Analysis of Liquidity Ratios
Liquidity ratios measure the company ability to meet its short-term obligations.
Liquidity Ratios (Summary)
TJX Cos. Inc., liquidity ratios
Based on: 10-K (reporting date: 2025-02-01), 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).
- Current Ratio
- The current ratio exhibits variability over the observed periods, starting at 1.24 in early 2020, peaking at 1.46 in early 2021, followed by a decline to 1.27 in 2022. The ratio further decreases slightly, stabilizing around 1.21 in both 2023 and 2024, before dipping marginally to 1.18 in 2025. This trend indicates a peak in short-term liquidity in 2021, with a gradual reduction thereafter, implying a modest decline in the company's ability to cover current liabilities with current assets over time.
- Quick Ratio
- The quick ratio shows considerable fluctuation, starting relatively low at 0.50 in 2020, then increasing sharply to 1.01 in 2021. After this peak, the ratio experiences a decline to 0.64 in 2022 and further decreases slightly to 0.59 during both 2023 and 2024, before falling to 0.53 in 2025. This pattern suggests that the company improved its liquid asset coverage of current liabilities notably in 2021 but has since seen a gradual reduction in immediate liquidity, potentially indicating increased reliance on inventory or a shift in asset composition.
- Cash Ratio
- The cash ratio mirrors the quick ratio's trend to a degree, commencing at 0.45 in 2020 and rising sharply to 0.97 in 2021, which signals a significant increase in cash and cash equivalents during that year. The ratio then declines to 0.59 in 2022, continues downward to 0.53 in 2023, remains almost stable at 0.54 in 2024, and finally decreases to 0.48 in 2025. This fluctuation indicates that the company's most liquid assets peaked in availability in 2021, followed by a gradual decrease, suggesting tighter cash reserves in subsequent years.
Current Ratio
TJX Cos. Inc., current ratio calculation, comparison to benchmarks
| Feb 1, 2025 | Feb 3, 2024 | Jan 28, 2023 | Jan 29, 2022 | Jan 30, 2021 | Feb 1, 2020 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Current assets | 12,991) | 12,664) | 12,456) | 13,259) | 15,739) | 8,891) | |
| Current liabilities | 11,008) | 10,451) | 10,305) | 10,468) | 10,804) | 7,150) | |
| Liquidity Ratio | |||||||
| Current ratio1 | 1.18 | 1.21 | 1.21 | 1.27 | 1.46 | 1.24 | |
| Benchmarks | |||||||
| Current Ratio, Competitors2 | |||||||
| Amazon.com Inc. | — | 1.06 | 1.05 | 0.94 | 1.14 | 1.05 | |
| Home Depot Inc. | 1.11 | 1.35 | 1.41 | 1.01 | 1.23 | 1.08 | |
| Lowe’s Cos. Inc. | 1.09 | 1.23 | 1.10 | 1.02 | 1.19 | 1.01 | |
| Current Ratio, Sector | |||||||
| Consumer Discretionary Distribution & Retail | — | 1.11 | 1.10 | 0.98 | 1.17 | 1.06 | |
| Current Ratio, Industry | |||||||
| Consumer Discretionary | — | 1.22 | 1.20 | 1.15 | 1.25 | 1.18 | |
Based on: 10-K (reporting date: 2025-02-01), 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).
1 2025 Calculation
Current ratio = Current assets ÷ Current liabilities
= 12,991 ÷ 11,008 = 1.18
2 Click competitor name to see calculations.
The analysis of the financial data for the periods presented reveals several key trends related to current assets, current liabilities, and the current ratio.
- Current Assets
- There was a significant increase in current assets from US$8,891 million in early 2020 to a peak of US$15,739 million in early 2021, indicating a substantial growth in liquid and short-term assets. Subsequently, current assets experienced a decline in 2022 to US$13,259 million and continued to decrease until 2023, reaching US$12,456 million. From 2023 to 2025, current assets stabilized, with a modest upward trend, rising to US$12,991 million by early 2025.
- Current Liabilities
- Current liabilities also increased sharply from US$7,150 million in 2020 to US$10,804 million in 2021, mirroring the rise in current assets. From 2021 onwards, current liabilities decreased slightly to US$10,468 million in 2022 and continued a marginal decline to US$10,305 million in 2023. Thereafter, current liabilities began to rise again, reaching US$11,008 million in 2025, the highest in the period analyzed.
- Current Ratio
- The current ratio rose from 1.24 in 2020 to 1.46 in 2021, reflecting an improvement in the company’s liquidity position, as current assets grew comparatively more than current liabilities. However, from 2021 onwards, the current ratio showed a downward trend, decreasing to 1.27 in 2022 and continuing to decline through subsequent years, reaching 1.18 by 2025. This decline suggests a gradual weakening of liquidity, as current liabilities increased faster relative to current assets after 2021.
In summary, the company experienced a strong increase in liquidity and current assets in 2021, followed by a period of asset reduction and rising liabilities, resulting in a declining current ratio through to 2025. Although current assets stabilized somewhat after 2023, the recent increase in current liabilities has contributed to a continued decrease in the current ratio, signaling cautious monitoring of short-term financial obligations is warranted.
Quick Ratio
TJX Cos. Inc., quick ratio calculation, comparison to benchmarks
| Feb 1, 2025 | Feb 3, 2024 | Jan 28, 2023 | Jan 29, 2022 | Jan 30, 2021 | Feb 1, 2020 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Cash and cash equivalents | 5,335) | 5,600) | 5,477) | 6,227) | 10,470) | 3,217) | |
| Accounts receivable, net | 549) | 529) | 563) | 518) | 461) | 386) | |
| Total quick assets | 5,884) | 6,129) | 6,040) | 6,744) | 10,931) | 3,603) | |
| Current liabilities | 11,008) | 10,451) | 10,305) | 10,468) | 10,804) | 7,150) | |
| Liquidity Ratio | |||||||
| Quick ratio1 | 0.53 | 0.59 | 0.59 | 0.64 | 1.01 | 0.50 | |
| Benchmarks | |||||||
| Quick Ratio, Competitors2 | |||||||
| Amazon.com Inc. | — | 0.84 | 0.81 | 0.69 | 0.86 | 0.83 | |
| Home Depot Inc. | 0.23 | 0.32 | 0.26 | 0.20 | 0.47 | 0.23 | |
| Lowe’s Cos. Inc. | 0.11 | 0.08 | 0.09 | 0.07 | 0.28 | 0.06 | |
| Quick Ratio, Sector | |||||||
| Consumer Discretionary Distribution & Retail | — | 0.73 | 0.68 | 0.57 | 0.77 | 0.68 | |
| Quick Ratio, Industry | |||||||
| Consumer Discretionary | — | 0.90 | 0.85 | 0.81 | 0.92 | 0.88 | |
Based on: 10-K (reporting date: 2025-02-01), 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).
1 2025 Calculation
Quick ratio = Total quick assets ÷ Current liabilities
= 5,884 ÷ 11,008 = 0.53
2 Click competitor name to see calculations.
- Total Quick Assets
- The total quick assets exhibited significant volatility over the analyzed periods. Starting from 3,603 million US dollars in early 2020, there was a notable peak at 10,931 million in early 2021, followed by a sharp decline to 6,744 million in early 2022. Subsequently, the value decreased further to around 6,040 million in early 2023 and remained relatively stable, with slight fluctuations, around 6,100 million to 5,884 million through early 2025.
- Current Liabilities
- Current liabilities showed an overall increasing trend across the periods. Beginning at 7,150 million US dollars in early 2020, liabilities nearly doubled to 10,804 million by early 2021. Although there was a small decline in early 2022 and 2023, values remained elevated above 10,000 million, rising again to reach 11,008 million by early 2025.
- Quick Ratio
- The quick ratio mirrored the movements in quick assets and current liabilities, reflecting underlying liquidity conditions. It more than doubled from 0.5 in early 2020 to 1.01 in early 2021, indicating an improvement in liquidity. However, this improvement was short-lived as the ratio steadily declined thereafter, decreasing to 0.64 in early 2022 and further down to a range between 0.53 to 0.59 in subsequent years through early 2025. This decline suggests a deterioration in the company's ability to cover current liabilities with quick assets over the latter years.
- Summary
- The data reveal a period of strong liquidity in early 2021, followed by a retreat to lower liquidity levels in the following years. Despite relatively stable quick asset values from early 2022 onward, rising current liabilities have exerted downward pressure on the quick ratio. The overall trend points to a weakening in short-term financial stability and liquidity from early 2022 through early 2025, underscoring potential risks in meeting immediate obligations.
Cash Ratio
TJX Cos. Inc., cash ratio calculation, comparison to benchmarks
| Feb 1, 2025 | Feb 3, 2024 | Jan 28, 2023 | Jan 29, 2022 | Jan 30, 2021 | Feb 1, 2020 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Cash and cash equivalents | 5,335) | 5,600) | 5,477) | 6,227) | 10,470) | 3,217) | |
| Total cash assets | 5,335) | 5,600) | 5,477) | 6,227) | 10,470) | 3,217) | |
| Current liabilities | 11,008) | 10,451) | 10,305) | 10,468) | 10,804) | 7,150) | |
| Liquidity Ratio | |||||||
| Cash ratio1 | 0.48 | 0.54 | 0.53 | 0.59 | 0.97 | 0.45 | |
| Benchmarks | |||||||
| Cash Ratio, Competitors2 | |||||||
| Amazon.com Inc. | — | 0.56 | 0.53 | 0.45 | 0.68 | 0.67 | |
| Home Depot Inc. | 0.06 | 0.17 | 0.12 | 0.08 | 0.34 | 0.12 | |
| Lowe’s Cos. Inc. | 0.11 | 0.08 | 0.09 | 0.07 | 0.28 | 0.06 | |
| Cash Ratio, Sector | |||||||
| Consumer Discretionary Distribution & Retail | — | 0.49 | 0.44 | 0.37 | 0.61 | 0.54 | |
| Cash Ratio, Industry | |||||||
| Consumer Discretionary | — | 0.51 | 0.48 | 0.47 | 0.63 | 0.58 | |
Based on: 10-K (reporting date: 2025-02-01), 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).
1 2025 Calculation
Cash ratio = Total cash assets ÷ Current liabilities
= 5,335 ÷ 11,008 = 0.48
2 Click competitor name to see calculations.
- Total Cash Assets
- The total cash assets exhibited considerable fluctuation over the analyzed period. Initially, there was a substantial increase from approximately 3.2 billion USD to over 10.4 billion USD between early 2020 and early 2021. This peak was followed by a significant decline to about 6.2 billion USD in early 2022, after which cash assets continued a downward trend, with slight variations, reaching approximately 5.3 billion USD by early 2025. The data suggest an initial accumulation of cash resources possibly for strategic positioning or liquidity buffering, followed by a reduction that stabilized at a lower level compared to the 2021 peak.
- Current Liabilities
- Current liabilities demonstrated a generally increasing trend throughout the period. Beginning at around 7.15 billion USD in early 2020, liabilities rose sharply to over 10.8 billion USD in early 2021. There was a marginal decline over the next two years but the amount remained relatively stable around 10.3 to 10.5 billion USD. A notable increase occurred in the last recorded period, reaching approximately 11.0 billion USD. This upward trajectory in liabilities suggests growing short-term financial obligations, which could impact liquidity if not managed alongside asset growth.
- Cash Ratio
- The cash ratio, which measures the company’s ability to cover current liabilities with cash or cash equivalents, improved markedly from 0.45 in early 2020 to near parity at 0.97 in early 2021, reflecting a strong liquidity position. Nonetheless, following this peak, the ratio declined steadily to around 0.48 by early 2025. This downward trend indicates a weakening in liquidity coverage, reflecting that current liabilities grew at a faster pace than available cash assets in later years. The cash ratio being consistently below 1 after 2021 highlights potential liquidity concerns and the necessity for careful cash management moving forward.