistently over the period, rising from $2.1 billion in 2020 to $4.9 billion in 2025. Apart from a minor decrease from 2022 to 2023, the trend indicates an expanding receivables base that nearly doubled over five years, suggesting either a growth in credit sales or changes in collection policies.
- Receivables Turnover
- The receivables turnover ratio, which measures how efficiently receivables are collected, showed variability over the years. It started at a high of 52.34 in 2020, declined significantly in 2021 and 2022 to around 44, then improved to 47.45 in 2023 before a gradual decline to 32.53 by 2025. This decreasing trend in later years suggests a slowing in the efficiency of collecting receivables despite the increase in net sales and receivables.
Payables Turnover
Feb 2, 2025 | Jan 28, 2024 | Jan 29, 2023 | Jan 30, 2022 | Jan 31, 2021 | Feb 2, 2020 | ||
---|---|---|---|---|---|---|---|
Selected Financial Data (US$ in millions) | |||||||
Cost of sales | |||||||
Accounts payable | |||||||
Short-term Activity Ratio | |||||||
Payables turnover1 | |||||||
Benchmarks | |||||||
Payables Turnover, Competitors2 | |||||||
Amazon.com 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: 2025-02-02), 10-K (reporting date: 2024-01-28), 10-K (reporting date: 2023-01-29), 10-K (reporting date: 2022-01-30), 10-K (reporting date: 2021-01-31), 10-K (reporting date: 2020-02-02).
1 2025 Calculation
Payables turnover = Cost of sales ÷ Accounts payable
= ÷ =
2 Click competitor name to see calculations.
- Cost of Sales
- The cost of sales exhibits a generally increasing trend over the analyzed periods. Starting at 72,653 million US dollars in February 2020, it rose sharply to 87,257 million by January 2021, continuing its upward trajectory to 100,325 million in January 2022 and peaking at 104,625 million in January 2023. Although there was a slight decline to 101,709 million in January 2024, the cost of sales rose again to 106,206 million by February 2025. This overall increase indicates growing operational activities or higher input costs over the years.
- Accounts Payable
- Accounts payable showed an upward trend initially, increasing from 7,787 million US dollars in February 2020 to a peak of 13,462 million in January 2022. Subsequently, the value decreased to 11,443 million in January 2023 and further declined to 10,037 million by January 2024. However, in the most recent period, February 2025, accounts payable rose again to 11,938 million. This pattern may reflect fluctuations in supplier payment policies or changes in purchasing volumes.
- Payables Turnover Ratio
- The payables turnover ratio started relatively high at 9.33 in February 2020 but declined sharply to 7.52 in January 2021 and remained relatively stable at 7.45 in January 2022. It then increased notably to 9.14 in January 2023, followed by a further rise to 10.13 in January 2024, suggesting improved efficiency in paying suppliers. The ratio then dipped to 8.9 in February 2025, indicating a slight reduction in payment speed compared to the previous year, but still higher than the early periods.
Working Capital Turnover
Feb 2, 2025 | Jan 28, 2024 | Jan 29, 2023 | Jan 30, 2022 | Jan 31, 2021 | Feb 2, 2020 | ||
---|---|---|---|---|---|---|---|
Selected Financial Data (US$ in millions) | |||||||
Current assets | |||||||
Less: Current liabilities | |||||||
Working capital | |||||||
Net sales | |||||||
Short-term Activity Ratio | |||||||
Working capital turnover1 | |||||||
Benchmarks | |||||||
Working Capital Turnover, Competitors2 | |||||||
Amazon.com 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: 2025-02-02), 10-K (reporting date: 2024-01-28), 10-K (reporting date: 2023-01-29), 10-K (reporting date: 2022-01-30), 10-K (reporting date: 2021-01-31), 10-K (reporting date: 2020-02-02).
1 2025 Calculation
Working capital turnover = Net sales ÷ Working capital
= ÷ =
2 Click competitor name to see calculations.
- Working Capital
- The working capital values exhibit notable fluctuations over the observed periods. Initially, there is a moderate amount of 1,435 million USD in early 2020, followed by a substantial increase to 5,311 million USD in early 2021. This is succeeded by a sharp decline to 362 million USD in early 2022. Subsequently, working capital rises significantly to 9,361 million USD in early 2023, reduces to 7,760 million USD in early 2024, and then drops again to 3,022 million USD in early 2025. This pattern suggests volatility in short-term liquidity management or asset-liability adjustments during these years.
- Net Sales
- Net sales demonstrate a consistent upward trend across the periods with minor deviations. Starting at 110,225 million USD in early 2020, net sales increase steadily to 132,110 million USD in early 2021, 151,157 million USD in early 2022, and 157,403 million USD in early 2023. There is a slight dip to 152,669 million USD in early 2024, followed by an increase to 159,514 million USD in early 2025. Despite a minor decrease, the overall trend indicates growth in revenue generation over the years.
- Working Capital Turnover
- The working capital turnover ratio shows significant volatility throughout the timeline. It starts at a high level of 76.81 in early 2020, followed by a decline to 24.87 in early 2021. A dramatic spike is observed in early 2022 with a ratio of 417.56, which then sharply decreases to 16.81 in early 2023 and remains relatively low at 19.67 in early 2024. A considerable increase is seen again in early 2025 with a ratio of 52.78. These fluctuations suggest irregular efficiency in utilizing working capital to generate sales, possibly influenced by the abrupt changes in working capital levels noted earlier.
- Summary of Trends and Insights
- The financial data reveals substantial variability in working capital and its turnover ratio, contrasting with a more steadily increasing net sales trend. The inconsistency in working capital levels and corresponding turnover ratios could indicate challenges in managing short-term assets and liabilities efficiently. Meanwhile, the net sales trend reflects continued market demand and revenue growth. The relationship between fluctuating working capital and more stable sales growth may warrant further investigation to optimize operational efficiency and liquidity management.
Average Inventory Processing Period
Feb 2, 2025 | Jan 28, 2024 | Jan 29, 2023 | Jan 30, 2022 | Jan 31, 2021 | Feb 2, 2020 | ||
---|---|---|---|---|---|---|---|
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. | |||||||
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: 2025-02-02), 10-K (reporting date: 2024-01-28), 10-K (reporting date: 2023-01-29), 10-K (reporting date: 2022-01-30), 10-K (reporting date: 2021-01-31), 10-K (reporting date: 2020-02-02).
1 2025 Calculation
Average inventory processing period = 365 ÷ Inventory turnover
= 365 ÷ =
2 Click competitor name to see calculations.
The financial data reveals several notable trends regarding inventory management over the analyzed periods. The inventory turnover ratio, which indicates how many times inventory is sold and replaced over a period, demonstrates a general pattern of decline after initially experiencing a slight increase. Starting at 5.00 in February 2020, it rose to 5.25 by January 2021, then progressively decreased to 4.55 in January 2022 and further to 4.20 in January 2023. A minor recovery is seen in January 2024 at 4.85; however, it decreased again to 4.53 by February 2025.
Concurrently, the average inventory processing period, representing the average number of days inventory remains before being sold, displays an inverse trend compared to inventory turnover, as expected. The period initially decreased from 73 days in February 2020 to 70 days in January 2021, indicating faster inventory movement. However, this trend reversed notably, increasing to 80 days by January 2022 and further reaching 87 days in January 2023, which suggests slower inventory processing. The processing period then decreases to 75 days in January 2024 but rises again to 81 days by February 2025.
These trends suggest that after an initial improvement in inventory efficiency between 2020 and 2021, the company experienced challenges in maintaining that momentum, leading to reduced inventory turnover and longer processing times in subsequent years. The slight improvement in 2024 indicates some operational adjustments but this was not sustained through 2025. Such fluctuations may reflect changes in demand, supply chain disruptions, or inventory management strategies affecting the company's operational efficiency.
Average Receivable Collection Period
Feb 2, 2025 | Jan 28, 2024 | Jan 29, 2023 | Jan 30, 2022 | Jan 31, 2021 | Feb 2, 2020 | ||
---|---|---|---|---|---|---|---|
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. | |||||||
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: 2025-02-02), 10-K (reporting date: 2024-01-28), 10-K (reporting date: 2023-01-29), 10-K (reporting date: 2022-01-30), 10-K (reporting date: 2021-01-31), 10-K (reporting date: 2020-02-02).
1 2025 Calculation
Average receivable collection period = 365 ÷ Receivables turnover
= 365 ÷ =
2 Click competitor name to see calculations.
- Receivables Turnover Trend
- The receivables turnover ratio demonstrates a downward trend over the analyzed periods. It decreased from 52.34 in February 2020 to 32.53 in February 2025, indicating that the frequency with which receivables are collected has declined over time. A notable drop occurred between January 2024 and February 2025, where the ratio fell sharply from 45.87 to 32.53.
- Average Receivable Collection Period Trend
- The average receivable collection period reflects an inverse pattern to the receivables turnover ratio. It remained relatively stable at around 7 to 8 days from February 2020 through January 2024 but increased to 11 days by February 2025. This suggests that it took longer to collect receivables in the most recent period, pointing to a potential slowing in cash inflows from credit sales.
- Overall Insights
- The data indicates a gradual decrease in receivables efficiency over the five-year span. The extended collection period and lower turnover ratio may imply changes in credit policy, customer payment behavior, or economic factors affecting collection. The most recent year's significant shift warrants closer monitoring to assess its impact on liquidity and working capital management.
Operating Cycle
Feb 2, 2025 | Jan 28, 2024 | Jan 29, 2023 | Jan 30, 2022 | Jan 31, 2021 | Feb 2, 2020 | ||
---|---|---|---|---|---|---|---|
Selected Financial Data | |||||||
Average inventory processing period | |||||||
Average receivable collection period | |||||||
Short-term Activity Ratio | |||||||
Operating cycle1 | |||||||
Benchmarks | |||||||
Operating Cycle, Competitors2 | |||||||
Amazon.com 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: 2025-02-02), 10-K (reporting date: 2024-01-28), 10-K (reporting date: 2023-01-29), 10-K (reporting date: 2022-01-30), 10-K (reporting date: 2021-01-31), 10-K (reporting date: 2020-02-02).
1 2025 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 exhibited some fluctuations over the years. Initially, it decreased from 73 days in 2020 to 70 days in 2021. However, it then increased significantly to 80 days in 2022 and further to 87 days in 2023. A notable improvement occurred in 2024 with a decrease to 75 days, followed by a rise to 81 days in 2025. Overall, the period shows a cyclical pattern with a tendency towards higher inventory processing times in recent years, impacting inventory management efficiency.
- Average Receivable Collection Period
- The average receivable collection period remained relatively stable at 7 to 8 days from 2020 through 2024. In 2025, a marked increase occurred, rising to 11 days. This suggests a recent lengthening in the time taken to collect receivables, which could have implications on cash flow and working capital management.
- Operating Cycle
- The operating cycle, which reflects the total time of the cash conversion process, showed an initial decrease from 80 days in 2020 to 78 days in 2021. Subsequently, it increased steadily to 88 days in 2022 and reached a peak of 95 days in 2023. In 2024, the operating cycle shortened to 83 days but rose again to 92 days in 2025. This pattern aligns with the fluctuations observed in inventory processing and receivables collection periods, suggesting variability in overall operational efficiency across the years.
Average Payables Payment Period
Feb 2, 2025 | Jan 28, 2024 | Jan 29, 2023 | Jan 30, 2022 | Jan 31, 2021 | Feb 2, 2020 | ||
---|---|---|---|---|---|---|---|
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. | |||||||
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: 2025-02-02), 10-K (reporting date: 2024-01-28), 10-K (reporting date: 2023-01-29), 10-K (reporting date: 2022-01-30), 10-K (reporting date: 2021-01-31), 10-K (reporting date: 2020-02-02).
1 2025 Calculation
Average payables payment period = 365 ÷ Payables turnover
= 365 ÷ =
2 Click competitor name to see calculations.
The analysis of the payables-related financial ratios over the six periods from February 2020 to February 2025 reveals notable fluctuations and trends in the company's management of payables and payment practices.
- Payables Turnover Ratio
- The payables turnover ratio exhibits variability across the periods, starting at 9.33 in February 2020, declining to lower values around 7.45 to 7.52 during 2021 and 2022, indicating slower turnover in payables. Subsequently, the ratio recovers to higher levels of 9.14 in early 2023 and peaks at 10.13 by January 2024, suggesting a more rapid payment of payables during this interval. However, the ratio slightly decreases to 8.9 in February 2025. Overall, this indicates fluctuating efficiency in payable management, with a trend toward faster payment in the middle periods and a modest moderation thereafter.
- Average Payables Payment Period
- The average payables payment period, expressed in days, demonstrates an inverse pattern relative to the turnover ratio. It increases from 39 days in February 2020 to 49 days in both January 2021 and January 2022, reflecting a longer duration to settle payables during these years. Afterward, there is a pronounced decrease to 40 days in early 2023 and further reduction to 36 days by January 2024, aligning with the increase in payables turnover during these years. In February 2025, the period rises slightly to 41 days. This pattern indicates that the company initially extended its payment terms or took longer to pay suppliers before shortening the payment period significantly in later periods, with some relaxation again in the most recent data.
In summary, the company’s payable management strategy appears to have shifted over the analyzed timeframe. After a period of slower payables turnover and extended payment periods observed in 2021 and 2022, a strategic acceleration of payments occurred through 2023 and early 2024, enhancing turnover and reducing days payable outstanding. The slight reversal in 2025 suggests a possible rebalancing of payment terms. These movements may reflect changing operational conditions, supplier relationships, or cash flow management priorities.
Cash Conversion Cycle
Feb 2, 2025 | Jan 28, 2024 | Jan 29, 2023 | Jan 30, 2022 | Jan 31, 2021 | Feb 2, 2020 | ||
---|---|---|---|---|---|---|---|
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. | |||||||
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: 2025-02-02), 10-K (reporting date: 2024-01-28), 10-K (reporting date: 2023-01-29), 10-K (reporting date: 2022-01-30), 10-K (reporting date: 2021-01-31), 10-K (reporting date: 2020-02-02).
1 2025 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 fluctuated over the years, starting at 73 days in early 2020, decreasing slightly to 70 days in early 2021. It then increased to 80 days in 2022 and peaked at 87 days in early 2023, before declining to 75 days in early 2024. The most recent period shows an increase again to 81 days. This indicates variability in inventory turnover efficiency, with periods of slower processing particularly in 2022 and 2023.
- Average receivable collection period
- The receivable collection period exhibited stability between 7 and 8 days from 2020 through 2024, indicating consistent credit collection practices. However, there was a notable increase to 11 days in the latest year reported, suggesting a slight deterioration in the speed of collecting receivables.
- Average payables payment period
- The payment period showed an initial rising trend from 39 days in 2020 to 49 days in both 2021 and 2022, which implies extended time taken to pay suppliers. This was followed by a decrease to 40 days in 2023 and further down to 36 days in 2024, suggesting a strategy towards quicker payments. The latest data point shows an increase back to 41 days, indicating some variability in payment timing.
- Cash conversion cycle
- The cash conversion cycle improved significantly from 41 days in 2020 to 29 days in 2021, reflecting enhanced efficiency in managing inventory, receivables, and payables. However, it worsened in 2022 to 39 days and worsened further to a peak of 55 days in 2023, indicating a lengthening cycle and thus decreased efficiency. It improved again to 47 days in 2024 but increased slightly to 51 days in the most recent period. Overall, the cash conversion cycle demonstrates some volatility and a recent trend toward less efficient cash flow conversion compared to the peak performance in 2021.