BJs Wholesale Club Holdings Inc (BJ)
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 | 0.74 | 0.76 | 0.76 | 0.74 | 0.73 | 0.73 | 0.73 | 0.73 | 0.71 | 0.71 | 0.70 | 0.70 | 0.67 | 0.67 | 0.72 | 0.72 | 0.73 | 0.73 | 0.80 | 0.76 |
| Quick ratio | 0.01 | 0.01 | 0.02 | 0.01 | 0.11 | 0.01 | 0.01 | 0.09 | 0.01 | 0.09 | 0.01 | 0.09 | 0.01 | 0.11 | 0.01 | 0.11 | 0.07 | 0.15 | 0.02 | 0.02 |
| Cash ratio | 0.01 | 0.01 | 0.02 | 0.01 | 0.01 | 0.01 | 0.01 | 0.01 | 0.01 | 0.01 | 0.01 | 0.01 | 0.01 | 0.01 | 0.01 | 0.01 | 0.07 | 0.07 | 0.02 | 0.02 |
The liquidity ratios of BJs Wholesale Club Holdings Inc indicate a mixed picture over the periods analyzed. The current ratio, which measures the company's ability to meet short-term obligations with its current assets, has shown a slight decline from 0.76 on January 31, 2022, to 0.74 on April 30, 2024, with fluctuations in between. While the ratio generally remained below 1, indicating that the company may have struggled to cover its short-term liabilities with current assets, there was a slight improvement towards the end of the period.
The quick ratio, focusing on the firm's ability to cover immediate liabilities with its most liquid assets, also exhibited volatility. Starting at extremely low levels (0.02 on January 31, 2022) and fluctuating between 0.01 and 0.15 over time, the quick ratio showed some improvement but generally stayed at precarious levels. This suggests that BJs Wholesale Club Holdings Inc may have had difficulty meeting its short-term obligations without relying on inventory or other less liquid assets.
Furthermore, the cash ratio, which measures the company's ability to pay off current liabilities with cash and cash equivalents, hovered around 0.01 for most of the periods analyzed, showing minimal changes. This indicates that BJs Wholesale Club Holdings Inc had a very low level of cash reserves relative to its short-term obligations.
In conclusion, the liquidity ratios of BJs Wholesale Club Holdings Inc point towards challenges in managing short-term obligations, with the company having limited ability to cover its liabilities with current and liquid assets. Investors and analysts may need to closely monitor the company's liquidity position and its ability to generate sufficient cash flows to meet its obligations in the future.
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 | 32.91 | 37.37 | 33.06 | 33.22 | 10.07 | 32.17 | 37.49 | 12.01 | 35.54 | 11.04 | 35.53 | 9.90 | 31.71 | 8.62 | 33.68 | 7.91 | 31.89 | 7.31 | 37.32 | 32.25 |
The cash conversion cycle for BJs Wholesale Club Holdings Inc fluctuated over the provided period from January 31, 2022, to January 31, 2025. The cash conversion cycle is a measure of how long it takes for a company to convert its investments in inventory back into cash, considering the entire cycle of purchasing, selling, and collecting payments.
From the data provided, we observe that the highest cash conversion cycle was 37.49 days on October 31, 2023, while the lowest cycle observed was 7.31 days on July 30, 2022. Overall, the cycle seems to fluctuate significantly, indicating variations in the efficiency of the company's working capital management.
A lower cash conversion cycle suggests that the company is more efficient in managing its working capital, which can be a positive sign of effective inventory management and quicker conversion of inventory into cash. Conversely, a higher cash conversion cycle may signal inefficiencies in inventory management or challenges in collecting receivables promptly.
In analyzing the trend over time, it would be important to investigate the factors driving these fluctuations in the cash conversion cycle. This analysis could include looking at inventory turnover, accounts receivable collection periods, and accounts payable days to pinpoint areas for improvement in the working capital cycle.
Overall, monitoring the cash conversion cycle can provide valuable insights into the operational efficiency and liquidity management of BJs Wholesale Club Holdings Inc, helping stakeholders assess its ability to generate cash flows and manage working capital effectively.