Macy’s Inc (M)

Liquidity ratios

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 Feb 1, 2020 Nov 2, 2019 Aug 3, 2019 May 4, 2019
Current ratio 1.37 1.18 1.26 1.22 1.20 1.09 1.17 1.12 1.25 1.14 1.14 1.31 1.15 1.11 1.16 1.24 1.18 1.28 1.47 1.42
Quick ratio 0.30 0.11 0.17 0.18 0.24 0.08 0.11 0.16 0.37 0.08 0.35 0.36 0.36 0.52 0.69 0.29 0.19 0.07 0.21 0.19
Cash ratio 0.23 0.06 0.10 0.13 0.18 0.05 0.06 0.12 0.32 0.05 0.32 0.33 0.31 0.50 0.65 0.26 0.12 0.05 0.15 0.15

The liquidity ratios of Macy's Inc indicate the company's ability to meet its short-term obligations and manage its cash flow effectively.

The current ratio, which measures the company's ability to cover its short-term liabilities with its current assets, has fluctuated over the time period examined, ranging from 1.09 to 1.47. A current ratio above 1 signifies that Macy's has more current assets than current liabilities, indicating a healthy liquidity position. However, the fluctuations in the current ratio suggest some variability in the company's short-term liquidity management.

The quick ratio, also known as the acid-test ratio, provides a more stringent measure of liquidity by excluding inventory from current assets. Macy's quick ratio varied significantly, with values ranging from 0.08 to 0.69. A quick ratio below 1 may indicate a potential inability to meet short-term obligations without relying on the sale of inventory. The low quick ratio values for Macy's highlight the company's reliance on inventory to meet short-term liquidity needs, which could pose a risk if inventory cannot be converted to cash quickly.

The cash ratio, which is the most conservative liquidity measure and indicates the proportion of current liabilities that could be covered by cash alone, also saw significant fluctuations for Macy's, ranging from 0.05 to 0.65. A cash ratio below 1 indicates that Macy's may need to rely on other current assets to meet its short-term obligations. The higher cash ratio values suggest an improved ability to cover current liabilities solely with cash, which is a positive indicator of liquidity.

In conclusion, Macy's liquidity ratios vary over the period studied, with the current ratio generally above 1, the quick ratio below 1, and the cash ratio showing fluctuations. The company may need to focus on managing its inventory levels to improve its quick ratio and reduce reliance on non-cash current assets to meet short-term obligations.


Additional liquidity measure

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 Feb 1, 2020 Nov 2, 2019 Aug 3, 2019 May 4, 2019
Cash conversion cycle days 42.16 44.81 37.86 37.49 38.17 41.55 38.56 35.51 38.34 42.83 35.72 34.77 34.85 32.08 35.00 40.70 58.28 60.06 53.52 56.52

The cash conversion cycle of Macy’s Inc has shown fluctuations over the given time period. The cycle represents the number of days it takes for a company to convert its investments in inventory and other resources into cash flows from sales. Generally, a shorter cash conversion cycle is considered favorable as it indicates quicker turnover of cash.

From the data provided, Macy's Inc has experienced varying cash conversion cycle lengths ranging from 32.08 days to 60.06 days. A lower cash conversion cycle was observed in January 2021, indicating that Macy's was efficient in converting its investments into cash during that period. Conversely, the highest cash conversion cycle was recorded in February 2020, suggesting a longer time for Macy's to convert its resources into cash flows from sales.

Overall, understanding the trends and variations in Macy's Inc cash conversion cycle is essential for assessing the company's operational efficiency and liquidity management, which can impact its financial performance and strategic decision-making processes.