TJX Cos. Inc. (NYSE:TJX)

Inventory Turnover

The inventory turnover ratio exhibits noticeable fluctuations across the periods. Starting at 5.59, it peaked at 6.88 early on, followed by several declines and recoveries. Notably, the ratio dropped to lows around 4.26 and 4.36 in later periods, interspersed with moderate rebounds above 6.00. This pattern indicates variability in how frequently inventory is sold and replaced, with some periods reflecting slower inventory movement.

Receivables Turnover

The receivables turnover ratio began at a very high level of approximately 214, which then sharply declined to about 60-70 in subsequent quarters, stabilizing between 85 and 106 in later periods. This suggests an initial rapid collection of receivables that normalized to a consistent pace, reflecting relatively steady credit management practices despite early volatility.

Payables Turnover

Payables turnover showed considerable variability, starting at a high of about 25.79 and dropping sharply to single digits below 10 from early on. The ratio generally fluctuated in the 5-9 range thereafter, indicating changes in the frequency of settling payables. The trend points to lengthening payment periods compared to the initial period, signaling potential strategic extensions in payment terms or cash management adjustments.

Working Capital Turnover

Working capital turnover displayed a strong upward trajectory. Initially around 6.55, it increased progressively, reaching levels above 20 from the latter periods and peaking near 45 towards the end. This substantial rise implies enhanced efficiency in using working capital to generate sales over time, reflecting improved operational effectiveness and possibly stronger revenue growth relative to working capital.

Average Inventory Processing Period

This metric generally mirrors the inventory turnover trends, with average days fluctuating between approximately 53 and 86 days. Periods with low turnover correspond to longer processing times, with a noticeable increase in days around the quarters where turnover declined. Such variations highlight periods where inventory movement slowed, requiring more days to clear stock.

Average Receivable Collection Period

The collection period remained quite stable, predominantly between 3 and 6 days throughout. Following an early increase from 2 to about 5-6 days, it maintained a consistent range, indicating steady receivables management and efficient cash collection practices without significant operational changes.

Operating Cycle

The operating cycle, which combines inventory processing and receivable collection periods, fluctuated considerably, ranging from as low as 58 days up to around 90 days. The peaks correspond with longer inventory processing durations, suggesting that inventory management predominantly drives the operating cycle's variability.

Average Payables Payment Period

The average payables payment period exhibited a considerable upward shift early on, starting at 14 days and reaching as high as 88 days within a few quarters. Subsequently, it stabilized mostly between 37 and 53 days, indicating a strategic elongation of payment terms to vendors or improved supplier credit arrangements, which may favorably impact cash flow management.

Cash Conversion Cycle

The cash conversion cycle showed marked variability, initially positive but briefly turning negative in certain quarters (e.g., -11 and -2 days), indicative of periods where payment terms exceeded the sum of inventory and receivables periods. In later quarters, the cycle stabilized between approximately 20 and 39 days, signifying a consistent time frame to convert investments in inventory and receivables back into cash. The periods with negative values suggest effective working capital management during those times.

The financial data reveals notable fluctuations and trends in cost of sales, merchandise inventories, and inventory turnover over the given periods.

Cost of Sales, Including Buying and Occupancy Costs

The cost of sales exhibits a general upward trend with some periods of volatility. Starting around $4.4 billion, it increases significantly to over $10 billion in several intervals, notably in early 2022 and early 2024 periods. There are noticeable spikes in January 2021, January 2023, and February 2024, indicating periods of elevated expenses. Despite certain drops, the overall trajectory suggests increasing operational costs over time, possibly reflecting higher sales volumes, inflationary pressures, or increased buying and occupancy expenses.

Merchandise Inventories

Merchandise inventories present a somewhat irregular pattern with alternating rises and declines. Inventory levels begin around $4.9 billion, dip during mid-2020 to below $3.8 billion, then rise to peaks exceeding $8 billion in late 2022 and early 2025. Several fluctuations correspond closely with changes in cost of sales, suggesting active inventory management responding to sales demand or supply chain conditions. The fluctuations may also point to seasonal inventory build-ups or reductions based on anticipated sales cycles.

Inventory Turnover Ratio

The inventory turnover ratio shows considerable variation, ranging from highs above 6.8 to lows near 4.3. This ratio generally decreases during periods of rising inventory levels and higher costs, indicating slower inventory movement relative to sales in those instances. Conversely, higher turnover ratios align with periods of lower inventory levels and possibly stronger sales efficiency. The cyclic nature of this ratio implies the company experiences shifts in inventory velocity which might be attributable to market demand fluctuations, inventory purchasing strategies, or external economic factors.

In summary, the company demonstrates increasing cost of sales alongside fluctuating inventory levels, impacting the efficiency of inventory turnover. The data suggests a dynamic operational environment with varying demands on inventory management and sales cost control, highlighting areas for continued focus on balancing inventory investment with sales performance to optimize working capital and cost efficiency.

Net Sales

Net sales exhibited an overall increasing trend with some fluctuations across the periods analyzed. Starting at approximately $4.41 billion in May 2020, net sales rose significantly to a peak exceeding $16 billion in early 2024. Notable growth phases include the period from mid-2021 to early 2022, where sales increased from about $12 billion to over $14 billion. Although seasonal or short-term declines are apparent—such as decreases observed around April and July 2022 or May 2025—the longer-term trajectory indicates consistent expansion.

Accounts Receivable, Net

Accounts receivable levels displayed a generally stable pattern with moderate increases over time. Starting at $172 million in May 2020, the values increased to the range of approximately $500 million to $650 million in the latest periods. Some periodic fluctuations occurred, including temporary rises around mid-2021 and declines by early 2024, but the data do not show any abrupt or sustained surges or drops. The overarching trend suggests controlled growth in receivables relative to sales increases.

Receivables Turnover Ratio

The receivables turnover ratio showed substantial variability early on but stabilized into a narrower range in the later periods. Initial high ratios exceeded 200 in May 2020 but quickly dropped to a range between approximately 60 and 100 by the end of 2020. From 2021 onward, the ratio fluctuated mostly between 85 and 105, reflecting consistent efficiency in collecting receivables relative to sales. Slight upward trends are observable around early 2023 and mid-2024, suggesting improved turnover performance at those points.

Summary

The data indicate steady growth in net sales accompanied by carefully managed accounts receivable levels, facilitating stable receivables turnover ratios in recent quarters. Despite some periods of seasonal decline, the company appears to maintain effective credit management while continuing to expand its revenue base. The stabilization of the turnover ratio after initial volatility further points toward consistent operational control in managing customer payments.

The cost of sales, including buying and occupancy costs, demonstrates a general upward trend with notable fluctuations across the analyzed periods. Starting at 4,414 million US dollars, this cost rises substantially, reaching peaks near or above 11,000 million US dollars in the later periods. This increase is indicative of expanding operational scale or increased input costs. However, intermittent declines or slower growth phases are observed, suggesting possible seasonal effects or operational adjustments.

Accounts payable figures exhibit considerable volatility over the time frame. Beginning at 1,071 million US dollars, accounts payable displays several sharp increases and decreases, peaking at values exceeding 5,900 million US dollars in certain quarters. These fluctuations imply variable purchasing patterns or changes in payment policies, possibly reflecting shifting supplier agreements or cash management strategies.

The payables turnover ratio, which indicates how frequently accounts payable are paid off within a period, shows a decline from an initial high of 25.79 to single-digit levels in subsequent periods, stabilizing mostly between approximately 6 and 10. This reduction from an initially very high turnover suggests a lengthening of payment cycles over time. The ratio’s fluctuations within this narrowed range show periods of faster and slower payment activity, correlating partially with the variations in the accounts payable balance.

Cost of Sales Trends

Marked upward trajectory with pronounced peaks and intermittent slowdowns.

Accounts Payable Behavior

Highly variable with significant peaks, implying changing purchasing or payment practices.

Payables Turnover Dynamics

Substantial decrease from very high initial turnover, stabilizing within a moderate range, indicating longer payment cycles and variable payment speeds.

Overall, the data reflects a complex interaction between operational expenditure growth, varying supplier funding requirements, and evolving payment strategies. The pattern suggests adaptive financial management in response to business scale and possibly external market conditions.

The analysis of the financial trends reveals notable fluctuations and patterns in working capital, net sales, and working capital turnover over the reported periods.

Working Capital

Working capital demonstrates a general declining trend from May 2020 through November 2025, with notable short-term fluctuations. Initial values start at 5,627 million USD in May 2020, decreasing sharply to lower levels around 1,313 million USD by November 2025. Periodic recoveries, such as those observed around January 2023 and February 2024, indicate temporary improvements, but the overall trajectory is downward. This decline may suggest tighter liquidity or increased current liabilities relative to current assets over time.

Net Sales

Net sales show a generally upward trend across the periods, with some volatility. Starting from 4,409 million USD in May 2020, net sales rise significantly to reach peaks exceeding 16,000 million USD in some quarters (e.g., February 2024 and February 2025). Despite certain dips, such as in April 2022 and July 2023, the overall direction is an increase. This suggests growth in revenue generation capacity, with seasonal or external factors possibly causing interim variations.

Working Capital Turnover

Working capital turnover exhibits a strong increasing trend across the timeline, starting at 6.55 in May 2020 and rising dramatically to 44.92 by November 2025. The rising ratio indicates an increasing efficiency in using working capital to generate sales. This implies that even as working capital decreases, the company manages to produce proportionally higher revenues, enhancing asset utilization efficiency.

Overall, the data suggest that while the company’s working capital base has contracted fairly consistently, net sales have grown, and the use of working capital has become more efficient. The improvement in working capital turnover alongside rising sales could reflect strategic management of current assets and liabilities or operational improvements. However, the declining working capital might warrant close monitoring to ensure that liquidity challenges do not arise, potentially impacting short-term financial health.

The analysis of the inventory turnover ratio and the average inventory processing period over the observed quarterly periods reveals several notable trends and patterns.

Inventory Turnover Ratio

The inventory turnover ratio exhibits considerable fluctuations throughout the periods. Starting at 5.59, it reached a peak of 6.88 by August 2020, followed by a decline to around the 4.9 to 5.1 range in several subsequent quarters. The highest turnover after the initial peak appears at 6.36 in early 2024, indicating a period of more efficient inventory sales or management. Subsequently, the ratio oscillates between approximately 4.36 at its lowest and around 6.16 at its higher points. This variability suggests that the efficiency with which inventory is sold fluctuates, potentially reflecting changing market conditions, inventory management strategies, or sales cycles.

Average Inventory Processing Period (Number of Days)

The average inventory processing period shows an inversely related trend to the turnover ratio, as expected. Periods of lower turnover correspond to higher inventory processing days, indicating slower inventory movement. For instance, when turnover drops to around 4.26 or 4.36, inventory processing days rise to as high as 86 or 84 days. Conversely, periods of higher turnover (such as 6.21 or 6.36) see processing days decrease to the high 50s or low 60s. These cycles suggest intermittent changes in inventory liquidity, with certain quarters experiencing slower inventory clearance and others quicker, which could be tied to seasonal demand, supply chain factors, or operational adjustments.

Overall Pattern and Insights

The data demonstrates a cyclical nature in inventory management efficiency, with a recurring pattern of rising and falling turnover and processing periods over the four-year span. Although there is no consistent trend toward sustained improvement or deterioration, the peaks and troughs indicate responsiveness to external or internal influences on inventory dynamics. Efficient inventory management quarters, indicated by turnover above 6 and processing days below 60, are intermittently achieved but not maintained consistently over extended periods. The fluctuations highlight the importance of continual inventory monitoring and adaptation to optimize turnover and reduce holding periods.

The financial data reveals significant fluctuations and trends in the receivables performance over the observed periods. A detailed analysis of the receivables turnover ratio and the average receivable collection period provides insight into the company's efficiency in managing credit and collecting receivables.

Receivables Turnover Ratio

The receivables turnover ratio exhibits a volatile pattern initially, with a sharp decline from 213.66 to 60.88 between May 2020 and May 2021, indicating a slowdown in receivables collection. After this period, the ratio shows a consistent recovery and stabilization, fluctuating mostly between 70 and 110. From around January 2022 onward, the ratio generally remains above 85, often exceeding 90 and peaking again at 106.76 in August 2024. This recovery suggests an improvement in the company's efficiency in collecting receivables after the low point in mid-2021.

Average Receivable Collection Period

The average receivable collection period ranges narrowly between 2 and 6 days, indicating that the company consistently collects its receivables quickly. Initially, the period was higher at 5 to 6 days but it stabilizes to 4 days for the majority of the timeline starting in October 2020. There is a slight improvement around August 2024 when the collection period decreases to 3 days, further underscoring improved collection efficiency. The quick collection period, together with the fluctuating turnover ratio, points to an overall effective receivables management.

Insights and Implications

The initial decline in the turnover ratio amid a slight increase in collection days may reflect early challenges, possibly related to economic disruptions. However, subsequent trends indicate recovery and ongoing efficient management of receivables. A consistently low average collection period supports the interpretation of strong credit and collection policies.
The reconciliation of a relatively high receivables turnover ratio with a low average collection period signals that the company maintains good liquidity by swiftly converting receivables into cash. Monitoring these metrics will continue to be critical for ensuring operational efficiency and cash flow stability.

Average Inventory Processing Period

The average inventory processing period shows considerable variability across the quarters. Initially, it declined from 65 days to 53 days early on, before rising again to 72 days in October 2020. Thereafter, it fluctuates significantly, reaching peaks of 86 days in October 2022 and 84 days projected for November 2025. Periods of lower inventory days, such as May 2024 (57 days) and August 2024 (59 days), are interspersed with these peaks, indicating uneven inventory management or changes in sales cycles over time.

Average Receivable Collection Period

The receivable collection period remains relatively stable throughout the timeframe, averaging around 4 to 6 days. Minor fluctuations are observed, with a slight increase in some quarters (e.g., 6 days in May 2021) but generally holding close to 4 days in most periods. This stability suggests consistent efficiency in collecting receivables without significant deterioration or improvement.

Operating Cycle

The operating cycle trends closely mirror the inventory processing period, given the stable receivable days. The operating cycle shows several peaks, notably 90 days in October 2022 and 88 days forecasted for November 2025. Similarly, troughs such as 58 days in August 2020 and 61 days in February 2024 are evident. Overall, the operating cycle exhibits marked fluctuations, predominantly driven by changes in inventory turnover speed, while receivable collection remains steady.

Payables Turnover Ratio

The payables turnover ratio exhibits significant fluctuations over the observed periods. It started at a high value of 25.79, indicating rapid payment of payables, but sharply declined to as low as 4.13 within several quarters. Subsequently, the ratio increased moderately and showed a cyclical pattern fluctuating mostly between 6 and 10. Peak values were observed around early 2024 with figures close to 9.8, followed by some declines yet maintaining a range above 6 up to the last reported period. This pattern suggests varying payment efficiency or changes in purchasing and payment terms across quarters.

Average Payables Payment Period (Days)

The average payables payment period in days inversely correlates with the turnover ratio, as expected. It began with a very short payment period of 14 days, then sharply increased to a maximum of 88 days early in the timeline. Thereafter, it displayed a declining trend, fluctuating mostly between 37 and 53 days. Occasional increases are noted, particularly where the turnover ratio shows a dip. The payment period generally stabilized around the 40 to 50 days range in recent quarters, indicating a moderate and consistent timeline for settling payables.

Overall Trends and Insights

The data reflects an initial phase of rapid payment and turnover followed by a period of extended payables, possibly due to changing business conditions or strategic payment management. Over time, both metrics trend toward a balanced state, with the payables turnover ratio settling in a mid-range and the payment period stabilizing. This suggests improved predictability and consistency in accounts payable management. The oscillations in both metrics could indicate seasonality effects, supply chain adjustments, or policy changes affecting vendor payment cycles.

Average Inventory Processing Period

The average inventory processing period exhibits considerable fluctuation over the reported quarters. It starts at 65 days and reaches a low point at 53 days early in the timeline, then increases sporadically, peaking at 86 days in October 2022. Following this peak, it generally trends downward, touching lows in the high 50s and low 60s towards early 2024 before rising again. This variability suggests changing inventory management efficiency or shifts in product turnover rates.

Average Receivable Collection Period

The average receivable collection period remains relatively stable throughout the periods analyzed. It typically hovers around 4 to 6 days, with slight minor fluctuations that do not indicate any significant trend changes. This stability implies consistent effectiveness in collecting receivables.

Average Payables Payment Period

The payables payment period presents a much more variable pattern. It begins at 14 days, sharply increasing to a peak of 88 days, then steadily decreases before oscillating between 37 and 53 days in the most recent quarters. Such fluctuations may reflect changes in payment policies, supplier terms, or cash management strategies.

Cash Conversion Cycle

The cash conversion cycle (CCC) shows substantial changes through the time series. Starting at 53 days, it briefly turns negative, indicating that payables outpace inventory and receivables at certain points, with a low of -11 days. Subsequently, the CCC mostly maintains a positive range, generally between 20 and 39 days, with some volatility. This suggests varying operational efficiency in converting resources into cash, influenced by the interplay of inventory, receivables, and payables cycles.