Macy’s Inc (M)

Short-term

Turnover ratios

1. Inventory Turnover: Macy's inventory turnover ratio indicates how many times the company's inventory was sold and replaced during the period. The trend shows a decline from 5.59 in January 2023 to 3.08 in January 2025, which indicates that Macy's is selling its inventory at a slower pace over the years.

2. Receivables Turnover: The receivables turnover ratio shows how effectively Macy's is collecting payments from its customers. The data provided shows values only for January 28, 2023, and February 3, 2024, signaling potential issues with the availability of data. A higher turnover ratio is preferred as it indicates efficient collection of receivables.

3. Payables Turnover: This ratio reflects Macy's ability to pay its suppliers. The available data for January 28, 2023, and February 3, 2024, reveals an increase in the turnover ratio from 11.62 to 12.40, implying that Macy's is able to manage its payables more efficiently over time.

4. Working Capital Turnover: The working capital turnover ratio measures how efficiently Macy's is using its working capital to generate sales. The trend showcases a decrease from 25.65 in January 2023 to 11.77 in January 2025, indicating that Macy's is generating lower sales with its working capital over the years, which could be a concern for the company's operational efficiency.

In conclusion, Macy's Inc should closely monitor its inventory management to improve turnover rates, ensure the availability of consistent data for receivables turnover analysis, continue the positive trend in payables turnover, and work on enhancing working capital efficiency to drive higher sales.

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Average number of days

To analyze Macy's Inc activity ratios, we will focus on three key metrics: Days of Inventory on Hand (DOH), Days of Sales Outstanding (DSO), and Number of Days of Payables.

1. Days of Inventory on Hand (DOH):
- The trend in Macy's DOH indicates the number of days it takes the company to sell its inventory. Higher DOH numbers could suggest slow-moving inventory or potential obsolescence issues.
- Macy's DOH has fluctuated over the years: from 65.27 days on January 28, 2023, to a peak of 118.69 days on January 31, 2025.
- The significant increase in DOH from 2023 to 2025 may indicate challenges in managing inventory efficiently and turning inventory into sales.

2. Days of Sales Outstanding (DSO):
- DSO measures the average number of days it takes for Macy's to collect outstanding receivables. A lower DSO number suggests faster collections and better cash flow management.
- Macy's DSO has varied in the data provided, with values ranging from 4.30 days on January 28, 2023, to 4.48 days on February 3, 2024.
- The absence of DSO data for certain periods may indicate that all sales are made on a cash basis during those times, or the data may not be reported.

3. Number of Days of Payables:
- This metric reflects how many days it takes for Macy's to pay its suppliers. A longer payment period can indicate better liquidity for the company but may strain supplier relationships.
- Macy's Number of Days of Payables was 31.40 days on January 28, 2023, and decreased to 29.44 days on February 3, 2024.
- Similar to DSO, missing data for some periods implies that the information may not be disclosed or that all payables are settled promptly.

Overall, Macy's activity ratios suggest challenges in managing inventory levels efficiently and collecting receivables promptly. Monitoring these ratios can provide insights into the company's operating performance and effectiveness in managing working capital.

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Long-term

Long-term activity ratios provide insight into how efficiently a company is utilizing its assets to generate sales revenue. Two key ratios for analyzing long-term activity are fixed asset turnover and total asset turnover.

- Fixed asset turnover: This ratio measures how effectively Macy’s Inc is utilizing its fixed assets to generate sales. A higher ratio indicates that the company is generating more sales revenue per dollar of fixed assets. In January 28, 2023, Macy's fixed asset turnover was 4.30, showing efficient utilization of fixed assets. However, this ratio declined to 2.78 by January 31, 2023, indicating a decrease in efficiency in utilizing fixed assets. The ratio was unavailable for January 31, 2024, but it increased significantly to 4.50 by February 3, 2024, suggesting improved efficiency in generating sales from fixed assets.

- Total asset turnover: This ratio reflects how well Macy’s Inc is using all its assets to generate revenue. A higher ratio signifies that the company is effectively generating sales relative to its total assets. The total asset turnover ratio was 1.51 on January 28, 2023, indicating a relatively efficient use of assets to generate revenue. By January 31, 2023, the ratio slightly decreased to 1.42, implying a slight decline in the efficiency of asset utilization. The ratio remained consistent at around 1.47 for January 31, 2024, and February 3, 2024, suggesting stable asset utilization to generate sales. However, on January 31, 2025, the total asset turnover ratio declined to 1.40, indicating a slight decrease in efficiency in generating sales relative to total assets.

Overall, the analysis of Macy’s Inc long-term activity ratios shows fluctuations in efficiency in utilizing fixed and total assets to generate sales revenue. Monitoring these ratios can provide valuable insights into the company's operational efficiency and asset utilization over time.