The Gap, Inc. (GAP)
Working capital 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Revenue (ttm) | US$ in thousands | 15,086,000 | 15,235,000 | 15,173,000 | 15,001,000 | 14,889,000 | 14,834,000 | 15,106,000 | 15,415,000 | 15,616,000 | 15,898,000 | 15,802,000 | 16,156,000 | 16,670,000 | 16,569,000 | 16,620,000 | 15,684,000 | 13,800,000 | 14,050,000 | 14,054,000 | 14,784,000 |
| Total current assets | US$ in thousands | 5,203,000 | 5,130,000 | 4,809,000 | 4,197,000 | 4,395,000 | 4,374,000 | 4,239,000 | 4,283,000 | 4,617,000 | 5,038,000 | 4,949,000 | 5,005,000 | 5,165,000 | 5,207,000 | 6,194,000 | 6,002,000 | 6,008,000 | 6,362,000 | 5,337,000 | 4,216,000 |
| Total current liabilities | US$ in thousands | 3,256,000 | 3,325,000 | 3,224,000 | 2,806,000 | 3,096,000 | 3,139,000 | 3,007,000 | 2,918,000 | 3,256,000 | 3,381,000 | 3,614,000 | 3,472,000 | 4,077,000 | 3,823,000 | 3,651,000 | 3,638,000 | 3,884,000 | 4,431,000 | 3,649,000 | 3,431,000 |
| Working capital turnover | 7.75 | 8.44 | 9.57 | 10.78 | 11.46 | 12.01 | 12.26 | 11.29 | 11.47 | 9.59 | 11.84 | 10.54 | 15.32 | 11.97 | 6.54 | 6.63 | 6.50 | 7.28 | 8.33 | 18.83 |
February 1, 2025 calculation
Working capital turnover = Revenue (ttm) ÷ (Total current assets – Total current liabilities)
= $15,086,000K ÷ ($5,203,000K – $3,256,000K)
= 7.75
The working capital turnover ratio measures how efficiently a company utilizes its working capital to generate sales revenue. A higher ratio indicates that the company is effectively managing its working capital.
Analyzing the working capital turnover of The Gap, Inc. over the past several quarters, we observe fluctuations in the ratio. From May 2, 2020, to August 1, 2020, there was a significant decrease in the working capital turnover from 18.83 to 8.33. This indicates a decline in the efficiency of The Gap's working capital utilization within that period.
Subsequently, the working capital turnover continued to decrease, reaching a low of 6.50 on January 30, 2021. This downward trend suggests that The Gap may have faced challenges in effectively managing its working capital during this period.
However, from May 1, 2021, onwards, there was a slight improvement in the working capital turnover ratio, fluctuating around the range of 6.50 to 12.26. This indicates some recovery in the company's working capital management efficiency during these quarters.
It is worth noting a spike in the working capital turnover ratio to 15.32 on January 29, 2022, and sustained levels above 10 in the subsequent quarters, indicating an enhanced efficiency in working capital utilization by The Gap.
Overall, the company's working capital turnover ratio showed variability over the analyzed period, with fluctuations and occasional spikes. Further monitoring of this ratio will be important to assess the ongoing efficiency of The Gap's working capital management in generating sales revenue.
Peer comparison
Feb 1, 2025