Kohl's Corporation (KSS)

The liquidity ratios of Kohl's Corporation indicate the company's ability to meet its short-term financial obligations.

- The current ratio has been relatively stable over the past few years, ranging from 1.05 to 1.53. This ratio shows that Kohl's has generally had enough current assets to cover its current liabilities, although there has been a slight decline in recent periods.

- The quick ratio, which is a more stringent measure of liquidity as it excludes inventory from current assets, has shown a decreasing trend, dropping from 0.19 to 0.04. This suggests that Kohl's may have faced challenges in meeting its short-term obligations with its most liquid assets.

- The cash ratio, which is the most conservative liquidity measure as it only includes cash and cash equivalents, has also shown a decline from 0.19 to 0.04. This indicates that Kohl's may have had limited cash resources to cover its immediate liabilities.

Overall, the liquidity ratios of Kohl's Corporation suggest a potential need for the company to work on improving its short-term liquidity position, especially given the declining trend in its quick and cash ratios. It may be advisable for Kohl's to closely monitor its working capital management and cash flow to ensure it can meet its upcoming financial obligations.

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Additional liquidity measure

The cash conversion cycle of Kohl's Corporation, which represents the time it takes for the company to convert its investments in inventory back into cash received from customers, has varied over the past few years.

From January 31, 2022, to October 31, 2024, the cash conversion cycle fluctuated between 43.03 days and 137.09 days. The lowest level was recorded on February 3, 2024, at 43.03 days, indicating a efficient management of inventory and a quick conversion of sales into cash. On the other hand, the highest level was reached on October 31, 2022, at 137.09 days, signifying potential inefficiencies in managing inventory, accounts receivable, and accounts payable.

The average cash conversion cycle over this period was approximately 85.11 days, which suggests that Kohl's Corporation took around 85 days, on average, to efficiently convert its investments in inventory into cash received from customers.

It is important for Kohl's Corporation to monitor and manage its cash conversion cycle effectively as a shorter cycle indicates more efficient operations and better working capital management, ultimately leading to improved liquidity and profitability.