Analysis of Liquidity Ratios
Liquidity ratios measure the company ability to meet its short-term obligations.
Liquidity Ratios (Summary)
Target Corp., 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).
The analysis of the liquidity ratios over the observed periods reveals several notable trends in the company’s short-term financial health.
- Current Ratio
- The current ratio exhibited an overall moderate fluctuation. Starting at 0.89 in early 2020, it improved to a peak of 1.03 by early 2021. Subsequently, the ratio experienced a gradual decline through to 2024, reaching a low of 0.91. The latest data point in 2025 shows a slight recovery to 0.94. This trend suggests the company’s ability to cover its short-term liabilities with current assets improved initially but then weakened before stabilizing somewhat in the most recent period.
- Quick Ratio
- The quick ratio demonstrated more pronounced variability and generally lower values compared to the current ratio, indicating a relatively smaller proportion of liquid assets excluding inventory. It increased significantly from 0.24 in 2020 to 0.48 in 2021, suggesting an improved liquidity position excluding inventory in that period. Following this, the quick ratio decreased notably to 0.2 by early 2023. From 2023 onwards, it showed a modest uptrend, reaching 0.3 in 2025. These movements may point to fluctuations in immediately available assets and possibly inventory management changes.
- Cash Ratio
- The cash ratio, representing the most conservative liquidity measure by focusing on cash and cash equivalents, mirrors the quick ratio's pattern but at lower absolute values. It rose sharply from 0.18 in 2020 to 0.42 in 2021, indicating increased liquidity in cash holdings early in the period. Afterwards, it declined to 0.11 in 2023, the lowest level during the timeframe, before improving moderately to 0.23 in 2025. This suggests fluctuations in the company's cash reserves and their availability to meet short-term obligations.
In summary, the liquidity metrics reveal initial improvements in the company’s short-term asset coverage ratios in the early stage of the period, particularly in 2021, followed by general declines and modest recoveries toward 2025. The cash-based ratios indicate a conservative approach to liquidity assets overall, with some volatility possibly related to operational or strategic cash management decisions. The relatively low values of quick and cash ratios compared to the current ratio highlight a reliance on inventory to support liquidity, which could be a consideration for risk assessment in short-term financial stability.
Current Ratio
Target Corp., 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 | 19,454) | 17,498) | 17,846) | 21,573) | 20,756) | 12,902) | |
| Current liabilities | 20,799) | 19,304) | 19,500) | 21,747) | 20,125) | 14,487) | |
| Liquidity Ratio | |||||||
| Current ratio1 | 0.94 | 0.91 | 0.92 | 0.99 | 1.03 | 0.89 | |
| Benchmarks | |||||||
| Current Ratio, Competitors2 | |||||||
| Costco Wholesale Corp. | — | 0.97 | 1.07 | 1.02 | 1.00 | 1.13 | |
| Walmart Inc. | 0.82 | 0.83 | 0.82 | 0.93 | 0.97 | 0.79 | |
| Current Ratio, Sector | |||||||
| Consumer Staples Distribution & Retail | — | 0.87 | 0.89 | 0.96 | 0.99 | 0.88 | |
| Current Ratio, Industry | |||||||
| Consumer Staples | — | 0.85 | 0.84 | 0.87 | 0.93 | 0.92 | |
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
= 19,454 ÷ 20,799 = 0.94
2 Click competitor name to see calculations.
The financial data reveals several noteworthy trends in the company's short-term financial position over the given periods. The current assets exhibited a general upward trend from 12,902 million US dollars in early 2020, peaking at 21,573 million by early 2022. However, after this peak, there was a decline observed over the next two years, with values decreasing to 17,498 million by early 2024, before showing some recovery to 19,454 million by early 2025.
Current liabilities followed a similar pattern of growth and slight contraction. Starting at 14,487 million US dollars in early 2020, liabilities increased substantially to reach 21,747 million by early 2022. Subsequently, they decreased to 19,304 million by early 2024 but rose again to 20,799 million by early 2025, indicating some fluctuation in short-term obligations.
The current ratio, which measures the company's ability to cover its short-term liabilities with its short-term assets, consistently remained below the threshold of 1.0 in most years, indicating a potential liquidity concern. It started at 0.89 in 2020, improved slightly to 1.03 in 2021—suggesting a brief period of strengthened liquidity—before declining again to 0.99 in 2022. The ratio further decreased to 0.91 in 2024 and modestly recovered to 0.94 in 2025. Overall, despite fluctuations, the current ratio suggests that the company has generally operated with a tight liquidity position, maintaining a slightly less than one-to-one cover of current liabilities by current assets during most of the periods analyzed.
- Current Assets
- Increased notably until 2022, followed by a decline and partial recovery by 2025.
- Current Liabilities
- Rose alongside current assets peaking in 2022, then decreased and later increased again by 2025.
- Current Ratio
- Mostly below 1.0 with a brief improvement in 2021, indicating generally tight liquidity conditions.
Quick Ratio
Target Corp., 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 | 4,762) | 3,805) | 2,229) | 5,911) | 8,511) | 2,577) | |
| Accounts and other receivables | 998) | 891) | 1,169) | 835) | 631) | 498) | |
| Vendor income receivable | 543) | 513) | 526) | 518) | 504) | 464) | |
| Total quick assets | 6,303) | 5,209) | 3,924) | 7,264) | 9,646) | 3,539) | |
| Current liabilities | 20,799) | 19,304) | 19,500) | 21,747) | 20,125) | 14,487) | |
| Liquidity Ratio | |||||||
| Quick ratio1 | 0.30 | 0.27 | 0.20 | 0.33 | 0.48 | 0.24 | |
| Benchmarks | |||||||
| Quick Ratio, Competitors2 | |||||||
| Costco Wholesale Corp. | — | 0.39 | 0.52 | 0.42 | 0.47 | 0.60 | |
| Walmart Inc. | 0.20 | 0.20 | 0.18 | 0.26 | 0.26 | 0.20 | |
| Quick Ratio, Sector | |||||||
| Consumer Staples Distribution & Retail | — | 0.26 | 0.26 | 0.31 | 0.34 | 0.29 | |
| Quick Ratio, Industry | |||||||
| Consumer Staples | — | 0.38 | 0.37 | 0.38 | 0.43 | 0.47 | |
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
= 6,303 ÷ 20,799 = 0.30
2 Click competitor name to see calculations.
The analysis of the financial data reveals several key trends in the liquidity position over the six-year period observed.
- Total Quick Assets
- Total quick assets show considerable fluctuation from 2020 to 2025. Beginning at US$3,539 million in early 2020, the amount increased significantly to US$9,646 million in 2021. However, in 2022, there was a decline to US$7,264 million, followed by a further decrease to US$3,924 million in 2023. Starting in 2024, the quick assets began to recover, reaching US$5,209 million, and further increased to US$6,303 million in 2025. This pattern indicates a volatile liquidity asset base with a peak in 2021 and a trough in 2023 before a moderate upswing.
- Current Liabilities
- Current liabilities have generally increased over the period but with some fluctuation. Beginning at US$14,487 million in 2020, liabilities rose sharply to US$20,125 million in 2021 and continued upward to US$21,747 million in 2022. In 2023, the liabilities decreased to US$19,500 million and slightly declined again to US$19,304 million in 2024. In 2025, current liabilities rose once more to US$20,799 million. This trend displays an overall rising liability level with some moderation during 2023-2024.
- Quick Ratio
- The quick ratio, reflecting short-term liquidity, exhibits notable volatility. Starting at a low of 0.24 in 2020, it improved to 0.48 in 2021, indicating better liquidity management or improved quick assets relative to liabilities. Thereafter, it declined to 0.33 in 2022 and further dropped to 0.20 in 2023, the lowest level in the period. In 2024 and 2025, the quick ratio slightly improved to 0.27 and 0.30 respectively but remained below the initial levels. The decline after 2021 suggests a weakening of liquidity position, although there is some recovery towards the end of the period.
Overall, while quick assets and current liabilities both show significant fluctuations, the quick ratio trend indicates a challenging liquidity environment post-2021. The sharp increase and subsequent decrease in quick assets, combined with rising current liabilities, have put pressure on short-term liquidity. The gradual improvement in the quick ratio in the last two periods could indicate efforts to enhance liquidity, yet it remains relatively weak compared to earlier years.
Cash Ratio
Target Corp., cash ratio calculation, comparison to benchmarks
| Feb 1, 2025 | Feb 3, 2024 | Jan 28, 2023 | Jan 29, 2022 | Jan 30, 2021 | Feb 1, 2020 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Cash and cash equivalents | 4,762) | 3,805) | 2,229) | 5,911) | 8,511) | 2,577) | |
| Total cash assets | 4,762) | 3,805) | 2,229) | 5,911) | 8,511) | 2,577) | |
| Current liabilities | 20,799) | 19,304) | 19,500) | 21,747) | 20,125) | 14,487) | |
| Liquidity Ratio | |||||||
| Cash ratio1 | 0.23 | 0.20 | 0.11 | 0.27 | 0.42 | 0.18 | |
| Benchmarks | |||||||
| Cash Ratio, Competitors2 | |||||||
| Costco Wholesale Corp. | — | 0.31 | 0.45 | 0.35 | 0.41 | 0.54 | |
| Walmart Inc. | 0.09 | 0.11 | 0.09 | 0.17 | 0.19 | 0.12 | |
| Cash Ratio, Sector | |||||||
| Consumer Staples Distribution & Retail | — | 0.17 | 0.18 | 0.22 | 0.27 | 0.22 | |
| Cash Ratio, Industry | |||||||
| Consumer Staples | — | 0.23 | 0.22 | 0.23 | 0.30 | 0.33 | |
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
= 4,762 ÷ 20,799 = 0.23
2 Click competitor name to see calculations.
- Total Cash Assets
- The total cash assets showed significant fluctuations over the analyzed periods. Beginning at 2,577 million USD in 2020, there was a sharp increase to 8,511 million USD in 2021, followed by a decline to 5,911 million USD in 2022. Afterward, the cash assets further decreased to 2,229 million USD in 2023. The last two periods demonstrate a recovery trend, with cash assets increasing to 3,805 million USD in 2024 and 4,762 million USD in 2025. Overall, the cash assets exhibit volatility with a strong peak in 2021 and gradual recovery after the trough in 2023.
- Current Liabilities
- Current liabilities have generally increased during the period under review. Starting from 14,487 million USD in 2020, liabilities rose sharply to 20,125 million USD in 2021 and further to 21,747 million USD in 2022. A mild decrease occurred in 2023, with liabilities recorded at 19,500 million USD, followed by a slight decline to 19,304 million USD in 2024. The latest figure in 2025 shows an upward revision to 20,799 million USD. The overall trend is an increase in current liabilities, albeit with some periodic moderation.
- Cash Ratio
- The cash ratio, which measures liquidity, displayed considerable volatility. It increased from 0.18 in 2020 to 0.42 in 2021, indicating improved short-term liquidity. This ratio then declined to 0.27 in 2022 and further dropped to a low of 0.11 in 2023, reflecting reduced liquidity relative to current liabilities. Recovery is observed in the subsequent periods with the ratio rising to 0.20 in 2024 and 0.23 in 2025. Despite the recent improvement, the liquidity remains below the 2021 peak, suggesting continued cautiousness in liquidity management.