Kohl's Corporation (KSS)

Based on the provided data, we can analyze the liquidity ratios of Kohl's Corporation as follows:

1. Current Ratio:
- The current ratio represents the company's ability to meet its short-term obligations with its current assets. A current ratio above 1 indicates that Kohl's has more current assets than current liabilities to cover its short-term obligations. The trend of the current ratio from January 28, 2023, to January 31, 2025, shows a slight increase from 1.20 to 1.08. This indicates that the company's liquidity position has declined over the period, as the ratio has decreased below 1, signaling potential challenges in meeting short-term liabilities with current assets.

2. Quick Ratio:
- The quick ratio, also known as the acid-test ratio, provides a more stringent assessment of liquidity by excluding inventory from current assets. A quick ratio below 1 implies that Kohl's may have difficulty meeting its short-term obligations without relying on selling inventory. The quick ratio fluctuates significantly between January 28, 2023, and January 31, 2025, ranging from 0.12 to 0.04. Generally, a consistent decrease in the quick ratio may raise concerns about the company's ability to meet immediate liabilities without relying on slow-moving inventory assets.

3. Cash Ratio:
- The cash ratio specifically measures the company's ability to cover its current liabilities using only cash and cash equivalents. A cash ratio below 1 indicates that Kohl's relies on other current assets besides cash to cover its near-term obligations. The cash ratio remains relatively stable over the years at around 0.05 to 0.07, except for a minor decrease to 0.04 on January 31, 2025. This implies that the company maintains a moderate level of cash reserves compared to its current liabilities.

In conclusion, based on the provided liquidity ratios, Kohl's Corporation exhibits certain challenges in maintaining a strong liquidity position, as indicated by declining current and quick ratios over the period. It is essential for Kohl's management to closely monitor and manage its working capital to ensure the company can meet its short-term obligations efficiently.

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Additional liquidity measure

The cash conversion cycle for Kohl's Corporation has shown fluctuations over the years. Specifically, on January 28, 2023, the company had a relatively efficient cash conversion cycle of 42.27 days, indicating that it was able to convert its investments in inventory and accounts receivable into cash relatively quickly. However, by January 31, 2023, the cycle significantly increased to 101.60 days, suggesting a lengthening period for Kohl's to convert its resources into cash.

Further analysis reveals that on January 31, 2024, the cash conversion cycle improved to 93.46 days, showcasing some progress in managing working capital. By February 3, 2024, the cycle decreased significantly to 41.58 days, signifying a more efficient cash conversion process within a short period.

As of January 31, 2025, the cash conversion cycle stood at 66.42 days, indicating a moderate efficiency in managing the company's liquidity position. Overall, Kohl's Corporation has experienced varying cash conversion cycles, suggesting fluctuations in its working capital management efficiency over the years.