Best Buy Co. Inc (BBY)
Liquidity ratios
| Feb 3, 2024 | Oct 28, 2023 | Jul 29, 2023 | Apr 29, 2023 | Jan 28, 2023 | Oct 29, 2022 | Jul 30, 2022 | Apr 30, 2022 | Jan 29, 2022 | Oct 30, 2021 | Jul 31, 2021 | May 1, 2021 | Jan 30, 2021 | Oct 31, 2020 | Aug 1, 2020 | May 2, 2020 | Feb 1, 2020 | Nov 2, 2019 | Aug 3, 2019 | May 4, 2019 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Current ratio | 1.00 | 0.99 | 0.98 | 0.98 | 0.98 | 0.98 | 0.96 | 0.96 | 0.99 | 1.13 | 1.16 | 1.17 | 1.19 | 1.12 | 1.06 | 1.02 | 1.10 | 1.05 | 1.08 | 1.12 |
| Quick ratio | 0.30 | 0.18 | 0.26 | 0.26 | 0.36 | 0.21 | 0.21 | 0.17 | 0.37 | 0.38 | 0.50 | 0.54 | 0.62 | 0.52 | 0.62 | 0.53 | 0.42 | 0.23 | 0.34 | 0.33 |
| Cash ratio | 0.18 | 0.09 | 0.16 | 0.16 | 0.23 | 0.11 | 0.11 | 0.07 | 0.28 | 0.29 | 0.42 | 0.45 | 0.52 | 0.44 | 0.53 | 0.45 | 0.28 | 0.12 | 0.21 | 0.22 |
Based on the provided ratios for Best Buy Co. Inc, there are various trends and fluctuations in the company's liquidity position over the past few years.
Starting with the current ratio, which measures the company's ability to cover its short-term liabilities with its current assets, we see that it has been relatively stable around 1.0 in recent years. This indicates that Best Buy has been able to meet its short-term obligations adequately, although there was a slight dip in the ratio in the last few quarters.
Moving on to the quick ratio, which provides a more stringent measure of liquidity by excluding inventory from the current assets, we observe significant variability. The quick ratio has fluctuated between 0.17 and 0.62, showing the company's ability to cover its short-term liabilities without relying on selling inventory. However, the ratio seems to be generally low, indicating that Best Buy may face some challenges in meeting its immediate obligations with its most liquid assets.
Lastly, the cash ratio, which is the most conservative liquidity metric as it measures the ability to cover short-term liabilities with only cash and cash equivalents, paints a similar picture of variability. Best Buy's cash ratio has ranged from 0.07 to 0.53, with a general upward trend over the past few quarters. This suggests an improvement in the company's ability to cover its short-term liabilities solely with cash.
Overall, while Best Buy Co. Inc has maintained a relatively stable current ratio, there seem to be fluctuations in the quick and cash ratios, indicating varying degrees of liquidity and potential challenges in meeting short-term obligations. Continued monitoring of these ratios is essential to assess the company's liquidity position effectively.
See also:
Best Buy Co. Inc Liquidity Ratios (Quarterly Data)
Additional liquidity measure
| Feb 3, 2024 | Oct 28, 2023 | Jul 29, 2023 | Apr 29, 2023 | Jan 28, 2023 | Oct 29, 2022 | Jul 30, 2022 | Apr 30, 2022 | Jan 29, 2022 | Oct 30, 2021 | Jul 31, 2021 | May 1, 2021 | Jan 30, 2021 | Oct 31, 2020 | Aug 1, 2020 | May 2, 2020 | Feb 1, 2020 | Nov 2, 2019 | Aug 3, 2019 | May 4, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 11.35 | 12.16 | 8.93 | 10.51 | 3.51 | 10.30 | 12.26 | 12.86 | -0.28 | 8.42 | 1.39 | 0.19 | -5.41 | -8.85 | -19.29 | 1.57 | 8.37 | 12.62 | 9.99 | 12.38 |
The cash conversion cycle of Best Buy Co. Inc has exhibited fluctuations over the past few reporting periods. The company's ability to convert its investments in inventory and accounts receivable into cash within a specific period can be analyzed through this metric.
Based on the data provided, it is evident that Best Buy Co. Inc's cash conversion cycle ranged from -19.29 days to 12.86 days during the time frame under consideration. A negative cash conversion cycle indicates that the company is able to collect cash from customers before it has to pay its suppliers, which can be advantageous for its working capital management.
The company saw improvements in its cash conversion cycle in the earlier periods in 2023 and 2022, as reflected by the negative days, indicating efficient management of inventory and collections from customers. However, the cycle increased significantly in periods such as October 2023, February 2024, and April 2022, showing potential challenges in managing working capital during these times.
Overall, it is essential for Best Buy Co. Inc to closely monitor its cash conversion cycle to ensure efficient management of working capital, optimize inventory levels, and enhance cash flow generation. Periods with longer cash conversion cycles may require a closer evaluation of operational processes to address any inefficiencies and improve overall financial performance.