Nordstrom Inc (JWN)

Nordstrom Inc's liquidity ratios provide insights into its ability to meet its short-term obligations using its current assets. The current ratio has been relatively stable over the past five years, ranging from 0.88 to 1.07, with the latest ratio at 1.02 as of February 3, 2024. This indicates that the company may currently have just enough current assets to cover its current liabilities.

The quick ratio, which is a more stringent measure of liquidity as it excludes inventory, has also remained relatively consistent, ranging from 0.17 to 0.32. The latest quick ratio of 0.31 as of February 3, 2024, suggests that the company's ability to meet its short-term obligations without relying on inventory is somewhat weak.

The cash ratio, which is the most conservative liquidity ratio, reflects the company's ability to cover its current liabilities with its cash and cash equivalents. Nordstrom Inc's cash ratio has varied between 0.10 and 0.24 over the last five years, with the latest ratio standing at 0.20 as of February 3, 2024. This indicates that the company may not hold sufficient cash to cover its short-term obligations.

Overall, Nordstrom Inc's liquidity ratios suggest that the company may have some challenges in meeting its short-term obligations, especially when considering its quick and cash ratios. It may be important for the company to closely monitor and manage its liquidity position to ensure it can meet its financial obligations in a timely manner.

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Additional liquidity measure

The cash conversion cycle of Nordstrom Inc has fluctuated over the past five years. The cycle represents the time it takes for the company to convert its investment in inventory into cash received from customers. Nordstrom's cash conversion cycle decreased significantly from 61.32 days in January 2022 to just 0.28 days in January 2021, indicating an efficient management of inventory and collection of receivables during that period. However, it increased to 52.82 days in February 2024, reflecting a slower conversion of inventory into cash in the most recent year. Overall, Nordstrom has experienced varying levels of efficiency in managing its working capital over the five-year period, with fluctuations in its cash conversion cycle.