The Gap, Inc. (GAP)
Payables turnover
| Feb 1, 2025 | Nov 2, 2024 | Aug 3, 2024 | May 4, 2024 | 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Cost of revenue (ttm) | US$ in thousands | 8,859,000 | 8,948,000 | 8,965,000 | 9,043,000 | 9,114,000 | 9,307,000 | 9,626,000 | 9,938,000 | 10,257,000 | 10,440,000 | 10,192,000 | 10,053,000 | 10,033,000 | 9,787,000 | 9,879,000 | 9,617,000 | 9,095,000 | 9,339,000 | 9,404,000 | 9,727,000 |
| Payables | US$ in thousands | 1,488,000 | 1,523,000 | 1,522,000 | 1,196,000 | 1,349,000 | 1,433,000 | 1,406,000 | 1,199,000 | 1,320,000 | 1,388,000 | 1,640,000 | 1,599,000 | 1,951,000 | 1,630,000 | 1,583,000 | 1,530,000 | 1,743,000 | 2,284,000 | 1,629,000 | 971,000 |
| Payables turnover | 5.95 | 5.88 | 5.89 | 7.56 | 6.76 | 6.49 | 6.85 | 8.29 | 7.77 | 7.52 | 6.21 | 6.29 | 5.14 | 6.00 | 6.24 | 6.29 | 5.22 | 4.09 | 5.77 | 10.02 |
February 1, 2025 calculation
Payables turnover = Cost of revenue (ttm) ÷ Payables
= $8,859,000K ÷ $1,488,000K
= 5.95
The payables turnover ratio indicates how efficiently a company is managing its accounts payable. A higher payables turnover ratio suggests that the company is paying its suppliers more quickly, which can be a sign of strong liquidity and good supplier relationships. Conversely, a lower ratio may indicate that the company is taking longer to pay its suppliers.
Analyzing The Gap, Inc.'s payables turnover ratio over the provided period shows some fluctuations. The payables turnover ratio ranged from a low of 4.09 in October 31, 2020, to a high of 8.29 in April 29, 2023. Generally, the ratio increased from 2020 to 2023, with some fluctuations in between. This upward trend could suggest that The Gap, Inc. was improving its ability to pay suppliers more efficiently during this period.
However, it is important to note that the payables turnover ratio saw a slight decline towards the later dates, dropping to 5.88 in November 2, 2024, and 5.95 in February 1, 2025. This decrease may indicate that the company was taking slightly longer to pay its suppliers in these periods.
Overall, while The Gap, Inc.'s payables turnover ratio showed some improvement over the years, the recent slight decline in the ratio may warrant further investigation to understand the factors contributing to this change and assess the impact on the company's financial management strategies.
Peer comparison
Feb 1, 2025