Bath & Body Works Inc. (BBWI)
Liquidity ratios
| Jan 31, 2025 | Oct 31, 2024 | Jul 31, 2024 | Apr 30, 2024 | Feb 3, 2024 | Jan 31, 2024 | Oct 31, 2023 | Oct 28, 2023 | Jul 31, 2023 | Jul 29, 2023 | Apr 30, 2023 | Apr 29, 2023 | Jan 31, 2023 | Jan 28, 2023 | Oct 31, 2022 | Oct 29, 2022 | Jul 31, 2022 | Jul 30, 2022 | Apr 30, 2022 | Jan 31, 2022 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Current ratio | 1.48 | 1.09 | 1.11 | 1.57 | 1.64 | 1.64 | 1.39 | 1.39 | 1.56 | 1.56 | 1.63 | 1.63 | 1.64 | 1.64 | 1.34 | 1.34 | 1.39 | 1.39 | 1.41 | 2.33 |
| Quick ratio | 0.55 | 0.12 | 0.34 | 0.70 | 1.01 | 0.84 | 0.29 | 0.43 | 0.65 | 0.78 | 0.82 | 0.93 | 0.89 | 1.06 | 0.20 | 0.37 | 0.36 | 0.51 | 0.52 | 1.53 |
| Cash ratio | 0.55 | 0.12 | 0.34 | 0.70 | 0.84 | 0.84 | 0.29 | 0.29 | 0.65 | 0.65 | 0.82 | 0.82 | 0.89 | 0.89 | 0.20 | 0.20 | 0.36 | 0.36 | 0.52 | 1.53 |
The current ratio of Bath & Body Works Inc. has shown some fluctuations over the specified period, ranging from a high of 2.33 to a low of 1.09. Generally, a current ratio above 1 indicates that the company has more current assets than current liabilities to cover its short-term obligations. However, a decreasing trend in the current ratio towards the end of the period may suggest potential liquidity challenges.
The quick ratio, which provides a more stringent measure of liquidity by excluding inventories from current assets, has also experienced variability, ranging from 0.12 to 1.06. A quick ratio above 1 is typically considered healthy, indicating that the company can meet its short-term liabilities without relying on selling inventory. The declining trend in the quick ratio towards the end of the period may raise concerns about the company's ability to cover immediate obligations.
The cash ratio, which is the most conservative measure of liquidity since it considers only cash and cash equivalents, has displayed a similar pattern to the quick ratio, fluctuating between 0.12 and 1.53. A cash ratio above 1 signifies that the company holds enough cash to cover its current liabilities. The decreasing trend in the cash ratio towards the end of the period implies potential challenges in maintaining sufficient cash reserves to meet short-term obligations.
In summary, while Bath & Body Works Inc. has maintained current ratios above 1 for most of the period, the downward trends in both the quick ratio and cash ratio towards the end may indicate declining liquidity levels and suggest the need for careful monitoring of the company's short-term financial health.
Additional liquidity measure
| Jan 31, 2025 | Oct 31, 2024 | Jul 31, 2024 | Apr 30, 2024 | Feb 3, 2024 | Jan 31, 2024 | Oct 31, 2023 | Oct 28, 2023 | Jul 31, 2023 | Jul 29, 2023 | Apr 30, 2023 | Apr 29, 2023 | Jan 31, 2023 | Jan 28, 2023 | Oct 31, 2022 | Oct 29, 2022 | Jul 31, 2022 | Jul 30, 2022 | Apr 30, 2022 | Jan 31, 2022 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 65.76 | 89.35 | 57.50 | 54.44 | 29.30 | 54.74 | 97.11 | 59.55 | 69.07 | 30.41 | 47.78 | 27.02 | 41.72 | 27.60 | 99.35 | 65.91 | 75.46 | 44.83 | 93.12 | 69.85 |
The cash conversion cycle of Bath & Body Works Inc. fluctuated over the period analyzed. The company's cash conversion cycle, which represents the time it takes to convert investments in inventory and other resources into cash flows from sales, ranged from a low of 27.02 days to a high of 99.35 days.
Overall, a downward trend is observed in the cash conversion cycle of Bath & Body Works Inc. from July 2022 to April 2023, indicating efficiency improvements in managing cash flows from operations. However, there is an uptick in the cycle towards the latter part of the period, reaching 89.35 days by October 2024.
The company should closely monitor its cash conversion cycle to ensure efficient management of working capital, as a shorter cycle indicates faster conversion of investments into cash, providing liquidity for operations and potential future investments.