Dollar Tree Inc (DLTR)
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 | 1.31 | 1.36 | 1.48 | 1.51 | 1.51 | 1.38 | 1.46 | 1.46 | 1.34 | 1.25 | 1.25 | 1.36 | 1.35 | 1.28 | 1.22 | 1.15 | 1.20 | 1.09 | 1.06 | 1.07 |
| Quick ratio | 0.15 | 0.10 | 0.12 | 0.21 | 0.15 | 0.09 | 0.16 | 0.28 | 0.24 | 0.16 | 0.19 | 0.38 | 0.38 | 0.28 | 0.41 | 0.39 | 0.15 | 0.10 | 0.15 | 0.18 |
| Cash ratio | 0.15 | 0.10 | 0.12 | 0.21 | 0.15 | 0.09 | 0.16 | 0.28 | 0.24 | 0.16 | 0.19 | 0.38 | 0.38 | 0.28 | 0.41 | 0.39 | 0.15 | 0.10 | 0.15 | 0.18 |
The liquidity ratios of Dollar Tree Inc show fluctuations over the past few periods. The current ratio has displayed a range of 1.09 to 1.51, indicating the company's ability to cover its short-term obligations with its current assets. Although the ratio has been relatively stable, it saw a slight decline in the most recent period.
In contrast, the quick ratio, which excludes inventory from current assets, has been more volatile, ranging from 0.09 to 0.41. This suggests that Dollar Tree Inc may have limitations in meeting its short-term obligations without relying on inventory in certain periods. The quick ratio reached its lowest level in the most recent period but has demonstrated some improvement in prior periods.
The cash ratio, which is the most conservative measure of liquidity, mirrors the quick ratio as it only considers cash and cash equivalents. It has shown similar variability, ranging from 0.09 to 0.41. This indicates that while Dollar Tree Inc has a sufficient level of cash to cover its immediate liabilities, there have been fluctuations in its cash position over time.
Overall, Dollar Tree Inc's liquidity ratios suggest a reasonably stable ability to meet short-term obligations, with some fluctuations in the more conservative measures like the quick and cash ratios. Management should continue to monitor and manage liquidity effectively to ensure the company's financial health.
See also:
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 | 57.40 | 64.31 | 63.30 | 64.33 | 72.36 | 72.81 | 66.21 | 58.88 | 52.73 | 46.58 | 43.07 | 42.86 | 43.65 | 41.94 | 32.23 | 31.70 | 35.67 | 53.96 | 45.79 | 49.61 |
The cash conversion cycle of Dollar Tree Inc has displayed fluctuations over the periods analyzed. The company's cash conversion cycle, which represents the time it takes for a company to convert its investments in inventory and other resources into cash flows from sales, ranged from a high of 72.81 days to a low of 31.70 days.
Generally, a lower cash conversion cycle is considered favorable as it indicates that the company is efficiently managing its working capital and generating cash from its operations quickly.
Analyzing the trend, we observe that the cash conversion cycle of Dollar Tree Inc has shown some inconsistency. While there are periods where the cycle has decreased, indicating operational efficiency and effective management of working capital, there are also periods where the cycle increased, signifying potential challenges in managing inventory levels, collecting receivables, or extending payables.
It is essential for Dollar Tree Inc to continually monitor and analyze its cash conversion cycle to optimize operational efficiency, manage working capital effectively, and enhance overall financial performance.