Target Corp. (NYSE:TGT)

The data reflects fluctuations and patterns in the company's operational efficiency metrics over several quarters. The focus is on inventory turnover, payables turnover, working capital turnover, and their related average periods.

Inventory Turnover

This ratio shows variability over time, generally oscillating between approximately 4.7 and 6.7. Notably, the turnover declined from 6.78 in October 2020 to about 4.86 in January 2021, suggesting slower inventory movement during this period. Following this, the ratio recovers to above 6 by mid-2021 before declining again around early 2022 and stabilizing in the mid-5 range in subsequent quarters. This indicates periodic fluctuations in how efficiently inventory is being sold and replenished, without a clear long-term upward or downward trend.

Payables Turnover

The payables turnover ratio follows a similar pattern with values ranging roughly between 4.4 and 6.9. There is a noticeable dip around early 2021 where the turnover decreases to approximately 4.42, indicating slower payment to suppliers. This is followed by a gradual increase reaching as high as 6.88 in mid-2022, pointing to faster payments during that period. The ratio then moderately decreases but remains generally higher than the early 2021 lows, suggesting an overall improvement in payables management over the latter periods.

Working Capital Turnover

Data for this ratio is sparse and available only for a short span, showing extreme variance with values such as 394.58 and then dropping significantly to below 150 in subsequent quarters. These large fluctuations suggest considerable volatility or possible anomalies in the working capital utilization or reporting during that timeframe, making trend analysis difficult.

Average Inventory Processing Period (Days)

The average inventory processing period exhibits cyclical variation with a range mostly between 54 and 77 days. Periods around early 2021 and early 2022 tend to show higher values (approximately 74 to 77 days), indicating slower inventory turnover. Conversely, values tend to drop near mid-2021 and mid-2023 to closer to 55-60 days, reflecting faster inventory processing. This cyclic pattern correlates inversely with the inventory turnover ratio, as expected.

Average Payables Payment Period (Days)

This metric also shows a cyclical trend generally moving between roughly 53 and 83 days. The longest payment periods appear around early 2021 and early 2022, stretching beyond 80 days, signifying slower payments to suppliers during those quarters. Shorter payment periods typically occur around mid-2021 and mid-2023, indicating quicker payment cycles. The inverse relationship with payables turnover ratio is consistent throughout the periods.

In summary, the data reflects operational fluctuations influenced by potentially seasonal or market-driven factors. Inventory and payables turnovers show cyclical changes with periods of slower and faster activity, mirrored inversely by their respective average processing periods. The working capital turnover data is insufficient and volatile, limiting comprehensive insights. Overall, the metrics suggest the company experiences periodic shifts in efficiency and working capital management without marked long-term trends toward improvement or decline over the recorded timeframe.

Cost of Sales

The cost of sales figures exhibit a cyclical seasonal pattern with notable peaks occurring approximately every four quarters, indicating higher costs during specific periods, potentially tied to seasonal demand or inventory cycles. For example, significant spikes are observed in February 2020 (17,056 million USD), January 2021 (20,485 million USD), January 2022 (22,761 million USD), and January 2023 (23,946 million USD). Following each peak, there tends to be a decline or stabilization in subsequent quarters before the next rise. Overall, the cost of sales shows an upward trend over the entire period, reflecting growth in scale or inflationary pressures. However, there is some volatility, with occasional dips such as in May 2020 (14,510 million USD) and May 2024 (17,128 million USD).

Inventory

Inventory levels demonstrate some degree of seasonality and variability, though not perfectly aligned with the cost of sales peaks. There is a general increasing trend from mid-2019 through late 2022, peaking at 17,117 million USD in October 2022. This increase suggests accumulation of inventory ahead of anticipated demand or expansion activities. After this peak, inventory levels declined notably in early 2023 to 13,499 million USD, fluctuated but remained generally lower than the 2022 peak levels through the latest data in August 2025, which reports 12,881 million USD. These movements indicate active inventory management, possibly in response to changing market conditions or supply chain adjustments.

Inventory Turnover Ratio

The inventory turnover ratio reflects the efficiency of inventory management, measured as the number of times inventory is sold or used during a period. It ranges mostly between approximately 4.7 and 6.8 times over the observed timeframe. The ratio exhibits some cyclicality, often decreasing during quarters with higher inventory levels and increasing as inventory levels decline. For example, the turnover was relatively high at 6.78 in October 2020 when inventory was rising but dropped to 4.73 in January 2023 at the peak inventory level. The variability indicates fluctuating efficiency, though the turnover tends to hover close to an average around 5.5 to 6 times per period, signaling moderately consistent inventory management. Changes in turnover coincide with cost of sales trends, suggesting responsiveness to operational conditions.

Cost of Sales Trends

The cost of sales demonstrates significant fluctuations over the observed periods. There is a noticeable spike in early 2020, reaching a peak of approximately 20.5 billion US dollars in January 2021 and again in early 2022 and 2024. Periods such as May 2019 through November 2019 show relatively stable cost levels in the range of 12 to 13 billion US dollars. Subsequently, the cost escalates sharply in the early months of 2020, suggesting increased business activity or inflationary pressures on goods. After this peak, costs alternatively rise and fall but generally maintain elevated levels between 17 and 24 billion US dollars from mid-2020 through 2025, indicating either growth or volatility in underlying sales or production costs.

Accounts Payable Patterns

Accounts payable has also displayed notable variability. Beginning at around 8.36 billion US dollars in May 2019, it increased steadily, peaking above 16 billion US dollars toward the end of 2021. This rise closely follows the increasing cost of sales seen in prior periods, suggesting a correlated increase in outstanding supplier obligations. However, after this peak, accounts payable tend to fluctuate between approximately 11.5 and 15.5 billion US dollars. These fluctuations could reflect changes in payment policies, supplier terms, or operational cycles. The pattern indicates elevated payables relative to initial periods, aligning with growing business scale or revised working capital management.

Payables Turnover Ratio Analysis

The payables turnover ratio, which measures how frequently the company settles its payables, exhibits a varying trend with values ranging from approximately 4.4 to 6.9 times per period. Notably, the ratio declines to its lowest point under 4.5 in late 2020 and early 2022, corresponding with peaks in both cost of sales and accounts payable, suggesting slower payments during high payables periods. Conversely, the highest turnover rates above 6.8 occur in mid to late 2023, indicating faster payment cycles during these periods. Overall, the ratio's fluctuations suggest a dynamic payment cycle, potentially responsive to liquidity needs or supplier negotiations, with a general trend of accelerating turnover in recent quarters.

Interrelations and Insights

The data implies a close relationship between cost of sales and accounts payable, where rising costs generally accompany elevated payables. The variation in payables turnover further highlights changing payment behavior, possibly reflecting strategic working capital adjustments. The peaks in costs and payables around early 2021 and 2024 may correspond to market or operational events impacting supply chain and production expenses. The pattern of higher payables and varying turnover rates points to a flexible approach in managing supplier payments relative to cost pressures and cash flow considerations.

The analysis of the quarterly financial data reveals several noteworthy patterns and changes in the working capital, net sales, and working capital turnover over the observed periods.

Working Capital

Working capital exhibited significant volatility throughout the observed quarters. Initially, there was a substantial negative working capital starting at -1,632 million US dollars in May 2019, which deepened to -2,803 million by November 2019. However, a notable reversal occurred in early 2020, turning positive by May 2020 at 203 million and reaching a peak of 1,731 million in August 2020. Following this peak, the working capital declined gradually, fluctuating between positive and negative values but generally trending downward, with several quarters showing large negative balances again, such as -3,992 million in July 2022 and -3,234 million in July 2023. The latter quarters show a reduction in the magnitude of negative working capital, suggesting some stabilization but still remaining in deficit territory.

Net Sales

Net sales showed overall growth with quarter-to-quarter fluctuations typical of seasonal or market demand variations. Starting from 17,627 million US dollars in May 2019, net sales generally increased over the span, peaking at 31,995 million in February 2024. There were noticeable jumps in net sales during early 2020 and early 2022, with intermittent decreases, but the long-term trend was positive, demonstrating increasing revenue generation capability. The highest sales figures coincide with some of the quarters where working capital was negative, indicating strong sales performance even when working capital management might have been challenging.

Working Capital Turnover

Working capital turnover data is sparse, with values available only in mid-2020 showing extraordinarily high variation, including a value as extreme as 394.58, followed by more moderate figures ranging from about 48.9 to 148.27. These values suggest periods of both intense asset utilization and efficiency fluctuation within the quarter. The absence of data for most periods limits the ability to identify sustained trends, but the available figures imply that working capital management efficiency varied considerably.

In summary, the data shows considerable fluctuation in working capital, with a pattern of deep negative values interspersed with short-term positive reversals. Net sales demonstrate a positive upward trajectory across the examined periods, indicating robust sales growth despite working capital challenges. Limited data on working capital turnover points to variability in operational efficiency associated with working capital. Overall, while revenue growth is strong, working capital management appears to require attention to enhance liquidity and operational stability.

The inventory turnover ratio shows variability over the observed periods, with values generally oscillating between approximately 4.73 and 6.78. Initially, the ratio increased from 6.1 to a peak of 6.78, followed by a marked decline to 4.94. This decline suggests a reduced frequency in inventory turnover during that time, which then recovers irregularly, displaying multiple peaks around 6.5 and troughs near 5.0. The most recent data reveal a slight downward trend from 6.55 to values just below 6.0, indicating some fluctuations in inventory management efficiency toward the later periods.

Correspondingly, the average inventory processing period exhibits an inverse pattern consistent with the turnover ratio, as expected. It starts around 60 days, decreases to a low of 54 days when the turnover ratio is high, and then increases to 77 days when the turnover ratio falls to its local minimum. Subsequent data points show the processing period moving up and down between approximately 56 and 72 days, mirroring the fluctuations in inventory turnover.

Inventory turnover trends

The turnover ratio peaks early at 6.78, followed by a decline to a low around 4.73, then fluctuates moderately around values between 5.0 and 6.5, indicating variable but generally strong inventory turnover over the entire time frame.

Average inventory processing period trends

The processing period ranges mostly between 54 and 77 days, inversely tracking the turnover ratio with longer processing times corresponding to lower turnover, reflecting changes in how quickly inventory is being cycled through.

Relationship between metrics

The inverse relationship between the inventory turnover ratio and the average processing period is clearly demonstrated, supporting typical financial interpretations: as turnover improves, inventory days decrease, and vice versa.

Insights

Fluctuations in turnover and processing periods suggest that inventory management has experienced periods of both efficiency and slower movement, which could relate to seasonal demand shifts, changes in supply chain dynamics, or strategic adjustments. Monitoring these variations will be essential for maintaining optimal inventory levels and operational effectiveness.

Payables Turnover Ratio

The payables turnover ratio data begins from May 2020, showing an initial value of 5.53. Over the subsequent quarters, there is some fluctuation with a noticeable dip to 4.42 in the quarter ending February 2021, followed by a recovery and further volatility. From mid-2021 through early 2022, the ratio shows moderate stability, generally ranging between approximately 4.4 and 5.9. Starting around mid-2022, the ratio exhibits an upward trend, reaching a peak of 6.88 in January 2023. After this peak, values fluctuate mostly above 5.0, maintaining a generally higher turnover rate compared to earlier periods. Toward the latest quarters, the ratio shows modest decreases but stays elevated relative to the earliest data, ending near 6.35 in August 2025.

Average Payables Payment Period (Days)

Corresponding to the payables turnover, the average payables payment period starts at 66 days in May 2020. There is an increase to 83 days in February 2021, marking the longest payment period in the available dataset. Following this peak, the payment period gradually shortens to around 53 days by July 2023, reflecting faster payment practices. In subsequent quarters, the period shows moderate variability, generally oscillating between the mid-50s and high 60s. The latest figures, through August 2025, indicate some reduction in payment days compared to the earlier high values but do not return to the lowest observed levels.

Summary of Trends and Insights

There is a clear inverse relationship between the payables turnover ratio and the average payment period, as expected. Periods with higher turnover ratios correspond to shorter payment periods, reflecting a more rapid settlement of payables. The data reveals a period of slower payments and lower turnover around early 2021, possibly indicating strategic changes or external factors influencing payment behavior. Subsequently, the trend moves toward faster payables turnover and reduced payment periods, culminating in a peak turnover and minimum payment days in early 2023. Although fluctuations persist, the general direction over the data range suggests an improvement in payables management efficiency, with the company tending to pay suppliers more quickly in recent years compared to early observation points.