Dollar Tree Inc (DLTR)
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 | 1.06 | 1.03 | 1.02 | 1.28 | 1.31 | 1.31 | 1.36 | 1.36 | 1.48 | 1.48 | 1.51 | 1.51 | 1.51 | 1.51 | 1.38 | 1.38 | 1.46 | 1.46 | 1.46 | 1.34 |
| Quick ratio | 0.15 | 0.11 | 0.10 | 0.13 | 0.15 | 0.15 | 0.10 | 0.10 | 0.12 | 0.12 | 0.21 | 0.21 | 0.15 | 0.15 | 0.09 | 0.09 | 0.16 | 0.16 | 0.28 | 0.24 |
| Cash ratio | 0.15 | 0.11 | 0.10 | 0.13 | 0.15 | 0.15 | 0.10 | 0.10 | 0.12 | 0.12 | 0.21 | 0.21 | 0.15 | 0.15 | 0.09 | 0.09 | 0.16 | 0.16 | 0.28 | 0.24 |
Dollar Tree Inc's liquidity ratios show mixed performance over the period under consideration. The current ratio, which measures the company's ability to cover short-term obligations with its current assets, has fluctuated between 1.02 and 1.51. Despite some variability, the current ratio generally remained above 1, indicating that Dollar Tree Inc has had sufficient current assets to cover its current liabilities.
On the other hand, the quick ratio, a more stringent measure of liquidity that excludes inventory from current assets, fluctuated between 0.09 and 0.28. This suggests that Dollar Tree Inc may have faced challenges in meeting its short-term obligations without relying on inventory in some periods.
The cash ratio, which measures the company's ability to cover current liabilities with its cash and cash equivalents, also fluctuated between 0.09 and 0.28. This indicates that Dollar Tree Inc may have had varying levels of liquidity in terms of cash to meet its immediate obligations.
Overall, while Dollar Tree Inc's current ratio generally remained healthy, its quick ratio and cash ratio showed more variability, suggesting that the company may need to actively manage its liquidity position to ensure smooth operations and meet its short-term obligations.
See also:
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 | 86.43 | 93.84 | 84.00 | 82.56 | 55.54 | 87.51 | 97.46 | 64.79 | 94.62 | 62.64 | 89.50 | 62.20 | 97.50 | 71.26 | 108.58 | 73.99 | 105.36 | 65.22 | 91.77 | 83.07 |
Dollar Tree Inc's cash conversion cycle has shown fluctuations over the past few years, indicating changes in the efficiency of its cash management. For instance, between January and April 2022, the cash conversion cycle increased from 83.07 days to 91.77 days, suggesting a delay in converting inventory into cash. However, by July 2022, the cycle improved significantly to 65.22 days, indicating a more efficient cash conversion process.
The cycle then rose sharply to 105.36 days in July 2022 and further to 108.58 days by October 2022, suggesting potential issues with managing accounts receivable and inventory turnover. Subsequently, Dollar Tree Inc managed to reduce the cash conversion cycle to 73.99 days by October 2023, showing efforts to streamline its operations.
By February 2024, the cash conversion cycle decreased notably to 55.54 days, implying improved efficiency in converting inventory into cash. However, the cycle saw a slight increase to 84.00 days by July 2024, indicating potential challenges in managing working capital effectively.
Overall, Dollar Tree Inc's cash conversion cycle has demonstrated variability, highlighting the company's ongoing efforts to enhance its operational efficiency and cash flow management. Continued monitoring and optimization of working capital components will be essential for maintaining a healthy cash conversion cycle in the future.