Chewy Inc (CHWY)
Liquidity ratios
| Jan 31, 2025 | Oct 31, 2024 | Oct 27, 2024 | Jul 31, 2024 | Jul 28, 2024 | Apr 30, 2024 | Apr 28, 2024 | Jan 31, 2024 | Jan 28, 2024 | Oct 31, 2023 | Oct 29, 2023 | Jul 31, 2023 | Jul 30, 2023 | Apr 30, 2023 | Jan 31, 2023 | Jan 29, 2023 | Oct 31, 2022 | Oct 30, 2022 | Jul 31, 2022 | May 1, 2022 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Current ratio | 0.75 | 0.74 | 0.74 | 0.85 | 0.85 | 1.07 | 1.07 | 1.00 | 1.00 | 0.96 | 0.96 | 0.93 | 0.93 | 0.92 | 0.86 | 0.83 | 0.85 | 0.85 | 0.85 | 0.82 |
| Quick ratio | 0.27 | 0.23 | 0.32 | 0.34 | 0.44 | 0.57 | 0.66 | 0.54 | 0.61 | 0.49 | 0.57 | 0.45 | 0.53 | 0.42 | 0.38 | 0.44 | 0.38 | 0.45 | 0.34 | 0.36 |
| Cash ratio | 0.27 | 0.23 | 0.23 | 0.34 | 0.34 | 0.57 | 0.57 | 0.54 | 0.54 | 0.49 | 0.49 | 0.45 | 0.45 | 0.42 | 0.38 | 0.37 | 0.38 | 0.38 | 0.34 | 0.36 |
Chewy Inc's liquidity ratios, specifically the current ratio, quick ratio, and cash ratio, provide insight into the company's ability to meet its short-term obligations and manage its current liabilities efficiently.
- The current ratio for Chewy Inc has shown fluctuations over the periods analyzed, ranging from 0.82 to 1.00. The upward trend observed from October 29, 2023, to April 30, 2024, indicates an improvement in the company's ability to cover its short-term obligations with its current assets. However, the ratio decreased in the subsequent period, suggesting a potential issue with liquidity management.
- The quick ratio measures Chewy Inc's ability to meet its short-term obligations using its most liquid assets. The ratio ranged from 0.23 to 0.66, with noticeable fluctuations over the periods analyzed. The rapid increase from October 31, 2024, to January 31, 2025, may indicate an improvement in the company's liquidity position.
- The cash ratio, which focuses solely on the company's ability to cover its short-term obligations with cash and cash equivalents, ranged from 0.23 to 0.57. The ratio remained relatively stable with moderate fluctuations, indicating a consistent ability to meet short-term obligations using available cash resources.
Overall, while Chewy Inc has experienced some fluctuations in its liquidity ratios, it is essential for the company to closely monitor and manage its current assets to ensure it can meet its short-term obligations effectively and maintain financial stability.
Additional liquidity measure
| Jan 31, 2025 | Oct 31, 2024 | Oct 27, 2024 | Jul 31, 2024 | Jul 28, 2024 | Apr 30, 2024 | Apr 28, 2024 | Jan 31, 2024 | Jan 28, 2024 | Oct 31, 2023 | Oct 29, 2023 | Jul 31, 2023 | Jul 30, 2023 | Apr 30, 2023 | Jan 31, 2023 | Jan 29, 2023 | Oct 31, 2022 | Oct 30, 2022 | Jul 31, 2022 | May 1, 2022 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 33.82 | 33.53 | -8.30 | 31.43 | -8.24 | 29.14 | -9.75 | 28.31 | -10.24 | 28.47 | -9.29 | 31.54 | -9.94 | 32.30 | 28.58 | -10.76 | 30.30 | -9.33 | 34.20 | 26.93 |
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. For Chewy Inc, the analysis of the cash conversion cycle shows fluctuations over several periods.
1. From May 1, 2022, to July 31, 2022, the cash conversion cycle increased from 26.93 days to 34.20 days, indicating a longer period for Chewy to convert its investments into cash.
2. A significant improvement was observed from July 31, 2022, to October 30, 2022, where the cycle decreased to -9.33 days. This negative figure suggests that Chewy was able to convert investments into cash before paying off its obligations, indicating efficiency in managing cash flows.
3. However, the cycle increased again by October 31, 2022, reaching 30.30 days, reflecting a longer time frame for conversion.
4. The cycle continued to fluctuate with both positive and negative figures in the subsequent periods up to January 31, 2025. These fluctuations suggest varying efficiencies in Chewy's inventory management and collection of receivables.
5. Overall, Chewy Inc's cash conversion cycle has shown some inconsistency over the periods analyzed, with improvements in some quarters and setbacks in others. It is important for the company to focus on optimizing its working capital management to ensure a consistent and efficient cash conversion cycle.