Chewy Inc (CHWY)

Liquidity ratios

Oct 27, 2024 Jul 28, 2024 Apr 28, 2024 Jan 28, 2024 Oct 29, 2023 Jul 30, 2023 Apr 30, 2023 Jan 29, 2023 Oct 30, 2022 Jul 31, 2022 May 1, 2022 Jan 30, 2022 Oct 31, 2021 Aug 1, 2021 May 2, 2021 Jan 31, 2021 Nov 1, 2020 Aug 2, 2020 May 3, 2020 Feb 2, 2020
Current ratio 0.74 0.85 1.07 1.00 0.96 0.93 0.92 0.83 0.85 0.85 0.82 0.80 0.89 0.90 0.92 0.89 0.86 0.61 0.61 0.57
Quick ratio 0.32 0.44 0.66 0.61 0.57 0.53 0.50 0.44 0.45 0.42 0.36 0.44 0.51 0.47 0.45 0.50 0.38 0.13 0.15 0.19
Cash ratio 0.23 0.34 0.57 0.54 0.49 0.45 0.42 0.37 0.38 0.34 0.36 0.37 0.42 0.47 0.45 0.41 0.38 0.13 0.15 0.19

Chewy Inc's liquidity ratios have shown fluctuations over the past few quarters. The current ratio, which measures the company's ability to cover short-term obligations with its current assets, has generally been below the ideal benchmark of 1.0. It decreased from 1.07 in April 2024 to 0.74 in October 2024, indicating a potential challenge in meeting current liabilities.

The quick ratio, a more stringent liquidity measure that excludes inventory from current assets, also experienced a downward trend from 0.66 in April 2024 to 0.32 in October 2024. This suggests that Chewy Inc may have difficulty in meeting its short-term obligations without relying on inventory liquidation.

The cash ratio, which specifically focuses on a company's ability to cover current liabilities with cash and cash equivalents, followed a similar pattern of decline. It decreased from 0.57 in April 2024 to 0.23 in October 2024, indicating a lower proportion of cash to current liabilities.

Overall, Chewy Inc's liquidity ratios indicate a potentially deteriorating liquidity position, highlighting the importance of closely monitoring cash flow management and working capital to ensure the company can meet its short-term financial obligations efficiently.

Additional liquidity measure

Oct 27, 2024 Jul 28, 2024 Apr 28, 2024 Jan 28, 2024 Oct 29, 2023 Jul 30, 2023 Apr 30, 2023 Jan 29, 2023 Oct 30, 2022 Jul 31, 2022 May 1, 2022 Jan 30, 2022 Oct 31, 2021 Aug 1, 2021 May 2, 2021 Jan 31, 2021 Nov 1, 2020 Aug 2, 2020 May 3, 2020 Feb 2, 2020
Cash conversion cycle days -6.61 -6.59 -8.03 -8.45 -7.68 -8.34 -9.08 -9.14 -7.69 -8.42 25.22 -8.95 -12.46 24.62 25.19 -8.13 28.57 29.10 31.51 24.83

Based on the cash conversion cycle data provided, Chewy Inc has shown consistent improvement from 2020 to 2024. The cash conversion cycle measures the time it takes for a company to convert its investments in inventory and other resources into cash flows from sales. A negative cash conversion cycle indicates efficient management of working capital.

Chewy Inc has consistently maintained a negative cash conversion cycle since November 2020, indicating that the company is able to collect cash from customers before having to pay suppliers for inventory. The company's cash conversion cycle has improved over time, reaching its lowest point of -8.45 days in January 2024. This suggests that Chewy is effectively managing its inventory, receivables, and payables to generate cash flow efficiently.

However, in the May 2022 period, the cash conversion cycle increased significantly to 25.22 days, indicating a temporary inefficiency in managing working capital. This spike was likely due to fluctuations in sales, inventory management, or payment terms with suppliers. The company quickly rectified this, as evidenced by subsequent improvements in the cash conversion cycle.

Overall, the trend of negative cash conversion cycles and the general improvement over time indicate that Chewy Inc has been successful in optimizing its working capital management and cash flow operations.